The GmbH (Gesellschaft mit beschränkter Haftung) is the most common legal form for companies in Germany. It is especially popular among foreign investors due to its limited liability and flexibility. However, the incorporation process in Germany is highly formalized and involves notarial, tax, and regulatory steps.
Below we outline the 10 essential steps to successfully establish a GmbH in Germany.
Step 1: Define the Business Purpose and Structure
Before starting the formal process, it is crucial to:
- Define the business purpose (Unternehmensgegenstand) of the GmbH.
- Determine the shareholders (individuals or companies) and their respective shares.
- Appoint at least one managing director (Geschäftsführer).
Step 2: Draft the Articles of Association (Gesellschaftsvertrag)
The Articles of Association must include:
- Company name and registered office
- Business purpose
- Share capital and shareholder structure
- Rules regarding representation and management
- Duration of the company (if limited)
Step 3: Notarization of Incorporation
The incorporation deed, including the Articles of Association, must be notarized by a German notary. All shareholders (or authorized representatives) must appear personally or be properly represented.
Step 4: Open a Bank Account for the GmbH
After notarization:
- A GmbH bank account must be opened.
- The initial share capital (minimum €25,000) must be deposited, with at least €12,500 paid in prior to registration.
Step 5: Register with the Commercial Register (Handelsregister)
The managing director applies for registration of the GmbH at the local Commercial Register via the notary.
- The GmbH gains legal capacity only upon registration.
- The register entry will be publicly available.
Step 6: Obtain the Tax Number and VAT ID
Once registered:
- The GmbH must apply for a tax number with the responsible German tax office.
- If conducting VAT-liable activities, the GmbH must also apply for a German VAT identification number (USt-IdNr.).
Step 7: Register with the Trade Office (Gewerbeamt)
The GmbH must register its business with the local trade office (Gewerbeamt).
- A trade license (Gewerbeanmeldung) will be issued.
- This step is mandatory for most commercial activities.
Step 8: Social Security and Payroll Registrations
If employees are to be hired:
- The GmbH must register with the German social security system (health insurance, pension, unemployment, long-term care insurance).
- The company must also register for payroll tax with the tax office.
Step 9: Set Up Accounting and Reporting
German companies must:
- Keep accounting records in accordance with German Commercial Code (HGB).
- File annual financial statements with the Federal Gazette (Bundesanzeiger).
- Fulfill tax reporting obligations (corporate income tax, trade tax, VAT, etc.).
Step 10: Ongoing Compliance and Corporate Governance
Once established, the GmbH is subject to:
- Annual shareholders’ meetings
- Preparation of annual accounts and tax returns
- Compliance with anti-money laundering and transparency register requirements
- Ongoing communication with tax and regulatory authorities
WW+KN — Comprehensive Support for GmbH Formation in Germany
At WW+KN, a Baker Tilly Company, we support foreign investors throughout the entire GmbH formation process and beyond. Our services include:
- Structuring advice and drafting of Articles of Association
- Coordination of the notarial process
- Accounting, tax registration, payroll setup and compliance services
- Ongoing support for the operation of the GmbH
- Cooperation with Baker Tilly’s legal experts for corporate law matters
Important Note
This article provides general information only and does not constitute legal advice. For an individual assessment of your situation, please consult a qualified advisor.
If you have any questions regarding the formation of a GmbH in Germany, please feel free to contact us.
We are WW+KN, a Baker Tilly Company.
You can reach us at info@wwkn.de.
