Limited Liability Company (GmBH) registration in Germany

It must not contain sensitive words that imply criminal activity or contradict to the standards of public morality. The words such as Assurance”, “Bank”, “Insurance” are the subject of licensing.

The name of the company may not create any associations with the governmental bodies, agencies and departments.

The company’s name must not be very similar to existing names on the registrar and it must not contain improper or objectionable words. It must be written in Latin letters and contain the abbreviation ” GmBH” which means limited liability.

German LLC is required to have a registered office address in Germany.

One director is the minimum required. There is no requirement for them to be locals and there is no requirement to hold the meetings of directors within the territory Germany.

Corporate persons cannot become directors. The director and shareholder can be the same person. The directors’ details are registered on the public record and can be accessed by the public.

The appointment of a secretary is not mandatory, but optional.

One shareholder is the minimum required. There is no requirement for them to be locals and corporate or natural persons can become shareholders. There is no requirement regarding the place of the shareholders’ meetings however it should be conducted at least once a year.

The director and shareholder can be the same person. The shareholders’ details are registered on the public record and can be accessed by the public.

The beneficial owners’ details are registered on the public record.

The owners of the German (GmBH) are free to determine any amount, but it should not be less than €25.500 EUR as the authorized capital at incorporation. The authorized capital is the maximum amount of capital that the company is authorised by its constitutional documents. In the case of Germany, it should be denominated in € EURO.

Limited Liability Companies (GmBH) does not have shares. Instead, members make the contributions and their part of the ownership in the company is proportional to such contributions.

There is a requirement to have at least half of the minimum authorized capital of the company fully paid up. This means that the owners of an LLC are required to pay their contributions during the incorporation. In the case of a German LLC (GmBH) the minimum paid up capital should be €12.500 EUR

The incorporation period in Germany may take up to 3 weeks.

Ready-made but unused LLCs are not available in Germany.

German legislation does not contain any requirements regarding the economic substance of the Limited Liability Companies (GmBH). This means that the company is not required to have premises and an adequate number of employees, the number of expenditures to support its activity in Germany.  ALimited Liability Company must have an address within the territory of Germany that will be registered as a company’s address.

A Limited Liability Company incorporated in Germany is obliged to prepare and file accounting records. The auditing of the accounting records is conducted only in case of the certain size of the company with a certain turnover in particular: large and medium size LLCs (GmBHs). The annual tax revenue is also matter of filing.

The corporate tax rate in Germany is 15%. Also, there is municipal trade tax that can be from 7% to 17% and there is a 5.5% solidarity surcharge that is based on the amount that should be paid as a corporate tax. Thus, the effective tax rate that is applicable in Germany is typically 30-33 %. However, Germany has a huge number of Double tax avoidance treaties with a wide range of countries from all over the world. Also, there is a quite liberal treatment of dividends, royalties and interests. Moreover, Germany is an EU Member State, which means that some benefits that are established on EU Level will be applicable. The VAT rate in Germany is 19% which can be reduced to 7% or even to 0% in certain cases.  The threshold for the registration of the company as a VAT payer is € 50.000EUR of turnover in a current year and €17.500EUR in a previous year.