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Germany Company Formation

The GmbH is a limited liability company in Germany. This business entity can be incorporated by an individual or by another company. It is the most chosen type of company used in Germany because of its flexibility option.

GmbH company formation in Germany

The German GmbH is a legal entity that advantages from rights and obligations separate from the shareholders’ rights and duties. 

The general traits are summarized below-

  • Capital: this type of company has a base offer capital of a minimum of 25,000 Euros;
  • Shareholders: there are no limitations on the number of shareholders;
  • Directors: As described in the Articles of Association the company and organization is controlled by an administrative board;
  • Management: the GmbH can have one or more managers who do not need to be shareholders.

To establish a GmbH in Germany the following accompanying steps should be set up-

  • Know your shareholders
  • Writing the articles of Incorporation
  • Gathering the share capital
  • Obtaining a notarized certificate
  • For registration, a notarized application must be submitted to the Commercial Register Court
  • The received application will be revised by the Register Court
  • After that, GmbH will be registered with the commercial registry and notified about its incorporation.  

Taxation and accounting requirements-

The restricted obligation organization in Germany is dependent upon the corporate annual expense of 15% to which the limited liability company in Germany is dependent upon the income tax of 15% to which a fortitude extra charge of 5.5% of the corporate tax is added. 30-33% is considered as the effective corporate income tax rate. A GmbH that will be associated with exchanging and outside the European Union should have an Economic Operator’s Registration and Identification (EORI) number.

What is German mini-GmbH?

The mini German GmbH or limited liability entrepreneurial company is a subtype of GmbH.

Advantages of German GmbH

  • The corporate income tax rate: this is 15% and it is the primary assessment relevant to the organization;
  • The value-added tax: it has a 19% standard rate, with another reduced rate of 7% for certain sorts of goods and services.
  • The withholding tax: relevant to profits, interest, and royalties, with fluctuating upsides of 25%, or 0% at times; 
  • Social security contributions: the company will generally cover approximately 50% of the social security contributions; the rates vary.
  • Other taxes: other taxes are also applicable to Germany such as the real property tax, the transfer tax, and the municipal trade tax 

Want to know more about the GmbH Company in Germany? If you are thinking to start a business in Germany, contact ODINT consulting. We have an expert team of International Market Entry Specialists who can give you complete information about the rules and regulations for limited liability companies.


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