How to Set Up a Company in Germany as a Foreigner (2026)

Should you actually incorporate in Germany?

Germany has a combined corporate tax rate of approximately 30% (15% Körperschaftsteuer + ~5.5% solidarity surcharge + Gewerbesteuer 7–17% depending on municipality). It has mandatory notarisation, language barriers for non-German speakers, and complex annual compliance.

• You should incorporate in Germany if:
• You are building a business specifically for the German market
• Your German clients require a local entity for procurement compliance
• You want to hire German employees under German employment law
• You are a German resident who wants a local company aligned with your personal tax position
• You are establishing a German subsidiary of an existing multinational

• You should consider alternatives if:
• You're a solo digital business with a few German clients (UK Ltd or Estonian OÜ work fine for invoicing German companies)
• You're a non-resident primarily serving non-German markets
• You want low compliance overhead (Germany is not it)

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The two main structures

GmbH (Gesellschaft mit beschränkter Haftung) Germany's standard private limited company.

• Minimum capital: €25,000 (at least €12,500 must be paid into a German bank account before registration can be completed)
• Formation: Requires a German Notar (civil-law notary) to authenticate the Articles of Association (Gesellschaftsvertrag). This is not optional.
• Timeline: 4–8 weeks
• Annual compliance: High — mandatory commercial register publication, notarised resolutions for significant decisions
• Credibility: Maximum — "GmbH" is the gold standard in German B2B

UG (Unternehmergesellschaft haftungsbeschränkt) The "mini-GmbH" introduced in 2008 for entrepreneurs.

• Minimum capital: €1 legal minimum (practical minimum €1,000–5,000 for credibility)
• Profit retention requirement: 25% of annual profits must be retained until accumulated reserves reach €25,000 (then can convert to GmbH)
• Must be labelled: "haftungsbeschränkt" — the full "UG (haftungsbeschränkt)" must appear on all business documents
• Credibility: Lower than GmbH; some German enterprises will not contract with a UG
• Formation: Still requires notarisation (but less complex for standard-form articles)

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Step 1: Prepare your documents

• For a GmbH or UG, you need:
• Passport (all shareholders and managing directors)
• Proof of address for all shareholders and directors
• Proposed Articles of Association (Gesellschaftsvertrag) — typically drafted by a German lawyer or the Notar
• Shareholder list
• Proposed managing director appointment

For non-EU foreigners: A certified German translation of your passport may be required depending on the Notar. All documents submitted to German authorities must be in German or accompanied by certified translations.

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Step 2: Draft Articles of Association (Gesellschaftsvertrag)

The Gesellschaftsvertrag governs the GmbH — equivalent to the UK's Memorandum and Articles of Association.

For a standard single-shareholder, single-director GmbH/UG, the BMJV (Federal Ministry of Justice) provides a standardised template. Using the template reduces notary fees. For anything non-standard (multiple shareholders, profit participation rights, special voting arrangements), a customised Gesellschaftsvertrag drafted by a lawyer is needed.

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Step 3: Visit a German Notar

• This step cannot be skipped and cannot be done remotely. A German Notar must:
• Authenticate the identities of all founding shareholders and the managing director(s)
• Read aloud the Articles of Association in German (legal requirement)
• Authenticate the signatures on the Gesellschaftsvertrag and related documents

If you are outside Germany: You have two options: 1. Appoint a holder of a notarised power of attorney (someone who can act on your behalf at the Notar's office) 2. Travel to Germany for the Notar appointment and return trip

Notary fees are regulated by the German Gerichts- und Notarkostengesetz (GNotKG) and are calculated based on the company's share capital. For a GmbH with €25,000 share capital, notary fees are typically €500–1,500.

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Step 4: Open a German pre-incorporation bank account

Before the GmbH can be registered at the Handelsregister, the share capital (or half of it) must be deposited into a German bank account. This is a pre-incorporation account opened specifically for this purpose.

• German banks that offer pre-incorporation accounts:
• Postbank
• Some Volksbanks and Sparkassen (savings banks)
• Fidor Bank
• Kontist (for freelancers; check current GmbH support)

The Notar typically advises on which banks to approach. Once the capital is deposited, the bank issues a payment confirmation letter (Einzahlungsbeleg) — this goes to the Notar for submission to the Handelsregister.

Digital banks (for after incorporation): Qonto, Penta/Qonto, Holvi, N26 Business are used by German GmbHs. They open more quickly than traditional German banks.

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Step 5: Submit to the Handelsregister

• The Notar files the incorporation documents with the Handelsregister (Commercial Register) at the local Amtsgericht (district court). The submission includes:
• Authenticated Gesellschaftsvertrag
• Shareholder list
• Managing director appointment and acceptance
• Bank certificate confirming capital deposit
• Sample signature of the managing director (Musterzeichnung)

Handelsregister registration fee: Approximately €150–300 depending on the company's share capital.

Processing: Typically 2–4 weeks from submission.

The GmbH does not legally exist until it is registered in the Handelsregister. You cannot contract in the GmbH's name or accept payments until registration is complete (though you can trade as "GmbH in Gründung" — GmbH in formation — in some limited circumstances).

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Step 6: Tax registrations

After Handelsregister registration:

Finanzamt registration: Submit a business registration questionnaire (Fragebogen zur steuerlichen Erfassung) to the relevant Finanzamt (tax office). This triggers registration for corporation tax, trade tax, and VAT (if applicable). The Finanzamt then assigns the company a Steuernummer (tax number).

VAT (Umsatzsteuer): If your turnover exceeds €22,000 (Kleinunternehmer exemption), register for VAT. Standard rate: 19%. Quarterly VAT advance returns (Umsatzsteuervoranmeldung).

Gewerbeamt: Register the business at the local Gewerbeamt (trade office) — Gewerbeanmeldung form, typically €20–30 fee. This triggers the trade tax (Gewerbesteuer) registration.

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Annual compliance overview

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Real costs (Year 1, GmbH with €25,000 capital)