Q&A about setting up foreign-owned Limited Liability Company in Germany

WFOE Registration, Work Permit, Special Industry Permit application according to German Regulations, we need to do KYC (Know your client) before engagement with your assignment.

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Drafted by Dale Chen 20230627 v1
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Germany Foreign-funded Limited Liability Company
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Germany – Organizational Structure of Foreign-funded Companies
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What are the types of Foreign-funded Companies in Germany?

1. Branch Office: A branch office is an extension of a foreign company and conducts business activities in Germany. It operates under the same legal entity as the parent company and is subject to German laws and regulations.
2. Joint Venture: A joint venture is a partnership between a foreign company and a German company, where both entities contribute capital, resources, and expertise. The joint venture operates as a separate entity, sharing profits and risks between the partners.
3. Representative Office: A representative office is a non-profit entity established by a foreign company in Germany to promote its business interests. It serves as a liaison between the parent company and potential clients or partners but cannot engage in commercial activities.
4. Limited Liability Company (GmbH) or UG (mini-Gmbh): A foreign company can establish a limited liability company in Germany, known as GmbH. The GmbH has its own legal personality and is subject to German company law. It requires a minimum share capital and provides liability protection to its shareholders.
5. Stock Corporation (AG): A foreign company may establish a stock corporation in Germany, known as AG. It is a public company with share capital divided into shares. The AG is subject to German stock corporation law and has a more complex corporate structure.

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What are the procedures for setting up the Foreign-funded Limited Liability Company in Germany?

1. Choose a Company Name: Select a unique company name that complies with German naming regulations and does not infringe on any existing trademarks or company names.
2. Share Capital: Determine the amount of share capital required for your GmbH. Currently, the minimum share capital required is €25,000. You must deposit this capital into a bank account.
3. Draft the Articles of Association: Prepare the Articles of Association (Gesellschaftsvertrag) for your GmbH. This document outlines the company’s purpose, structure, shareholders’ rights and obligations, and other important provisions. It should comply with German company law.
4. Notary Appointment: Engage a notary public (Notar) in Germany to notarize the Articles of Association. The notary will confirm the authenticity of the signatures and verify compliance with legal requirements.
5. Bank Account Opening: Open a bank account in Germany and deposit the share capital into the account. The bank will provide you with confirmation (Kapitalnachweis) certifying the deposit.
6. Registration at the Trade Office: Register your GmbH at the local Trade Office (Gewerbeamt) responsible for your business location. Submit the notarized Articles of Association, bank confirmation, and other required documents.
7. Tax Registration: Register your GmbH with the tax authorities (Finanzamt) for tax purposes. You will receive a tax number and be assigned to the appropriate tax office.
8. Commercial Register Entry: Apply for registration in the Commercial Register (Handelsregister) at the local court. Provide the necessary documents, including the notarized Articles of Association, bank confirmation, and proof of registration at the Trade Office.
9. Publication in the Official Gazette: Publish the registration details of your GmbH in the Official Gazette (Bundesanzeiger). This step provides public notice of your company’s existence.
10. Obtain Business Permits and Licenses: Depending on your business activities, you may need specific permits or licenses. Research and comply with any industry-specific requirements.
    

    Submit

    https://www.firma.de/en/company-formation/how-to-register-a-company-in-germany-a-company-formation-checklist/

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What are the requirements for holding a position of director, manager/ supervisor, company secretary, etc. in Germany’s foreign-funded companies?

