Foundation in Germany – Setting up a business in Germany
Special requirements for foreign founders
Formation by a foreign company
Preparation of the formation
Formation process step by step
Digression: Trade licence and tax registration
Digression: Types of taxes in Germany
If the legal form of your business is a sole proprietorship and you are a business- and tradesperson, you have to pay trade tax. As a natural person you are also subject to income tax.
Unless you are a small business owner (Kleinunternehmer) and benefit from tax concessions, you also pay value added tax (VAT). Solidarity tax must be paid at the same time as income tax. Since 2021, however, some entrepreneurs benefit from the partial abolition of the solidarity surcharge depending on their income. If they are members of a church, church tax must also be paid and, if employees are employed, payroll tax is raised.
If the legal form of your business is an OHG, KG or GbR (partnership, German “Personengesellschaft”) as a shareholder you pay tax on the profits at your personal income tax rate. If a commercial business model is pursued, trade taxes must be paid. You are usually also subject to value added tax (VAT). If applicable, solidarity tax must be paid, church tax and payroll taxes for employees.
If the legal form of your business is a corporation as the GmbH, UG, AG (German “Kapitalgesellschaft”) it is subject to Corporation tax, solidarity tax, trade tax and VAT if applicable, also to payroll taxes for employees. In the case of profit distributions you also have to pay capital gains tax (25 %). Due to the enormously high taxation of profit distribution, it may sometimes not be worthwhile for an individual entrepreneur to set up a corporation.
|DESCRIPTION||COSTS (NET AMOUNTS)|
|Formation costs||Advice on legal form, advice on forming a company and advice on financial statements, drawing up of the articles of association and forming documents, organisation of the formation, representation during the entire formation process, company audit by the IHK, managing director contract, opening balance sheet and preparation of the trade and tax registration, VAT ID application and contract documents.||Fixed price: 189,– € (“formation package START-UP”), 489,– € (“Rechtssicher”) or 669,– € (“Rechtssicher PLUS”)|
|Notarisation costs||Notarisation of the articles of association and other forming documents. By providing prior advice on formation and drawing up the articles of association and the formation documents for a fixed price, we may save you the significantly higher costs of a contract drawn up by the lawyer notary on the basis of the RVG (German Law on Lawyer’s Fees), or when invoicing on an hourly basis.||Between 280,- (Standard Record) and 835,- € (individual Statutes) on average|
|Check of company name with IHK||If the responsible IHK / HWK conducts a preliminary statement procedure, we will conduct an examination procedure at your IHK /HWK for your company. This is to show whether there are any objections to your company name. In some cities or municipalities (e.g. in Berlin) the preliminary statement procedure is subject to a fee.||In some cities or municipalities about 45,- €|
|Entry into the commercial register||Often 170,- €|
|Commercial registration||Depending on the city or municipality, €10.00 to €60.00|
|Tax registration||Free of charge|
|IHK contribution||From 115,- €|
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