How to Set Up a Company in Germany: GmbH, UG or Branch, Costs and Steps for Foreigners

Foreign founders need neither German nationality nor German residence. This guide follows each step from the foreign investor's side, with official fees, 2026 tax rates and director residence rules. If you are already weighing advisers, the Corporate INTL directory lists corporate and M&A lawyers in Germany alongside our wider directory of advisers in Germany.

How to set up a company in Germany: the short answer

You set up a company in Germany by agreeing articles of association, having them notarised, paying in the share capital, registering in the Handelsregister and then completing the post-registration filings with the trade office, the tax office and the transparency register.

The stages, who handles them and the deadlines the statutes set:

Stage	Who or where	Statutory rule or deadline
Articles of association signed	German notary, in person or by video	Notarial form required (s2 GmbHG)
Capital paid in	Company bank account	GmbH: a quarter of each share and €12,500 in total before filing; UG: 100%
Register application	Notary files electronically with the local court	Only after the capital has been paid (s7 and s5a GmbHG)
Entry in the Handelsregister	Register court (Amtsgericht) at the registered seat	Company exists as a legal entity from entry
Trade registration (Gewerbeanmeldung)	Municipal trade office	At the same time as business starts (s14 GewO)
Tax registration questionnaire	Finanzamt, via ELSTER	Within one month of opening (s138 AO)
Beneficial owners	Transparency register	Without delay (s20 GwG)

Can a foreigner set up a company in Germany?

Yes. Germany Trade and Invest, the federal investment agency, states in its company set-up guide that the nationality and residence of the shareholders and managing directors of a GmbH are irrelevant. A single shareholder is enough, and that shareholder can be a private individual or a foreign company.

What the company does need is a German anchor. Under s4a of the Limited Liability Companies Act (GmbHG) the registered seat must be a place in Germany named in the articles, and s8(4) requires the register application to give a domestic business address (inländische Geschäftsanschrift), where documents can be served. GTAI adds that the company needs a local representative for trade office purposes.

Every managing director must be a natural person with full legal capacity, so a parent company cannot itself be appointed director, and s6(2) GmbHG disqualifies anyone convicted of certain offences, including insolvency offences, fraud and false statements in company filings, for five years from the final judgment, and convictions abroad for comparable offences count too.

GmbH vs UG vs branch: choosing the vehicle

Most foreign companies choose a GmbH subsidiary because it ring-fences liability in Germany, while a branch is cheaper to open but leaves the foreign parent liable for everything the branch does. GTAI describes the GmbH as the most widely used legal form for corporations in Germany. The UG (Unternehmergesellschaft, haftungsbeschränkt) is the same legal form with lower capital and some extra restrictions.

Feature	GmbH	UG (haftungsbeschränkt)	Branch (Zweigniederlassung)
Separate legal entity	Yes	Yes	No, part of the foreign company
Liability	Limited to company assets	Limited to company assets	Foreign head office liable
Minimum capital	€25,000	Below €25,000, from €1	None in Germany
Paid in before filing	Quarter of each share, at least €12,500 in total	100%, cash only	Not applicable
Contributions in kind	Allowed, with a valuation report	Not allowed	Not applicable
Profit retention	No statutory reserve	A quarter of annual surplus to a reserve	Not applicable
Formation document	Notarised articles or model protocol	Notarised articles or model protocol	Notary files register application
Register fee (first entry)	€225 cash, €360 with contribution in kind	€225	€180
Typical use	Subsidiary, joint venture, operating company	Start-up or holding with little capital	Sales office or extension of an existing business

The UG trade-offs

Section 5a GmbHG lets a company start with less than €25,000, but it must carry "UG (haftungsbeschränkt)" in its name, pay its capital in full before filing, accept no contributions in kind and put a quarter of each year's surplus (after any loss carried forward) into a statutory reserve. Because each share must be a whole euro amount under s5(2), the practical floor is €1. Once the capital is raised to €25,000 those restrictions fall away and the company may keep its UG name.

The branch option

A branch of a foreign GmbH or AG is registered at the court where the branch sits under s13d and s13e of the Commercial Code (HGB). The notary's filing must prove the company exists and give a German address, the branch's purpose, the foreign register details, the permanent representatives and, for a non-EU company, its governing law. Under s13e(3) HGB the GmbHG director disqualification rules also apply to the legal representatives of a non-EU company's branch. GTAI distinguishes the autonomous branch, which needs a register entry, from the dependent branch, a contact and support office that only registers with the trade office.