Director/Managing Director:

1. Legal Capacity: Individuals who hold positions as directors or managing directors in a foreign-funded company must have legal capacity, meaning they must be at least 18 years old and possess full legal rights.
2. Residency: There is no specific residency requirement for directors or managing directors in Germany. Both German and foreign nationals can hold these positions.
3. Management Skills and Expertise: Directors or managing directors should have the necessary management skills, knowledge, and experience relevant to the company’s business activities.
4. Compliance with Legal Obligations: Directors or managing directors have a fiduciary duty to act in the best interests of the company and comply with applicable laws and regulations.
   Manager/Supervisor:
5. Qualifications and Experience: Managers or supervisors in foreign-funded companies should possess relevant qualifications, experience, and expertise in their respective fields.
6. Employment Contract: Managers or supervisors are typically appointed through an employment contract that outlines their roles, responsibilities, and employment terms.
   Company Secretary:
   In Germany, the role of a company secretary is not mandatory or commonly established in the same way as in some other jurisdictions. However, certain administrative duties traditionally performed by a company secretary may be assigned to an employee or outsourced to professionals.
   

   Submit

   https://uk.practicallaw.thomsonreuters.com/8-502-1574?transitionType=Default&contextData=(sc.Default)&firstPage=true

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How long the share capital of a Germany Foreign-funded Limited Liability Company must be hold before it can be sold?

In Germany, there is no specific duration that the share capital of a foreign-funded Limited Liability Company (GmbH) must be held before it can be sold.
Any restrictions or requirements specified in the Articles of Association or any shareholders’ agreements may affect the sale or transfer of shares.

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Is a Resident Shareholders required for incorporation of Foreign-funded Limited Liability Company in Germany?

The GmbH Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung) does not impose any residency requirements on shareholders.
Both German residents and non-residents can be shareholders of a GmbH.

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Is a Resident Director required for incorporation of Foreign-funded Limited Liability Company in Germany?

There is no legal requirement stating that the director or managing director of a GmbH must be a resident of Germany.

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Is there a company secretary required for incorporation of Foreign-funded Limited Liability Company in Germany?

In Germany, there is no legal requirement to appoint a company secretary for the incorporation of a foreign-funded Limited Liability Company (GmbH).

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What are the qualifications of a legal representative in Germany Foreign-funded Limited Liability?
Can a foreigner act as a legal representative?
If yes, he/she need a place of residence in Germany?

1. Legal Capacity: The legal representative must have legal capacity, meaning they must be at least 18 years old and possess full legal rights.
2. Authorization: The legal representative can be an individual or a legal entity (such as another company) appointed by the GmbH. The appointment is typically made through the company’s Articles of Association or a power of attorney.
3. Resident Agent: If the legal representative is an individual, they are not required to be a resident of Germany. A foreigner can act as a legal representative for a GmbH without needing a place of residence in Germany.
4. Power of Attorney: If the legal representative is a legal entity (e.g., another company), they may appoint an individual as their representative who can act on their behalf in Germany. The appointed individual may be a resident or non-resident of Germany.
   Legal representative can be a foreigner without a residence in Germany, but the GmbH must have a registered office or a registered agent in Germany.
   It can be the address of a physical location or the address of a legal representative, such as a law firm or a notary public.

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Is it possible to establish a Germany foreign-owned company through an offshore company as holding company?

Yes, it is possible to establish a Germany foreign-owned company using an offshore company as a holding company.

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What are the special features of Germany wholly foreign-owned limited liability corporation (LLC)?

1. Limited Liability: Like any GmbH, a wholly foreign-owned GmbH offers limited liability to its shareholders. This means that the shareholders’ personal assets are generally protected from the company’s liabilities, limiting their risk to the amount of their investment.
2. Flexibility in Ownership Structure: A GmbH allows for flexibility in the ownership structure, enabling a single foreign investor or multiple foreign investors to hold the entire share capital. There are no specific restrictions on foreign ownership, and both individuals and legal entities can be shareholders.
3. Minimum Share Capital: The minimum share capital required to establish a GmbH is €25,000. This capital must be contributed by the shareholders and is intended to provide a level of financial security for the company.
4. Management Structure: The management structure of a GmbH typically includes one or more managing directors (Geschäftsführer) who are responsible for the day-to-day operations of the company. The managing directors can be either individuals or legal entities.
5. Flexibility in Corporate Governance: A GmbH offers flexibility in corporate governance, allowing the shareholders to define the rules and regulations through the company’s Articles of Association (Gesellschaftsvertrag). This allows for customization of the internal governance structure based on the needs and preferences of the shareholders.
6. Taxation: Germany has a well-established tax system, and the tax treatment of a wholly foreign-owned GmbH is generally the same as that of domestically owned companies. The company is subject to corporate income tax, value-added tax (VAT), and other applicable taxes based on its business activities.

