A lot of our international clients at Alexia Huber & Partner Steuerberatungsgesellschaft choose Germany as a location for a subsidiary or a separate legal entity for their market presence in Germany and continental Europe.
This is due to the fact that Germany is the biggest European market and its central location in Europe.
We assist our clients along the way in finding and implementing a suitable legal form for their business.
Most commonly a corporation is established. Here the prevalent form is the GmbH, the German equivalent to a limited corporation.
Alternatively, a small limited corporation, UG (Unternehmergesellschaft haftungsbeschränkt), can also be chosen. The main difference between GmbH and UG is, that the UG does not require a minimum capital, whereas the GmbH requires a minimum capital of Euro 25.000, half of which needs to be paid into the GmbH bank account on founding. The remaining half only needs to be paid by the shareholders if the GmbH is in need of this amount.
The third alternative for a corporation would be a stock company, Aktiengesellschaft. This legal form is rarely chosen in a mother-daughter group situation.
All corporations need to be founded in front of a public notary. Our Munich tax office assists our clients through the help of associated lawyers in leading them through the complete process.
We make arrangements with the notary, check, and forward needed documents.
If a foreign corporation establishes a German Corporation, usually following documents are required for the notary:
- Original with an apostille in German regarding existence and power of representation for the foreign corporation (companies house)
- Original of founding resolution on the opening of a German corporation and on the appointment of the directors (Geschäftsführer) thereof. This then needs to be translated into German in a certified form.
- A written excerpt of transparency registry or registry of beneficial owner showing the economic owners of the foreign corporation. This needs to be translated into German in certified form.
- Copy of company statues and tax number of the foreign corporation.
- Copy of passports of the directors of the foreign corporation, including the address and their tax number.
- Marital property regime and tax numbers of the future directors (Geschäftsführer) of the German corporation.
Details need to be checked with the notary.
A business address for the new entity is needed before founding. At least one of the future directors should have a German address.
After notarization, a bank account needs to be opened for the new entity and required equity capital transferred to it.
The notary will then register the new company with companies house (Handelsregister).
A registration with trade office (Gewerbeamt) needs to be done by the new director at the town hall of residency of the new corporation.
Parallel to that tax registration of the new corporation is done by our Munich tax office.
With this final step, the newly founded corporation is ready to go.
Before business picks up, transfer pricing needs to be established to meet arms-length principles regarding business relations of the new entity to other group entities. Here Alexia Huber & Partner Steuerberatungsgesellschaft will assist in meeting German tax law requirements.
On-going, our Munich tax office will also take care of any financial accounting and VAT reports, payroll accounting, annual statements and tax declarations, such as VAT declarations (Umsatzsteuererklärung), corporate tax declarations (Körperschaftsteuererklärung), trade tax declaration (Gewerbesteuererklärung), including any needed group reportings for consolidation purposes.