Germany

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Germany

GENERAL INFORMATION ABOUT JURISDICTION

Germany (in its full name the Federal Republic of Germany) is a federal state of Central Europe with interesting history and promising future. Germany has a vast territory, rich natural resources and industrious people, which enabled the country to become one of the most economically and politically powerful state in the world after two devastating wars.

Germany consists of 16 states that are equal to each other. Industry and agriculture are developing parallel. Stable legislation and economy make Germany a prestigious place for doing business. Also, please remember a huge Russian speaking expat community in Germany, which in turn makes life of immigrants from former Soviet Union much easier.

The German Law does not have any restrictions in terms of German company formation by non-residents. So, non- residents, both individuals and legal entities, may be founders and act as shareholders of a company incorporated in Germany without any restrictions.

   

1. LAW

Company activity in Germany is regulated by Joint Stock Companies Law and Limited Liability Companies Law.

2. GERMANY COMPANY INCORPORATION

2.1. Types of companies

The Germany law provides such corporate form as an entrepreneur, limited liability company, joint stock company, civil law company, open trade company, limited partnership, alliance.

 Foreigners may register only Joint Stock Company (AG) and Limited Liability Company (GmbH).

2.2. Joint Stock Company (AG):

  • The minimum authorized capital – 50 000€, 25% of which must be paid by the moment of Germany company incorporation. If there is one shareholder in the company, he must provide guarantee for unpaid part of the authorized capital.  
  • Shares – registered, bearer, preference. Shares may be par value (from 1€) and without it.
  • A chairman of the board manages the company in Germany (no residency required, but not in all federal lands). The Board is appointed by the Supervisory Board for a term not exceeding 5 years.   
  • Shareholders – at least 1, individual or legal entity, no residency required.  
  • Secretary – not required.
  • Publicly available information: information about directors and shareholders. 
  • Company in Germany is obliged to keep and submit an annual financial report. 

2.3. Limited Liability Company (GmbH):

  • The minimum authorized capital – 25 000€, 100% of which must be paid by the moment of company incorporation or guaranteed for unpaid part. If there are two or more shareholders in the company, it is possible to pay 50% of the authorized capital by the moment of incorporation and other 50% – during the first year of the work.   
  • Shares – the minimum cost of a share – 250€.
  • Director – at least 1 individual, no residency required (but not in all Germany lands). His functions may be performed by the shareholder, but in this case he must have a work permit in Germany. 
  • Shareholder – at least 1 members, individual or legal entity, no residency required.  
  • Secretary – not required.  
  • An auditor should work in the company on a regular basis. 
  • Publicly available information: about directors. Information about shareholders kept in the Commercial Register.
  • Germany company is obliged to keep and submit an annual financial report and to be audited. 

3. TAXATION

There are federal and local taxes in Germany. Local taxes may vary depending on the land where the company does business. 

Corporate tax – 15%.

Industrial tax – 15-20% (depends on the land).

Income tax – from 16%.

VAT – 19%, but is fully refundable on export, as well as in several other cases.

Tax on salary (paid by the employer) – 21-25%.

At first glance, taxes in Germany are rather high, but the law provides a large number of preferences and privileges, that may significantly reduce the tax burden.

4. CURRENCY CONTROL

None.

5. DOUBLE TAX AVOIDANCE AGREEMENTS

Germany concluded more than 70 agreements on avoidance of double taxation, including Ukraine.

6. PARTICULARS OF COMPANY REGISTRATION IN THE GERMANY

A federal structure of Germany assumes a certain degree of autonomy of its lands, but the local law differs not so much to allocate some lands to be the most preferable for purchase a Germany company.

Incorporation a company in Germany will give you an opportunity to obtain a residence permit.

 

If you would like to buy a company in Germany, please kindly refer to Campio Group office where specialists would respond all your questions and would assist in company registration in Germany.

 

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