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Germany Foreign investment: permitted industries, restricted industries (licensed industries) and prohibited industries.
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Are Germany foreign-investment industries and products be listed in a positive or negative list?
Or are there different approaches for foreign investment from different countries?

Germany does not have a single comprehensive positive or negative list that specifies which industries or products are open or restricted for foreign investment.
Instead, Germany has a system that reviews and assesses foreign investments on a case-by-case basis.
The relevant legislation is primarily governed by the Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG) and the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV).
The German government has the authority to review and potentially restrict or prohibit foreign investments if they are deemed to pose a threat to public security or order.
This process is known as the foreign investment control mechanism, or “Investmentprüfung” in German.
For investors from EU member states, investments are generally treated more favorably due to the principles of free movement of capital within the European Union.
For investments from non-EU countries, there might be stricter regulations and additional scrutiny.

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In the positive list, what are the industries that foreign investment is allowed to invest in, which are the industries that are restricted for foreign investment (licensed industries), and the industries that are prohibited to invest in by foreign investment?
Will the positive list be different for different countries?

Germany does have specific regulations that apply to certain industries and sectors, where foreign investment might be restricted or subject to licensing requirements.
These industries are typically referred to as “sensitive sectors” or “regulated sectors.”
Examples of such sectors include:

1. Defense and Security: Foreign investment in defense-related industries and companies involved in national security can be subject to strict controls and scrutiny.
2. Critical Infrastructure: Sectors related to critical infrastructure, such as energy, telecommunications, transportation, and water supply, may have specific regulations to safeguard national interests and ensure the continuity of essential services.
3. Media and Broadcasting: Certain media and broadcasting sectors might have restrictions or regulations to protect cultural values and media plurality.
4. Financial Services: Foreign investment in the financial services sector, including banking and insurance, may be subject to specific regulations and licensing requirements.
5. Healthcare and Pharmaceuticals: The healthcare and pharmaceutical sectors can have specific regulations to ensure public health and safety.
   Germany’s regulations for foreign investment apply uniformly to investors from all countries.

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In the negative list, what are the industries that foreign investment is allowed to invest in, the industries that are restricted to foreign investment (licensed industries), and the industries that are not allowed to invest in foreign investment?
Will the negative list be different for different countries?

Germany does not have a comprehensive negative list specifying industries where foreign investment is strictly prohibited.
Instead, Germany’s approach to foreign investment primarily involves case-by-case reviews based on national security, public order, and other vital interests.

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What are the restriction on foreign investment in Germany? For instance, what is the minimum share capital amount?
What are the rules for foreign shareholding ratio? Other?
Are they different for different countries?

1. Minimum Share Capital: The minimum share capital requirement for establishing a German limited liability company (GmbH) is €25,000. This capital must be contributed by the shareholders and serves as a financial foundation for the company.
2. Foreign Shareholding Ratio: Germany does not impose specific restrictions on the foreign shareholding ratio in companies. Foreign investors can hold 100% ownership or a majority stake in German companies. The laws regarding shareholding are generally the same for all investors, regardless of their country of origin.
3. Sensitive Industries: Certain industries, such as defense, critical infrastructure, and media, may have specific regulations or restrictions on foreign investment. These regulations are aimed at safeguarding national security, public order, and other vital interests.
4. Foreign Investment Review: Germany has a foreign investment review mechanism that allows the government to review and potentially restrict or prohibit foreign investments that may pose risks to national security or public order. This mechanism applies uniformly to investors from all countries.
   While Germany treats foreign investors from different countries equally under its regulations, it’s possible that certain countries may have bilateral investment agreements or treaties with Germany that provide specific provisions or protections for investments between the two countries.
   These agreements could influence the investment conditions and treatment for investors from those particular countries.