Before the notary: name, seat, address and documents

Before the notarial appointment you need a company name, a registered seat in Germany, a business purpose, the capital and how it is split into shares, and the name and details of at least one managing director. Section 3 GmbHG makes the name and seat, the purpose, the amount of share capital and the number and nominal value of each shareholder's shares mandatory content of the articles.

Practical points worth settling early:

• Name. Under s4 GmbHG the name must include "Gesellschaft mit beschränkter Haftung" or a generally understood abbreviation such as "GmbH"; a UG uses the mandatory UG wording. Check it against existing entries on the register before you settle on it, and consider whether it also needs protection as a trade mark; our guide on how to register a trademark internationally covers EU and Madrid filings.
• Address. The domestic business address goes on the register. A serviced office can work, but it must be somewhere documents can actually be delivered.
• Corporate shareholder documents. Where the shareholder is a foreign company, GTAI says the notary will normally ask for an extract from the foreign commercial register and the parent's articles, notarised, legalised or apostilled, and accompanied by a certified German translation.
• Powers of attorney. A shareholder can be represented at the deed only under a notarised or notarially certified power of attorney (s2(2) GmbHG).

The notarial deed, the Musterprotokoll and online formation

The articles of association of a German company must be notarised and signed by all shareholders under s2(1) GmbHG.

The Musterprotokoll

A company with no more than three shareholders and one managing director can use the statutory model protocol, the Musterprotokoll, under s2(1a). It combines the articles, the director appointment and the shareholder list in one short form, but no clause may depart from the statute. GTAI notes that the model is for cash formations and attracts a reduced notary fee: the €30,000 minimum value that s107 of the Court and Notary Fees Act (GNotKG) sets for notarising articles does not apply to a Musterprotokoll formation. The trade-off is flexibility: no transfer restrictions, deadlock clauses or second director, which joint ventures usually need.

Online formation by video

Since the 2021 Act implementing the EU Digitalisation Directive (DiRUG) took effect in August 2022, and later extensions, s2(3) GmbHG allows the articles to be notarised by video under the Notarisation Act. GTAI explains that the session runs on the Federal Chamber of Notaries' video system with two-step identification using an electronic ID: a German ID card or electronic residence permit with eID function, or an eIDAS-notified scheme from another EU or EEA state at a high assurance level. Signatures are given by qualified electronic signature. Online formation is available for cash and in-kind formations, except where the asset contributed (such as German real estate or GmbH shares) itself requires notarial transfer.

The statutory video model protocols in Annex 2 to the GmbHG provide that the company bears formation costs up to €600, or up to its share capital if lower.

The limitation for many foreign founders is identification: without a qualifying eID, video formation is not available, and the founder either travels to Germany for an in-person appointment or appoints a representative under a notarised or notarially certified power of attorney, usually apostilled and translated.

Share capital, the bank account and the Handelsregister entry

Once the deed is signed, the managing director opens a business bank account in the name of the company in formation and the shareholders pay in the capital. For a GmbH, s7(2) GmbHG requires at least a quarter of each cash share to be paid in before filing, and the total paid in (plus any in-kind contributions) must reach half of the €25,000 minimum, which is €12,500. A UG must be paid up in full. Contributions in kind must be fully transferred before filing and backed by a formation report on their value (s5(4) and s7(3)).

Expect the bank to run full know-your-customer checks on foreign shareholders and their ultimate owners, so have passports, the notarised deed and a structure chart ready.

The notary then files the register application electronically with the register court (Amtsgericht) for the registered seat. Under s8 GmbHG the filing includes the articles, any powers of attorney, the director appointment, the shareholder list, the directors' statement that the capital has been paid and is at their free disposal, and their confirmation that no disqualification applies. The court may ask for proof of payment from a bank or payment service provider established in the EU. Directors abroad can receive the required instruction on their duty of disclosure from a foreign notary, a comparable legal professional or a consular official.

When the court is satisfied, it enters the company, and GTAI notes that some register data can then be checked online. Until that moment the GmbH does not exist as such: s11 GmbHG makes anyone who acts in its name before registration personally and jointly liable, so most founders wait for the entry before signing major contracts. Buying an existing company instead raises different issues, as our guide to share sale vs asset sale explains in a UK context.

After registration: trade office, Finanzamt, transparency register and IHK

After registration a German company has four further filings, and the tax one has a hard one-month deadline.

