How Do You Incorporate a Company in Germany as a Foreign Business?

The GmbH is the standard vehicle for foreign subsidiaries. A UG is cheaper to start but can look thinly capitalized to suppliers and landlords. A branch avoids a new legal entity but still requires notarized registration and exposes the parent directly.

1. Prepare the articles (Gesellschaftsvertrag) — or use the statutory sample protocol (Musterprotokoll) for simple formations with up to three shareholders and one managing director.
2. Notarize the formation before a German notary. Founders can attend in person, use a German consular officer abroad where available, sign via a power of attorney notarized and apostilled abroad, or use online video notarization if they hold an eligible eID (such as a German or EU/EEA electronic ID card or a German electronic residence permit).
3. Open a bank account for the company in formation and pay in the required capital.
4. Managing directors confirm the capital contribution and their eligibility in the registration filing, which the notary submits electronically.
5. Entry in the Handelsregister at the Amtsgericht creates the GmbH. Timing depends on the court and on how complete the documents are.
6. Register beneficial owners in the Transparenzregister, which every GmbH and UG must do.
7. Register the business with the local trade office (Gewerbeamt); this also triggers membership of the local chamber of commerce (IHK).
8. Complete tax registration with the Finanzamt through the ELSTER questionnaire, then apply for a VAT ID if trading cross-border in the EU.

• Individuals: valid passport and residential address; for signing by power of attorney, a power notarized abroad and apostilled (or legalized in non-Apostille countries).
• Corporate shareholders: a current certified extract from the parent's commercial register showing who can represent it, apostilled or legalized, with a certified German translation; the parent's articles where the notary requests them; and a resolution approving the German subsidiary.

German notaries and registry courts are exacting about proof of representation: if the extract does not clearly show who may sign for the parent, an additional certificate may be needed. The notary will also identify beneficial owners under anti-money-laundering rules, so an ownership chart down to the individuals is needed early.

• Tax number and VAT: the Finanzamt issues a tax number after reviewing the tax registration questionnaire, which asks about expected turnover, profits and bank details. The EU VAT identification number (USt-IdNr.) is issued by the Federal Central Tax Office.
• Taxes: corporate income tax plus solidarity surcharge, and municipal trade tax (Gewerbesteuer) at a rate set by each municipality, so the combined burden depends on location. Germany has legislated gradual cuts to the corporate income tax rate starting in 2028.
• Employer registrations: an establishment number from the Federal Employment Agency and social insurance registration before hiring.

Recurring obligations include annual financial statements under the German Commercial Code, publication via the company register, corporate income tax, trade tax and VAT returns (with advance VAT returns during the year), and keeping the Handelsregister and Transparenzregister entries current.

Banking comes earlier in Germany than in most countries, because the capital must be paid into a German account before the Handelsregister entry. Banks apply full identity verification to managing directors and beneficial owners, and some require a personal meeting. Foreign-owned companies in formation often face the longest delays here, so it helps to choose a bank that is used to non-resident founders and to have notarized documents, a business plan and the ownership chart ready. Bank approval remains at the bank's discretion.

Germany suits businesses selling into Europe's largest economy, industrial and engineering groups, and companies that need local credibility with German customers and suppliers. The trade-offs are notarial formalities, a capital requirement for the GmbH and multi-layer taxes.

Compared with the Netherlands, a German GmbH requires more capital and usually takes longer, but a German entity carries weight with German customers and public buyers. Groups that mainly need an EU holding or distribution company often choose a Dutch BV and add a German GmbH when German operations grow.