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What are the licensed industries in Germany?
What is the difference between the industries that allow foreign investment, the industries that restrict foreign investment (licensed industries), and the industries that do not allow foreign investment?

1. Banking and Financial Services: The banking and financial services sector in Germany is heavily regulated and requires licenses from the relevant authorities, such as the Federal Financial Supervisory Authority (BaFin).
2. Insurance: The insurance industry also requires licenses and regulatory oversight from BaFin to ensure compliance with insurance laws and consumer protection.
3. Telecommunications: The telecommunications sector, including mobile network operators and internet service providers, requires licenses from the Federal Network Agency (BNetzA) to operate in compliance with telecommunications laws and regulations.
4. Energy: The energy sector, including electricity generation, distribution, and supply, requires licenses and compliance with energy regulations to ensure safety, efficiency, and environmental standards.
5. Transportation: Certain transportation industries, such as air transport, rail transport, and road transport, require licenses and adherence to regulations to ensure safety, security, and compliance with transportation laws.
   Note that licensed industries are not necessarily restricted to foreign investment.
   Foreign investors can generally participate in licensed industries, subject to compliance with the licensing requirements and regulations applicable to all investors.
6. Banking and Financial Services: The banking and financial services sector in Germany is heavily regulated and requires licenses from the relevant authorities, such as the Federal Financial Supervisory Authority (BaFin).
7. Insurance: The insurance industry also requires licenses and regulatory oversight from BaFin to ensure compliance with insurance laws and consumer protection.
8. Telecommunications: The telecommunications sector, including mobile network operators and internet service providers, requires licenses from the Federal Network Agency (BNetzA) to operate in compliance with telecommunications laws and regulations.
9. Energy: The energy sector, including electricity generation, distribution, and supply, requires licenses and compliance with energy regulations to ensure safety, efficiency, and environmental standards.
10. Transportation: Certain transportation industries, such as air transport, rail transport, and road transport, require licenses and adherence to regulations to ensure safety, security, and compliance with transportation laws.
    Note that licensed industries are not necessarily restricted to foreign investment.
    Foreign investors can generally participate in licensed industries, subject to compliance with the licensing requirements and regulations applicable to all investors.

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Germany-Foreign-funded Limited Liability Company document certification.
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What are the relevant investment documents required to establish a Foreign-funded Limited Liability Company in Germany?
Are there different documents for different countries?

1. Articles of Association: This document outlines the company’s name, purpose, share capital, shareholders, management structure, and other key provisions. It must be notarized and signed by the founders/shareholders.
2. Shareholder Agreements: If there are multiple shareholders, a shareholder agreement may be drafted to define the rights and obligations of each shareholder and govern the relationship between them.
3. Proof of Share Capital: Documentation demonstrating that the required share capital has been contributed by the shareholders, such as bank statements or confirmation from a German bank.
4. Identification Documents: Passports or identification documents of the shareholders, directors, and authorized representatives involved in the company.
5. Notarized Signatures: Notarized signatures of the shareholders, directors, and authorized representatives, affirming their consent and agreement to establish the company.
6. Business Plan: A comprehensive business plan outlining the company’s objectives, market analysis, financial projections, and operational strategies.
7. Certificate of Incorporation or Registration: If the parent company is already established in another jurisdiction, documentation proving its legal existence and registration in its home country may be required.
   Specific requirements and documents may vary based on the circumstances and the legal requirements of individual countries.

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What are the procedures for the certification of documents related to the investment of Foreign-funded Limited Liability Company in Germany?
Are there different document authentication procedures for different countries?

