About Germany
The Federal Republic of Germany is a Central European state that consists of 16 equal states. Having gone through several major wars, Germany has managed to gain political leadership among the EU countries, create a stable economic system and enter the top three world exporters and importers of goods.
During its formation, the country has become a prestigious place for running business and living, since the local standard of living is in 4th place in the world ranking. Thus, the jurisdiction is attractive both in terms of investment and immigration.
All legal processes in Germany are stable and clearly regulated; Germans like to live by the rules and adhere to them strictly.
At the same time, the legislation is loyal to foreign businessmen and does not impose significant restrictions on the registration of international companies.
OPENING A COMPANY IN GERMANY - ADVANTAGES:
- European prestige of companies and an open single market;
- the opportunity to obtain a residence permit in the country;
- stability of legislation and the economy as a whole, that allows you to plan activities in advance and be confident in the future;
- the country regularly develops preferences and benefits for start-up businesses.
- lack of currency control;
- extensive investment opportunities;
LEGISLATION
Legislative regulation of German companies is provided by:
- Federal Law "On Joint Stock Companies";
- Federal Law "On Limited Liability Companies".
Types of companies
There is a division of companies into the following organizational and legal forms:
- limited liability company,
- joint stock company,
- civil law company,
- open trade company,
- limited company,
- union,
- private enterprise.
Foreign enterprises may open only the following types of companies: Joint Stock Company (Aktiengesellschaft) and the Limited Liability Company (Gesellschaft mit beschränkter Haftung).
REGISTRATION OF A COMPANY IN GERMANY: REQUIREMENTS
JOINT STOCK COMPANY (AG):
- Share capital is 50 000 EUR. ¼ capital must be paid at the time of registration of the company in the Commercial Register. If the company has one shareholder, the shareholder has to guarantee the payment of the unpaid share of capital by providing a bank guarantee.
- Shares are registered, bearer and preferred. Shares may be with a nominal value (from 1 EUR) or without it.
- The joint-stock company is managed by the Chairman of the Management Board, who is subordinate to the Supervisory Board which includes at least three members.
- There must be at least one shareholder, individual or legal entity, there is no residency requirements.
- There is no requirement for availability of a secretary
- Information about directors and shareholders, contained in the Trade Register.
- It is necessary to keep and submit an annual financial report.
- The advantage of a joint stock company over a limited liability company is the ability to attract investments by issuing shares.
COMPANY WITH LIMITED LIABILITY (GMBH):
- Share capital is 25 000 EUR. It must be fully paid at the time of registration of the company in the German Commercial Register or provided with a bank guarantee in the unpaid part. If the company has two or more founders, during registration, one can pay half of the authorized capital of 12,500 EUR, and the other half can be paid during the first year of operation. The liability of the founders is limited to their contributions to the authorized capital.
- Director must be at least one natural person and there is no residency requirements. The functions of a director can also be performed by a founder who has a permit to work in Germany.
- Requirements for founders. There must be at least one member of the company, natural or legal person, there is no residency requirements.
- There is no requirement for availability of the secretary. Although, a tax consultant must work for the company on a permanent basis.
- Information about directors and shareholders is indicated in the Trade Register.
- It is necessary to maintain and submit an annual financial report.
TAXATION
All companies registered in Germany pay almost 45% of taxes on their income, but the country regularly develops preferences and benefits for start-up businesses.
The German tax system sets the following duties for legal entities:
Corporate tax - 15%.
VAT is 19%, but in some cases a reduced rate of 7% is applied.
Capital gains tax is 25% of all income from deposits and securities.
Industrial tax is a regional tax with a base rate of 3,5%, but depending on the land can vary up to 18%.
Solidarity allowance (to support weak regions) is 5,5% of corporate tax or capital gains tax.
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DOUBLE TAXATION AVOIDANCE AGREEMENTS
Germany has entered into many international agreements on the avoidance of double taxation including agreements concluded with Ukraine.
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If you want to register a company in Germany, please contact our lawyers for advice:
+38 (098) 737-88-88
We will help you to set up a company in Germany or in any other jurisdiction.
The cost of registering a company in Germany is formed for each specific specific business and depends on the chosen organizational form, check the final price of the finished company with our lawyers depending on your individual needs.
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