Company Registration in Germany
Germany has the largest economy in Europe and the fourth largest GDP, the exchange rate and the fifth largest GDP in the world. It is one of the founders of the European Union and the euro zone. The economic position of this country in the world was raised after the Industrial Revolution and at the same time with its formation, and it is considered as a leading and innovative country as well as an investor in research projects to this day.The advantages of company registration in Germany include the following.
Benefits of Investment in Germany:
- No need for a German language degree
- Strong economy and industry in the world
- Obtaining permanent residence for all family members (children under 18 years old)
- Germany’s membership of the European Union and the Schengen Agreement
- All European citizenship rights
- Ability to become a permanent resident of Germany
- Under license from a German company
- Obtaining long-term loans with low interest rates (maximum 4%)
- Opening a bank account all over Europe
- Possibility to use insurance and medical services and free education in Germany
- No need for a German partner
- No need to hire an employee
Germany Trade & Invest comments on company registration:
The GTAI analytics site offers the following ten reasons to invest and register a company in Germany:
- Germany is the economic engine of Europe and the fourth economic country in the world.
- Germany plays a key role in the global economy and is the third largest exporter in the world with an index of 469 billion euros in the FDI index, which is in close competition with China and the United States.
- Germany is a good choice for foreign investment.
- Germany is among the best in the world on production and its products are of guaranteed quality, and the labor rate has recently fallen in Germany.
- Due to the high level of education in Germany, both at pre-university (12-year education) and at university (higher education), the labor force in this country is also skilled and efficient.
- Germany is among the most creative country in Europe. The government provides huge budgets for inventors to spend on innovation and progress.
- Germany has the best global infrastructure on communications, energy and the global transport system.
- Offering motivating and future programs for investment and registration of a company in Germany attracts investors with any orientation and in any field.
- The tax rate for investment and registration of a company in Germany is low, and entrepreneurs and investors have more opportunities due to the amendments to the tax law.
- The government supports investors and provides a safe environment for investment and company registration in Germany.
Company Registration Steps in Germany
- Issuance of invitation
- Obtaining a Schengen visa
- Checking and obtaining confirmation of the chosen name in Germany
- Developing a business and financial plan in English and German
- Obtaining business plan approval from the commercial office
- Notarized time coordination
- Registering a company in the notary in the name of an Iranian person or partners
- Opening a bank account in the name of an Iranian person or partners
- Registering a company in the Nuremberg tribunal
- Joining the chamber of commerce
- Applying for an appointment at the embassy
- Completing and preparing business plan and necessary documents for delivery to the embassy
- Following-up residence matters through the Nuremberg office for foreigners and the German embassy in Iran
- Applicant insurance in Germany
- Renting an office or residence in Germany
- Obtaining a visa to join other family members
- Preparing articles of association
- Renting an apartment
- Renting a workplace apartment
- Renting virtual address
- Family insurance
- Registering in the tax office
- Preparing company registration documents (articles of association, shareholder tax, etc.).
- HRB number Issuance
- Registering in the commercial office
- Contract between the company and the CEO
Types of Companies in Germany
German law distinguishes between limited companies, joint-stock companies and other types of participatory companies. Awareness of the different types of business structures and also the legal process of establishing a company in Germany are very important.
Unternehmergesellschaft (UG), LTD in English, known as “mini-GmbH”, can also be established with a capital of only 1 euro. This company is the most popular for new businesses because it is more flexible than the usual GmbH. The UG establishment can be completed in less than a week. We can remotely form UG companies. Entrepreneurs can obtain a permanent residence permit as a manager of a UG company.
GmbH (Gessellschaft mit beschrankter Haftung) is also known as a private limited liability company. This is the most common type of business in Germany and is equivalent to a limited company (LTD). Currently, the minimum share capital is 25000 euros.
Capital can be added into the company through asset or cash. If the assets are added, the value of the underlying assets must be stated in the company’s articles of association. The shares of the German company GMBH are not allowed to be listed on the stock exchange, and they may not be traded publicly. GMBH management is guaranteed by the annual meeting of shareholders. Daily decisions are made by the company manager, which is determined by the shareholders’ meeting. There is no restriction to the return on profit.
German residence law ultimately determines the conditions for running a self-employed business in Germany. Under European law, EU citizens are able to establish a company in any European countries. However, it is obliged to inform the local registry office (Einwohnermeldeamt) and provide the necessary financial resources.
It is possible to set up a German branch to enter the market. However, this is not a legal entity. The responsibility and profit relates to the parent company.
The German subsidiary company is a separate legal entity used to enter the market with an independent local business, and the shares may be held by a foreign legal entity.
AG – A private limited company is a law firm mostly used by big businesses and public trading companies. A minimum share capital of € 50,000 is required to form an AG company. Members are only responsible for the share of capital. The board of directors manages the company, and they are supervised by a separate board of directors. Germany AG must audit its accounts by a registered auditor.
Germany KG – Limited Participation
Setting up a KG company is also an option which two or more partners work together. The partners may be silent partners or public partners. Silent or passive partners are only related to capital and all partners are fully responsible. The silent partners are not allowed to interfere in the day-to-day decisions of work and management.
GmbH Ltd is the most suitable type of company for small and medium businesses.
The registration of this type of company is done by German lawyers in one of the notary offices of the German government and in less than two working weeks (the presence of the owner in the notary office of Germany and the bank is required only one day) and together with the bank account in the name and with the right to deposit and withdraw of the Iranian owner and founder of the company will be delivered to the applicant.
It should be emphasized that this way does not require any German partner or employee and the Iranian person or persons who own the company will be able to deposit and withdraw personally from their company account from all over the world.
The Process and Steps of Absentee Registration of the Company
To register a business, the business owner needs to contact a notary public to submit a certified electronic form. For companies where business registration is also a part of the establishment process, the limitation of liability will only be effective after company registration. This is more about relocation cases.
For absentee registration of the company in Germany, your representative will follow the steps on behalf of the shareholders and managers after preparing the initial documents. All steps of the absentee registration of the company can be done in one day. To register a company remotely, a power of attorney is provided that can be signed at your local notary. In this case, you will not need to visit the destination country to form a company.
The Absentee Registration Documents of the Company
To register a company remotely, documents must be emailed and submitted to the lawyer in charge of the work. First, your documents are officially translated and approved by the German Embassy. The certified documents have been sent to your representative in Germany in addition to the justification plan, so that the company can be registered in your name after the justification plan is approved by the company registration office in the state desired for you in Germany. After registering the company, a bank account will be opened for your company and you will receive a quarterly visa by visiting the embassy. Then you have to go to Germany and do the initial steps of the justification plan. Write down community files.
The district court administers the German business registration and it is open to the public free of charge, but you can also check online through the Joint Registration of the Federal Republic of Germany.
The next steps after registering a company, including other things, include the VAT registration on Germany. We remind investors that if they intend to do business, they must obtain an EORI number for the registered company.
Finally, you should know that Germany is one of the best legal areas in the world for investment and attracts many foreign investors and entrepreneurs.