1. Notarization: Certain documents, such as the Articles of Association and shareholder agreements, may need to be notarized. Notarization involves the authentication of the document’s signatures and content by a notary public.
2. Legalization: If the documents originate from a country that is not a party to the Hague Apostille Convention, they may need to undergo a process of legalization. This involves having the documents certified by the relevant authorities, such as the foreign ministry or embassy of the country where the documents were issued.
3. Translation: If the documents are not in German, they may need to be translated into German by a certified translator. The translated documents are typically attached to the original documents.
4. Submission to Authorities: The certified and translated documents, along with any other required forms or applications, are submitted to the relevant authorities in Germany. These authorities may include the local trade registry (Gewerbeamt), commercial register (Handelsregister), or other government agencies, depending on the nature of the investment and the type of business being established.
   Authentication requirements can vary based on the specific regulations and agreements between countries.
   Some countries may require additional steps such as consular legalization or specific authentication processes.

R-de-llc-4 Germany – Bank Account Opening of Foreign Subsidiaries
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What is the sequence steps of set up a Foreign-funded Limited Liability Company in Germany with share capital paid in place and opening a bank account? Which one should come first?

1. Open Bank Account: Before paying the share capital, it is advisable to open a bank account in Germany. This will provide a designated account to receive the share capital and manage company finances.
2. Transfer Share Capital: Once the bank account is opened, transfer the required share capital into the account. This can be done through a wire transfer or deposit.
3. Obtain Bank Confirmation: After the share capital has been transferred, request a bank confirmation letter or certificate verifying that the share capital has been deposited in the company’s bank account.

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What are the usual KYC regulations when opening a bank account with a Foreign-funded Limited Liability Company in Germany?

1. Company Information: You will need to provide basic information about the LLC, such as its legal name, registered address, business activities, and registration details.
2. Identification of Directors and Authorized Signatories: You will be required to provide identification documents, such as passports or national ID cards, for all directors and authorized signatories of the company.
3. Proof of Address: Banks typically require proof of address for the company and its directors or authorized signatories. This can be in the form of utility bills, bank statements, or government-issued documents.
4. Proof of Business Activities: Banks may request documents or information that demonstrate the nature of your company’s business activities, such as business licenses, contracts, or invoices.
5. Shareholding Structure: You may need to provide information about the shareholders of the company, including their ownership percentages and identification documents.
6. Beneficial Ownership: Banks may inquire about the beneficial owners of the company, which are individuals who ultimately own or control the company. You may be required to provide information and documentation related to beneficial ownership.
7. Purpose of the Account: Banks may ask about the intended purpose of the account, such as general operations, payroll management, or international transactions.

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Will the bank require a Germany local director when opening a bank account for a Germany wholly foreign-owned limited liability company (LLC)?

Some banks may have such a requirement, others may not necessarily insist on a local director.

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Will the bank require foreign legal representative have to be physically present for the bank interview, when opening a bank account with a Foreign-funded Limited Liability Company in Germany?

Some banks may require the presence of a legal representative during the account opening process, while others may offer alternative arrangements such as video conference interviews or allow a representative to be appointed.

R-de-llc-5 Germany – Staff Work Permit, Visa, and Residence
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Can a Foreign-funded Limited Liability Company in Germany send expatriates to Germany as the Investor’s role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences in different countries?

Yes. These expatriates would typically require work permits, visas, and residence permits to legally reside and work in Germany.

