6+1 Tips How to Set up a Company in Germany

Being a fiscally successful country, Germany is host to thousands of newly registered businesses each year. By 2022, it is expected that just under 218,000 new businesses will have registered in this economically steadfast country. Setting up a GmbH or a UG company in Germany is clearly a smart choice – it is the globe’s fourth largest economy. The critical question you might be looking for is – how to set up a company in Germany? The purpose of this article is to explore the crucial steps needed to register a business in Germany. We have covered details on proof of representation, when to set up a business bank account and how long it takes to register your company.

1. Choose the legal form before setting up your company in Germany

The first step to take in order to set up a company in Germany is to select the legal form for your company. Two of the most common legal forms to choose between are GmbH (Gesellschaft mit beschränkter Haftung) and UG (Unternehmergesellschaft), which are essentially both limited liability company forms. Though there are no legal or tax differences between the two, they differ in the sense that a UG business is a slightly newer choice that necessitates lower equity. This is why the UG is often colloquially referred to as a mini-GmbH.

To be more specific, a GmbH option requires a minimum capital of 25,000 EUR, whereas, potentially, the UG only requires 1 EUR – the latter being the clear choice for those with less capital.

2. Preparing the required documents for company registration in Germany

What is next required is for you to prepare your documents that are needed for company registration in Germany. All persons can set up a company in Germany, whether they live in Germany or abroad, but the documents required from shareholders differ depending on whether they are natural persons or legal entities. Shareholders who are natural persons need to simply provide their identity documents – which includes proof of your address. If the shareholder will be another company, you will require certain documents. The documents vary from country to country.

To set the wheels in motion for company registration in Germany, if the shareholder will be a company from outside of Germany, proof of representation of the company is necessary to confirm that the company actually exists. For this, if you have a UK company, or a company from the USA, you will require a certificate of incorporation which is a document that affirms your company’s legal existence. In the UK, notaries are responsible for issuing this confirmation, and in the USA, this is carried out by the company secretary.

3. Notarising your newly registered company

You will need to get your documents notarised to register a company in Germany. The difference between forming your company in Germany, compared with other countries, is that instead of requesting a lawyer, the process is done with a notary. An appointment with a notary is the standard way of getting your certificate of incorporation certified.

4. Pay in the share capital

After you have had your documents notarised, the next step to achieve company registration in Germany is opening your business bank account in order to deposit your specified capital investment. The main difference between GmbH and UG capital deposits is that for GmbH you are permitted to deposit a minimum of 12,500 EUR when you are being incorporated. In contrast, the minimum share capital by a UG is 1 EUR. We advise, however, that you establish a minimum of 300-1,000 EUR, which is the recommendable amount.

A word of advice is that, even though it is possible, you should only ever pay your share capital into a cash account if you cannot open a business bank account.

5. Getting your company entered into the commercial register

Your company registration in Germany will then be recorded and entered into the commercial register after you have submitted your documents – (which should be done electronically). At this stage, you will need to wait an average of 2 to 6 weeks while your company is recorded.

6. Receiving your tax, VAT and EORI numbers

Finally, once you have set up a company in Germany, you will receive your tax numbers, your VAT number and the EORI number.

How shelf companies are beneficial by registering a business in Germany?

There are certain ways to bring your business idea to market faster – namely, looking into shelf companies. Buying a shelf company in Germany has many advantages – the main one being that these types of businesses will have already been registered in the German commercial register, which enables you to begin your business activity instantly. What this means is that it is possible to bypass several steps that you would otherwise need to go through when forming a new company by choosing a shelf company.

Conclusion

Registering your company in Germany needn’t be a complex issue. It is recommended that you explore expert local consultants such as GmbH-UG.com to begin the process. Not only will they handle each and every part of the process related to company formation, with power of attorney they will guarantee that no mistakes are made along the way. GmbH-UG.com can even assist you from abroad. Explore GmbH-UG.com and begin considering your options to set up a company in Germany, effortlessly.