Germany Company Formation


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ENGAGEMENT COSTS

Year 1 incorporation Euro 7,000 *

Year 2 incorporation Euro 4,250*

Corporate Nominee service fee
Euro 1,800 **

Company de-registration
US$1,450

* Depending on corporate structure and professional services required.

**Excludes Euro1,100 refundable deposit.

Click on the logo above to review sample PDF invoice

Germany's relatively high corporate tax rates, complex tax legislation and high incorporation costs make Germany company formation a less attractive option for international entrepreneurs. The following information will help you determine whether Germany company formation is the optimum corporate solution to meet your business objectives.

Advantages of Germany Company Formation

With the largest economy in Europe and a leading export market in machinery, vehicles and household equipment, Germany offers a strong economic environment for forming a company.

A German Limited Liability Company (GmbH), the most popular type of Germany company registration, requires only one director and shareholder.

The federal government in Germany offers a wide range of incentive programmes, including loans and grants, depending on the nature of the company and its intended location. Some areas of Germany offer capital investment grants of up to 50% to small and medium-sized enterprises. Local government incentives may also be offered in the form of beneficial tax rates, but these are not generally available in the major cities.

Germany has an advanced legal and world-class banking infrastructure.

Germany has signed Double Taxation Treaties with more than 80 countries around the world, providing relief from withholding tax on dividends, interest and royalties. These agreements follow the Organisation for Economic Cooperation and Development (OECD) model.

In its 2011 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks Germany as the world’s 10th-most competitive economy. Addtionally, The World Economic Forum's Global Competitiveness Report ranks Germany as the world's 6th-most competitive economy.

According to the 2012 Quality of Living Survey by Mercer Human Resources, Germany has seven of its cities rated in the Top 50 cities globally: Dusseldorf (6th); Frankfurt (7th); Munich (7th); Berlin (17th); Hamburg (23rd); Nurnburg (24th); and Stuttgart (30th).

Disadvantages of Germany Company Formation

A German Limited Liability company requires a minimum capital of €25,000 Euros (US$35,300).

A German company must maintain accounts and submit annual financial statements.

Companies in Germany are liable to paying two levels of tax: corporate tax of 15%, and trade tax levied and determined at the municipal-level. As there are no uniform rates for the overall tax burden of corporations across the country, firms may find themselves paying between 22.83%-29.83%, depending on the town of where it is based.

The German labour market is highly rigid, according to World Bank Group's 2013 Ease of Doing Business Index, Germany ranked 106th out of 183 countries for 'Starting a business', indicating difficulty for companies in the initial setup stage.

A Germany company is subject to value added tax (VAT) of 19% on all chargeable goods and services delivered in Germany, including intra-company transactions. A lower rate of 7% is charged for daily convenience goods (e.g. food, public transport, etc.)

Dividends distributed by a German company to a German-resident corporation, and capital gains from the sale of domestic or foreign shares in corporations, are taxed at the level of the shareholdler only at 5% of the dividends or capital gains since this amount is generally treated as a non-deductible business expense.

In the Heritage Foundation's 2013 Index of Economic Freedom, Germany ranks as the world's 19th-freest economy, classified as only 'mostly free' in terms of investment freedom and capital flows.

Did you know about Germany?


1.	The fifth largest economy in the world in PPP terms and Europe's largest exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force.

2.	The population of Germany is approximately 81,859,000 (November 30, 2011), more than 16 million people in Germany are non-German descent (first and second generation, including mixed heritage and ethnic German repatriates and their descendants).

3.	After suffering from one of the highest unemployment rates in Europe (12% in 2006), Germany now has one of the lowest (5.4% in 2012).

4.	German people are the second biggest consumers of beer in the world, with an average of 107 litres per person per year in 2010.

5.	While it is called Oktoberfest, it actually starts in Steptember.

6.	Albert Einstein, the most recognized scientist in the world, was German and born in Ulm.

7.	65% of the Autobahn (highway) has no speed limit.

8.	Adidas was founded by the Bavarian, Adolf “Adi”Dassler. His other brother, Rudolf Dassler founded Puma.

9.	Germany has over 400 registered zoos, the most in the world. Berlin's Zoologischer Garten is the largest zoo in the world.

10.	Classical music has been widely dominated by German-speaking composers. Famous German composers include Beethoven, Schumann, Bach, Wagner, Strauss, and Handel.

Contact Us

For further information on Germany company formation, contact email@healyconsultants.com or telephone us at (+65) 6735 0120.

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