1. Work Permit: The work permit, also known as an employment authorization, allows expatriates to work in Germany. The LLC must demonstrate that the position cannot be filled by a qualified German or EU citizen. The specific requirements and application process for the work permit may vary depending on factors such as the expatriate’s qualifications, salary, and the specific visa category applied for.
2. Visa: Expatriates from non-EU/EEA countries typically require a visa to enter Germany. The type of visa will depend on the purpose of the expatriate’s stay, such as employment, investment, or business activities. The visa application is generally submitted at the German embassy or consulate in the expatriate’s home country and requires specific documentation, including a valid passport, proof of accommodation, travel insurance, and a sponsorship or invitation letter from the German LLC.
3. Residence Permit: Once the expatriate has arrived in Germany, they need to apply for a residence permit that allows them to legally reside and work in the country. The residence permit application is usually submitted to the local immigration office (Ausländerbehörde) in Germany. The specific requirements and documents needed may vary depending on the expatriate’s situation and the type of permit being applied for.
   Regarding differences in the application process for work permits, visas, and residence permits based on different countries, it’s important to note that the specific requirements and procedures can vary.

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Can a Foreign-funded Limited Liability Company in Germany send expatriates to Germany as the employee role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences for different countries?

Yes. The application requirements, documents, and procedures for work permits, visas, and residence permits can vary depending on the specific circumstances and the nationality of the expatriates.

1. Work Permit: The work permit, also known as an employment authorization, allows expatriates to work in Germany. The LLC must demonstrate that the position cannot be filled by a qualified German or EU citizen. The specific requirements and application process for the work permit may vary depending on factors such as the expatriate’s qualifications, salary, and the specific visa category applied for.
2. Visa: Expatriates from non-EU/EEA countries typically require a visa to enter Germany for employment purposes. The type of visa will depend on the duration and purpose of the employment. The visa application is usually submitted at the German embassy or consulate in the expatriate’s home country and requires specific documentation, such as a valid passport, employment contract, proof of qualifications, and proof of sufficient financial means.
3. Residence Permit: Once the expatriate has arrived in Germany, they need to apply for a residence permit that allows them to legally reside and work in the country. The residence permit application is generally submitted to the local immigration office (Ausländerbehörde) in Germany. The specific requirements and documents needed may vary depending on the expatriate’s situation and the type of permit being applied for.
   https://www.germany-visa.org/work-employment-visa/

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What are the evaluation factors or requirements for a Foreign-funded Limited Liability Company in Germany when applying work permit, visa, and residence permit?
What is the relationship with the salary, capital, and turnover of Foreign-funded Limited Liability Company?
Are there differences for different countries?

1. Job Offer: The LLC will typically need to provide a job offer to the foreign employee, specifying the position, responsibilities, and duration of employment.
2. Salary: The salary offered to the foreign employee is an important factor in the evaluation process. It should meet the minimum salary requirements set by the German authorities to ensure that the employee can support themselves financially in Germany.
3. Qualifications: The employee’s qualifications and experience should match the requirements of the job position. The LLC may need to demonstrate that the employee possesses the necessary skills and expertise that cannot be easily found within the German or EU labor market.
4. Capital and Turnover: While the capital and turnover of the Foreign-funded LLC may not be directly evaluated for work permit, visa, and residence permit applications, they can indirectly impact the credibility and financial stability of the company. A well-established company with a strong financial track record may enhance the chances of a successful application.
5. Compliance with Labor Laws: The LLC must comply with German labor laws and regulations, including those related to employment contracts, working conditions, and social security contributions.
   Some countries may have specific agreements or visa facilitation programs with Germany, which could impact the evaluation process.
   Additionally, specific visa categories and requirements may differ based on the employee’s nationality and the nature of their employment.
   

   Submit

   https://www.schengenvisainfo.com/germany/visa/employment-visa/
   https://www.welcome-hub-germany.com/blog/german-work-visa

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Germany- Registered Address and Operating Address of Foreign-funded Limited Liability Company in Germany.
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What are the regulations on the registered address during the company registration and future operating address of a Foreign-funded Limited Liability Company in Germany?