1. Gewerbeanmeldung. Under s14 of the Trade Regulation Act (GewO), anyone who starts a trade, a branch or a dependent branch office must notify the competent authority at the same time. The municipality forwards the content of the notification to the tax office (s138(1) AO).
2. Tax registration questionnaire. Section 138(1b) of the Fiscal Code (AO) requires a new business to give the tax office the facts relevant to its taxation as an official electronic data record, and s138(4) sets a one-month deadline. In practice this is the Fragebogen zur steuerlichen Erfassung, submitted through ELSTER, the tax authorities' online portal; the tax office may accept a paper form only on request to avoid undue hardship. ELSTER's guidance says it goes to the Finanzamt for the place where the company is managed, and the tax office then issues the company's tax number.
3. Transparency register. Under s20 of the Money Laundering Act (GwG), every legal entity must obtain, keep up to date and report its beneficial owners to the transparency register without delay. Foreign companies that buy German real estate are caught too.
4. IHK membership. Under s2 of the IHK Act, businesses assessed for trade tax with an establishment in a chamber's district are members of the local Chamber of Industry and Commerce (IHK) by law. Membership follows automatically from the statute; no application is needed.

How much does it cost to set up a company in Germany?

The fixed official costs of setting up a company in Germany are modest: the register court fee for a new GmbH or UG paid in cash is €225 under the fee schedule to the Commercial Register Fees Ordinance, and the notary's fees depend on the value of the transaction under the GNotKG.

Item	Official amount or rule	Source
Register entry, GmbH or UG, cash	€225	HRegGebV, fee 2100
Register entry with at least one contribution in kind	€360	HRegGebV, fee 2101
Register entry of a branch	€180	HRegGebV, fee 2200
Notary: articles of association	Value based, minimum value €30,000, maximum €10 million	s107(1) GNotKG
Notary: Musterprotokoll formation	No minimum value, so lower fees	s107(1) and s105(6) GNotKG
Formation costs borne by company (video model protocol)	Up to €600, or the share capital if lower	GmbHG, Annex 2
Share capital	GmbH €25,000 (€12,500 paid in); UG from €1	s5, s5a and s7 GmbHG
Trade office notification	Set locally	Municipality

The register fees are set in the fee schedule to the HRegGebV. On top come notary fees, apostille and translation costs, and adviser fees. Remember that the capital is not a cost: GTAI points out that it is not a deposit and, to a certain extent, can be used for the company's business.

Corporate tax and trade tax

A German company pays corporation tax at 15% plus a 5.5% solidarity surcharge on that tax, which gives 15.825%, and municipal trade tax on top. Section 23 of the Corporation Tax Act (KStG) now sets a falling schedule: 15% for assessment periods up to 2027, then 14% for 2028, 13% for 2029, 12% for 2030, 11% for 2031 and 10% from 2032.

Trade tax is calculated by applying a base rate (Steuermesszahl) of 3.5% to trade income and then the municipality's multiplier (Hebesatz). Under s16(4) of the Trade Tax Act (GewStG) the multiplier is 280% where the municipality has not set a higher one, and it must be the same for every business in the municipality. The arithmetic matters when choosing a location:

• At the 280% statutory default, trade tax is 9.8% of trade income, for a combined rate of about 25.6% in 2026.
• At a 400% multiplier, trade tax is 14%, for a combined rate of about 29.8%.
• From 2032, with corporation tax at 10% and the surcharge unchanged, the same 400% location would come to about 24.6%.

A branch of a foreign company is taxed in Germany on the profits attributable to it if it is a permanent establishment, and GTAI notes that an autonomous branch generally is one. Large groups should also factor in the global minimum tax; our explainer on domestic minimum top-up taxes sets out how the 15% Pillar Two floor works. For structuring advice, the directory lists tax advisers and lawyers across jurisdictions.

Managing directors, residence and visas

A managing director does not need to live in Germany for the company to be registered, but a non-EU director who wants to live and work in Germany needs a residence title that allows it.

For founders who will run their own business from Germany, s21 of the Residence Act (AufenthG) allows a residence permit for self-employment where there is an economic interest or regional need, the activity is expected to have positive effects on the economy, and the financing is secured by equity or a loan commitment. The authority weighs the business plan, the founder's experience, the capital and the effect on jobs and innovation. Graduates of German universities and holders of certain research permits or an EU Blue Card are treated more favourably. The permit is limited to three years, after which a settlement permit is possible if the business has succeeded and the founder's living costs are covered.

Other residence routes exist for employees, and hiring staff brings its own rules on contracts, notice and works councils; our guide to choosing an employment lawyer in Germany covers what to expect. For residence questions the directory lists immigration and citizenship advisers.

