Setting up a German GmbH without living in Germany

You do not need to live in Germany, hold a German passport or have a residence permit to own or manage a German GmbH or UG. In 2027, a founder abroad needs four things: a notarial deed (signed online, abroad or by power of attorney), a German bank account, a German business address and, after registration, a tax number. Below, we explain each step, how long it takes from abroad and what it costs.

Most of our company formation in Germany clients have never lived in Germany. They are UK entrepreneurs expanding into the EU, US and Canadian companies setting up a European subsidiary, and founders from China, Hong Kong and India who want a German base for sales across the single market. The process is the same for all of them; what differs is the paperwork their home country issues and how they sign.

Who can be a shareholder and managing director?

German company law sets no nationality or residence test. Since the 2008 reform of the Limited Liability Companies Act, a GmbH can be owned and managed entirely from abroad, and German courts have since confirmed that a managing director (in German: Geschäftsführer) does not need to be able to enter Germany at any time.

Honest downside: what the law allows and what a bank accepts are two different things. A company whose shareholders and managing director all live outside the EU faces closer scrutiny when it opens an account. We cover this in detail in our guide to opening a German business bank account as a non-resident.

A residence permit is a separate question. You only need one if you move to Germany or work there regularly yourself. Managing the company from London, Toronto or Shanghai does not require one. Citizens of the EU, the EEA and Switzerland need no permit in any case.

Step 1: Choose the legal form and prepare the documents

Most non-resident founders choose between two forms:

• GmbH: share capital of 25,000 EUR, at least 12,500 EUR paid in before registration. Recognised internationally, preferred by banks and larger customers.

• UG (haftungsbeschränkt): share capital from 1 EUR, but 25% of each year’s profit must be retained until the capital reaches 25,000 EUR and it is converted into a GmbH. Cheaper to start, sometimes viewed with caution by suppliers. The recommended share capital amounts at least 500 EUR.

Our legal form configurator helps you choose. For the documents, natural persons need a valid passport. A foreign company acting as shareholder needs its articles and an up-to-date register extract, each with an apostille and a certified German translation.

Good to know: do not order these documents too early. German notaries and registry courts generally expect a register extract to be recent, often no older than 30 days. We send the exact list only after the company name and structure are settled, so nothing needs to be reordered.

Step 2: Sign the notarial deed from abroad

Every GmbH and UG must be founded by notarial deed according to the Section 2 GmbHG. A founder abroad has three options:

Which route works for which passport is a question in its own right, and we answer it country by country in Online notarisation or power of attorney?.

Step 3: Open a bank account and pay in the share capital

After the deed is signed, the company exists as a GmbH “in formation” (GmbH i.G.). It opens a business account, the shareholders pay in the capital, and the bank confirms the payment. Only then can the notary file the application with the commercial register (in German: Handelsregister).

For non-residents this is the step most likely to cause delay. Banks must identify every managing director and every beneficial owner under the German Money Laundering Act, and some will only do so in person.

Step 4: German business address

The company’s registered office must be in Germany, and its business address is entered in the commercial register. If you have no premises, a virtual office gives the company an address that can receive official post. Make sure post is scanned promptly: deadlines from the tax office and the registry court start when the letter arrives, not when you read it.

Step 5: Commercial register, trade registration and tax number

Once the capital is confirmed, the notary files the application, the court enters the company and the following registrations follow:

1. Commercial register entry (in German: Handelsregister): typically 1-6 weeks after filing, depending on the court.

2. Transparency Register (in German: Transparenzregister): entry of the beneficial owners.

3. Trade registration (in German: Gewerbeanmeldung) at the local trade office (in German: Gewerbeamt).

4. Tax registration with the tax office (in German: Finanzamt): the tax registration questionnaire, then the tax number and the VAT ID.

The tax office takes a closer look at companies whose management is entirely abroad. Expect questions about where business decisions are made and what the company will actually do in Germany. Clear, consistent answers in the questionnaire save weeks.

