Establishing a company in Germany

Germany is a parliamentary republic in West-Central Europe, and although it functions as one unified and sovereign state, it is actually comprised of 16 states that form a republic, much like the U.S. or Australia. It borders on Denmark, the Baltic Sea and the North Sea, Holland and Belgium to the west, France to the southwest, Switzerland, Luxembourg, Lichtenstein and Austria to the south, and the Czech Republic and Poland to the east. Its location, as well as the powers active in the region throughout history, have made Germany an economic, cultural and social superpower. It is currently considered the most powerful nation in Europe, its largest economy and fourth largest globally.

The capital Berlin, is again the nationwide capital after the reunification of East and West Germany. The official language is German but locals are generally also proficient in English. The population is 81.8 million. Its rich and complex history is closely entwined in the history of the European continent and of the entire world. Various iconic historical chapters of Germany’s past include the settlement of Germanic tribes in the region, the days of the Roman Empire there, the Prussian Empire, and of course World War I and II, both of which were initiated by Germany and shocked both the country and the rest of the world.

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Four things you did not know about Germany:

  • The National German football team is considered particularly good and efficient in terms of its economic management. All teams in the upper leagues, excluding two, are owned by their fans, who serve as shareholders. The teams are all financially balanced and demonstrate impressive achievements in European games, such as in UEFA Euro 2012 when Germany won all three final tournament games, making it an all-German contest.
  • Although Germany does have the famous Autobahn highway where no speed limits are imposed, the actual maximal recommended speed is 130 km/h and there is some enforcement of this issue in the excellently maintained Autobahn.
  • Despite its strong economy, significant work force and strong currency, Germany remains one of the biggest manufacturing countries in the world. In the years 2003-2008 it was even the biggest exporter of goods in the world, ranked higher than China.
  • The Turks are a large ethnic minority in the country, comprising 4% of the general population. The Turkish immigration began when significant reinforcement of the work force was needed to recuperate from the damages of World War II and Turkish natives provided a large and inexpensive solution.

Germany’s economy

Germany has a social market economy based on principles of free trade and capitalism, but also tempered by social-democratic tenets. The German work force is considered particularly skilled and the economy in general is transparent, efficient, innovative and with very little corruption. GDP is 3.2 trillion USD and per capita income is 40,000 USD. The German reunification, although already many years in the past, is still evident in the division of East and West Germany, and its central government invests great efforts to rehabilitate the eastern regions in terms of infrastructure, society and economy. As stated, it has the strongest and largest economy in Europe and fourth largest in the world. The services sector contributes the most of all local sectors to GDP, although industry and even agriculture are still significant revenue generators.

Germany is a leader in innovation and initiatives in the EU, so naturally the local currency is the euro. As a full EU member state and a great influencing force within it, the German economy is greatly dependent on trade agreements with its neighbors. Also, this innovative and well-organized state exports goods and services to dozens of destinations.  Establishing a company in Germany is a clear and structured process with many financial and operative advantages for business activities with the EU and the world. Beyond its membership in the EU, Germany is also a member of the OECD and the EFTA (European Free Trade Association).

Additional information about establishing offshore companies in Germany:

General
Type of company
GmbH
Relevant Companies Law
German Code of Corporate Governance Limited Liability Companies Act
Offices
Law requires companies to provide a local office address
Language of original incorporation documents
German
Finance and Taxation
Currency
EUR
Corporate tax rate
15%
Standard share capital
25,000 EUR, 25% paid in advance
Office Holders
Secretary
Obligation to appoint company secretary
Not required
Obligation to appoint local secretary
Irrelevant
Type of entity that may function as company secretary
Irrelevant
Director
Obligation to appoint company director
Required
Obligation to appoint local company director
Not required
Minimum number of directors
1
Type of entity that may serve as company director
Individual
Shareholders
Obligation to register shareholders
Required
Obligation to register local shareholders
Not required
Minimum number of shareholders
1
Type of entity that may register as shareholder
Individual and/or company
Type of shares
Registered shares
Accessibility of Information
Company registrar
Information regarding office holders may be accessible to the public
Annual Assembly and Reporting
Obligation to hold annual assembly
Not required
Obligation to prepare financial reports
Required
Obligation to submit financial reports
Required