An Insight Into Forming A Company In Germany

Germany is a lucrative economy of Europe with a number of multinationals operating from there. The high quality of workforce and the presence of advanced infrastructure makes Germany, the desired country for forming a business.

Formation of a company in Germany involves a number of formalities which are quite straightforward in approach. The regulations and procedures, which are required to be followed for setting up the company, are not that different as present in the other countries. Usually a time of 2-5 days is taken for forming a company in Germany.

To make you aware about each and every aspect of forming a company in Germany, let’s dig deeper into the subject. Read through:
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What Are The Reasons That Make Germany A Preferred Destination For Entrepreneurs?

Let’s decode the reasons which have made company formation Germany so popular:

  • The country charges 0% VAT for conducting business between European Union member countries.
  • The economy of Germany stands at the first slot amongst other economies of Europe. Also, the economy of Germany is 4th largest in the world.
  • The benefits of doing business in Germany come with of the fact that the country stands at the 3rd slot amongst the largest exporters in the world.
  • The High-tech infrastructure is one of the crucial aspect which has led to settling of a number of multinational companies in this country.
  • The qualified personnel are easily available here who have the knowledge and experience to take a start-up to the top-notch level.
  • Even for those who are not the native Europeans, Germany offers a lot in terms of business opportunities. The people belonging to Non-European Union can start their business and obtain the local residency through business immigration.
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What Are The Types Of Companies Which Can Be Formed In Germany?

Usually, 3 types of companies can be formed in Germany, namely, Limited companies, Joint companies and partnership concerns.

German UG

This is known as mini-GmbH company which can be established with a minimum capital requirement of €1. This entity is most desirable for the companies who are setting up their new businesses. This type of company can be formed in a week’s time.

German GmbH

This type is the private limited liability company and is the most common of the business types in Germany. Forming a GmbH in Germany requires a minimum share capital of € 25,000 which can be pumped into the business in the form of either assets or cash. The shares of the GmbH companies are not permitted to be traded publicly and thus cannot be listed on the stock exchange.
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German AG

This entity is basically a joint stock company and this business model is usually adopted by large businesses and public companies. The minimum capital requirement for the formation of a German AG company is € 50,000. The liability of the owners is limited to the contribution made to the capital of the company. As per norms, the accounts of this kind of entity require to be audited by the registered auditor.

German-KG

KG is formed on the collaboration of 2 or more partners, irrespective of them being silent or active. In such a case, the liability of the silent partner remains to the extent of the capital contribution, while that of the active partner is full.
Location: Germany

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