How long it takes and what it costs (2027)

All official fees are explained in Company Registration Fees in Germany (2026), and the annual running costs in Costs of maintaining a company in Germany in 2026.

If one to three months is too long, a ready-made company is already registered, capitalised and has a bank account. See Shelf company or new formation?.

Tax: where the company is taxed

A German GmbH is taxed in Germany on its worldwide profit: corporate income tax plus solidarity surcharge (15.825%) and trade tax, which depends on the municipality. Dividends paid to a foreign shareholder are subject to German withholding tax, which the double taxation agreement with the shareholder’s country usually reduces.

Honest downside: if the managing director takes all decisions from abroad, the company’s place of effective management may be held to be in that country, and that country may claim the right to tax it too. This is the most underestimated risk for non-resident founders. Discuss it with a tax adviser in both countries before you sign. Our tax calculator gives a first estimate of the German side.

Our experience

We at GmbH-UG.com incorporated around 200 companies for clients from 53 countries in 2026. On average, setting up a company took 2 months, although we always had everything ready within 24 hours. The 2 months include registration in the commercial register and the allocation of tax numbers. In our experience, the fastest commercial register was in Munich in 2026, and 8 out of the 10 fastest tax offices were in Bavaria.

Setting up from abroad needn’t be complicated

German bureaucracy has a reputation, but the route for a founder abroad is well-trodden: the same four steps, in the same order, every time. What makes it slow is a missing apostille, a bank that wants to meet you, or an unclear answer to the tax office. We coordinate the entire process for you, including the power of attorney so you can sign in your own country, the bank account, the address and all the registrations. Book a 15-minute call to discuss your case.

FAQ

Can a foreigner set up a GmbH in Germany?
Yes. German law sets no nationality or residence requirement for shareholders or managing directors of a GmbH or UG. A founder abroad signs the notarial deed online, in Germany or by power of attorney, opens a German bank account, provides a German business address and registers for tax.

Do I need to live in Germany to be a managing director of a GmbH?
No. Since the 2008 reform of the GmbH Act, a managing director can live anywhere, and German courts have confirmed that they need not be able to enter Germany at any time. You only need a residence permit if you move to Germany or work there yourself.

Can I open a German GmbH without visiting Germany?
Yes. Holders of a compatible EU eID or a German electronic residence permit can sign online by video. Everyone else signs a power of attorney before a notary in their home country, which is apostilled and used in Germany. The other option is to sign in front of the German Embassy or Consulate.

How long does it take to set up a GmbH from abroad?
Typically one to three months in 2027, from preparing the documents to receiving the tax number and VAT ID. The power of attorney and the bank account are usually the longest steps. A ready-made company shortens this to a few days.

How much does it cost to set up a GmbH as a non-resident?
The official fees (notary, commercial register, trade registration) start at around 700 EUR for a GmbH and around 550 EUR for a UG. Non-residents add the cost of apostilles, translations and a German business address. The share capital is not a cost: it remains the company’s money.

Where is a German GmbH taxed if the director lives abroad?
The GmbH is taxed in Germany on its profits. But if all management decisions are made abroad, the other country may treat the company as resident there too. The double taxation agreement decides which country may tax; take advice in both countries before you start.

Written by

Kristof Tomasz

Managing Director, GmbH-UG.com / Formatera

Kristof Tomasz is Founder & Managing Director of Formatera / GmbH-UG.com. Since 2017, he has focused GmbH-UG.com on one clearly defined target group: international entrepreneurs, investors and companies that want to set up, acquire or restructure a German GmbH or UG, often without living in Germany themselves. Under his leadership, GmbH-UG.com has grown from a pure formation service into a single point of contact for the entire corporate lifecycle of foreign-owned German companies. This covers company formation, the acquisition of shelf companies (ready-made companies), changes of managing directors and shareholders, relocations of the registered office and liquidations.

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