When to instruct a local lawyer in Germany

A simple single-shareholder GmbH can be formed with a notary alone, but foreign founders usually benefit from a German corporate lawyer once the structure goes beyond the model protocol. The notary is impartial and does not negotiate for either side. Consider instructing a lawyer:

• When there is more than one investor, to draft articles and a shareholders' agreement covering transfers, vesting, deadlock and exits.
• When choosing between a GmbH, a UG and a branch, since liability, tax and accounting consequences differ for the parent.
• When contributing assets in kind, such as IP or an existing business, which needs a formation report and valuation evidence.
• When directors or shareholders are outside the EU, to plan powers of attorney, apostilles, translations and residence permits.

Before the first call, prepare the proposed name, seat and purpose, a structure chart up to the individual owners, the parent's register extract and articles, and director passport copies. Ask for an estimate that separates notary fees, register fees and professional fees.

Corporate INTL runs a directory of lawyers and advisers in more than 150 jurisdictions. You can browse corporate lawyers in Germany, the full Germany adviser directory or corporate and M&A specialists worldwide, or use the form below and we will put you in touch with a member. If your German company will hold patents, our guide to choosing a patent attorney in Germany explains how that profession works.

Related guides on setting up abroad:

Guide	What it covers
How to set up a company in Singapore	Ten incorporation steps for foreigners, fees and 2026 rules
How to open a business in Dubai	Nine steps from trade licence to corporate tax registration

Frequently asked questions

Can a foreigner set up a company in Germany?

Yes. German law does not restrict the nationality or residence of GmbH shareholders or managing directors. The company needs a registered seat and business address in Germany, a German notary for the deed, and directors who are natural persons not disqualified under s6 GmbHG.

How much does it cost to set up a company in Germany?

The register court charges €225 to enter a GmbH or UG formed with cash, €360 with a contribution in kind, and €180 for a branch. Notary fees are value based under the GNotKG and lower for a Musterprotokoll formation. A GmbH also needs €25,000 capital, half paid in.

What is the minimum share capital for a GmbH?

€25,000. At least a quarter of each cash share, and €12,500 in total, must be paid in before the register application. A UG can be formed with less, from €1, but must be paid up in full and cannot accept contributions in kind.

Is a GmbH the same as an LLC?

Broadly. Both are separate legal entities whose members are not personally liable for company debts. A GmbH differs in needing a notary at formation and for most share transfers, a minimum capital of €25,000 and registration in the Handelsregister.

Can I set up a German GmbH online?

Yes, if every participant can identify with a qualifying electronic ID, such as a German ID card or electronic residence permit with eID function or an eIDAS-notified EU scheme. The session runs on the Federal Chamber of Notaries' video system.

Does the managing director have to live in Germany?

No. Residence is irrelevant for registration. A non-EU director who wants to live and work in Germany still needs a suitable residence title, such as the self-employment permit under s21 of the Residence Act for founders running their own business.

How much tax does a company pay in Germany?

Corporation tax of 15% plus the 5.5% solidarity surcharge, 15.825% in total, and trade tax of 3.5% multiplied by the local Hebesatz, at least 280%. The corporation tax rate falls by one point a year from 2028 to 10% in 2032.

When must a new company register with the Finanzamt?

Within one month of opening the business, under s138(4) of the Fiscal Code. The tax registration questionnaire must be sent electronically through ELSTER to the tax office where the company is managed.

Do I need to register a German company in the transparency register?

Yes. Under s20 of the Money Laundering Act every German legal entity must report its beneficial owners to the transparency register without delay and keep the entry up to date.

Sources

1. Gesetz betreffend die Gesellschaften mit beschränkter Haftung (GmbHG), gesetze-im-internet.de
2. Handelsgesetzbuch (HGB), section 13e, gesetze-im-internet.de
3. Germany Trade and Invest, Company Set Up in Germany
4. Handelsregistergebührenverordnung (HRegGebV), fee schedule, gesetze-im-internet.de
5. Gerichts- und Notarkostengesetz (GNotKG), section 107, gesetze-im-internet.de
6. Körperschaftsteuergesetz (KStG), section 23, gesetze-im-internet.de
7. Gewerbesteuergesetz (GewStG), section 16, gesetze-im-internet.de
8. Abgabenordnung (AO), section 138, gesetze-im-internet.de
9. Geldwäschegesetz (GwG), section 20, gesetze-im-internet.de
10. Aufenthaltsgesetz (AufenthG), section 21, gesetze-im-internet.de

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. Every capital rule, fee, deadline and tax rate has been checked against the German statutes on gesetze-im-internet.de and Germany Trade and Invest's investment guide. It is general information, not legal or tax advice; your position depends on your structure, your business and your directors, so take advice from a qualified German lawyer, notary or tax adviser before forming a company. Last reviewed 12 November 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.