STARTING A BUSINESS IN GERMANY
Starting a business in Germany is generally a straightforward process that has a series of formalities that are required to be followed. The procedures and regulations do not have significant differences compared to English speaking countries. There is no restrictions on repatriation of profits and similar to most countries, German law distinguish between limited companies, joint companies and other types of partnership companies. It is important to be aware of the different types of business structure within Germany and also the legal process for starting a business.
The German law of residency ultimately determines the conditions and circumstances for running a business in the form of self-employment in Germany. In accordance with the European law citizens of the European union are able to start a company in any of the European states however it is required to inform the local registration office (Einwohnermeldeamt) and deliver the necessary funds. For NON-EU entrepreneurs it is also possible to start a company in Germany and obtain local residency through the German business immigration.
The corporate tax rate in Germany is around 31% on average.
The corporate tax rate includes a corporate income tax of 15%, solidarity surchage 0,825% and a regional trade tax. The local tax for trade varies between 14-17.15%.
The local German tax is not deductible as a business expense.
Possibility of obtaining a permanent residency permit.
Types of Businesses in Germany
The Unternehmergesellschaft (UG) equivalent to the English LTD, known as “mini-GmbH”, could also be established with a capital of only €1. This entity is most popular for new businesses as it is more flexible than the regular GmbH. It is possible to start a UG within 2 weeks. We can form UG companies remotely.
GmbH (Gessellschaft mit beschrankter Haftung)
GmbH, also known as limited liability company. This is the most common type of business in Germany and is equivalent to a limited company (LTD). Currently the minimum share capital known as (Stammkapital/Grundkapital) is €25,000.
We can assist you with your incorporation, virtual office and the opening of a bank account – remotely. Through our procedures no personal visits are required. Contact us for more information.
Have you also considered establishing your business in The Netherlands?