UG formation in Germany – setting up a German Limited
Preparation of the formation of a UG
Forming an UG in 9 steps – Process step by step
Course of UG formation
Advantages and disadvantages of forming an UG
Duration of UG formation
Taxes and share capital of the UG
The tax on the UG’s income is called corporation tax. This is a tax paid by all legal persons. At present, the tax authorities levy corporation tax in the amount of 15%. The comparatively low corporation tax rate provides an advantage over income tax. Profits may remain in the company at the end of the financial year without being subject to income tax. This would be different for a sole trader or GbR. This creates a tax advantage for retained earnings.
In addition to corporation tax, all corporations are subject to the solidarity surcharge, which is 5.5% of corporation tax. This is equivalent to a surcharge of 0.825 percentage points, so that the total corporation tax plus the solidarity surcharge amounts to 15.825%.
Since the UG usually runs a business, trade tax is also added. This depends on the local collection rate and is around 15%, though it can be more in large cities. The trade office learns about your UG or GmbH through its business registration.
Value added tax
If the UG is not covered by the small business regulation, it must collect and pay VAT. This is usually 19% but for some services it is only 7%.
If you want to employ salaried staff in your UG, you must also pay wage tax. We would be happy to advise you on wage tax and other questions on topics that arise after formation in our final consultation, as offered in the “Rechtssicher PLUS” package.
UG formation with foreign elements
|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”), 599,– € (“Rechtssicher”) or 799,– € (“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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