Incorporation in Germany: Highlights

•    The most frequent type of entity formed in Germany – LLC (or GmbH) can be 100% foreign owned;

•    LLC’s in Germany requires a minimum of i) one director and ii) one shareholder.

•    The minimum paid up share capital €25,000;

•    With the guidance of our Healy Consultants’ experts, the process of incorporation can take only three weeks;

•    Corporate bank account can be opened in two weeks;

•    For successful business setup, entrepreneurs still have to: i) personally travel to Germany and ii) submit office space lease contract to obtain visa status;

•    Germany corporate tax averages around 30%, payable at a two-level system – federal level, fixed at 16% and municipal level with rate ranging between 7-17%.

•    There are two VAT regimes in Germany. Low 7% rate, applicable for everyday items like food, medicine, etc. and high 19% VAT rate for everything else;

•    Company setup in Germany suffers withholding tax of 26%, but having vast 90 Double-Tax Agreements, this number can be decreased between 5 and 15%;

•    Progressive personal taxes are levied between 0 and 45%, depending on annual income. For income up to €53,000 the rate is 14%;
•    Companies in Germany benefit from no export duties with many countries listed here;

•    There are no capital or exchange controls, thus transferring funds from abroad and converting them into Euro is easy;

•    No duties on foreign goods are applicable in all four free trade zones;
•    Consequently, companies will benefit from the federal and state interest reduced loans, available for SME’s;

•    Germany is preferred place for registering Intellectual Property.  As a part of WTO’s Agreement (TRIPS), violators of IP’s are under heavy surveillance;

•    The Government aims to reduce strain on businesses by providing four labour-related incentive programs;

•    Knowing that “Made in Germany” is widely recognized trademark, synonymous for quality, companies incorporating in Germany have an unspoken guarantee for international acceptance.

Aidan Healy
Business Owner
Healy Consultants
Chopinstrasse 27
Stuttgart, Germany
Tel: (+65) 6735 0120