Registered Address:

1. Legal Requirement: The LLC is required to have a registered address in Germany. This address will be officially registered with the authorities and will serve as the official contact address for the company.
2. Physical Presence: The registered address must have a physical presence where official correspondence and legal documents can be received. It should not be a post office box or a virtual office address.
3. Documentation: The LLC needs to provide proof of the registered address during the company registration process. This can be in the form of a lease agreement or an ownership document for the premises.
   Operating Address:
4. Business Operations: The operating address refers to the location where the LLC conducts its day-to-day business activities. This address can be different from the registered address.
5. Flexibility: The operating address can be a rented office space, commercial premises, or even a shared workspace, depending on the needs of the company.
6. Commercial Registration: If the operating address is different from the registered address, the LLC may need to update the commercial register with the new address.

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What are the specific regulations or requirements of a registered office address for a permitted industry of an LLC in Germany?

1. Zoning and Permit Requirements: Some industries may have specific zoning regulations or permit requirements that dictate where certain types of businesses can be located. It’s important to ensure that the registered office address complies with these requirements.
2. Commercial Use: The registered office address should be suitable for commercial use, as certain residential or mixed-use areas may have restrictions on operating commercial businesses.
3. Lease or Ownership Documentation: The LLC will typically need to provide documentation such as a lease agreement or ownership document for the registered office address. This documentation helps verify that the address is legally authorized for commercial use.
4. Accessibility: The registered office address should be easily accessible to the LLC’s stakeholders, including clients, employees, and authorities. It should be in a location that facilitates business operations and communication.
5. Official Correspondence: The registered office address will be used for official correspondence and legal notices. It should be a reliable address where important documents can be received and responded to in a timely manner.

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Amount of investment, registered capital, and government fees for Foreign-funded Limited Liability Company in Germany.
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Are there any regulations on authorized share capital, registered share capital and paid-up share capital of a Foreign-funded Limited Liability Company in Germany?
Is there any requirement for minimum funds to be in place within a certain period?

1. Authorized Share Capital (Genehmigtes Kapital):
   • Authorized share capital refers to the maximum amount of capital that a company is allowed to issue. In Germany, there are no specific legal requirements for the authorized share capital of an LLC. It can be set at any amount determined by the shareholders in the company’s articles of association (Gesellschaftsvertrag).
2. Registered Share Capital (Stammkapital):
   • Registered share capital, also known as nominal share capital or share capital at incorporation, represents the actual initial capital contributed by the shareholders when forming the LLC. The minimum requirement for registered share capital in a German LLC is €25,000. A new form of GmbH, the “Unternehmergesellschaft”/ UG incorporated a share capital of less than the €25,000.
3. Paid-up Share Capital (Eingezahltes Kapital):
   • Paid-up share capital refers to the portion of the registered share capital that has been fully paid by the shareholders. The total amount of the effected cash contributions plus the amount of contributions-in-kind must be at least 50% of the GmbH’s share capital, i.e., 12,500 euros, in the case of the GmbH’s minimum share capital of 25,000 euros. The share capital of an Unternehmergesellschaft (UG) must be paid in full as a cash contribution.

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What is the relation between government fees with authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company in Germany?

The costs of incorporating a GmbH depend on the amount of its stated share capital. Where this is equal to the statutory minimum capital of 25,000 euros, the notarial fee should be about 700 euros plus German value added tax (VAT) and the fees and expenses of the Commercial Register Court should be about 200 euros plus VAT.
The costs of incorporating an Unternehmergesellschaft may be lower.

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Application of Certificate Number for a Foreign-funded Limited Liability Company in Germany
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What are the company certificate numbers needed to apply with the relevant legal entities for a foreign-funded Limited Liability Company in Germany?

1. Commercial Register Number (Handelsregisternummer):
   • This is a unique identification number assigned to companies upon registration with the local commercial register (Handelsregister). It serves as an official identifier for the LLC and is obtained during the registration process.
2. Tax Identification Number (Steuernummer):
   • The tax identification number is assigned by the local tax office (Finanzamt) upon registration of the LLC for tax purposes. It is used for tax-related matters, including tax filing and correspondence with tax authorities.
3. Value Added Tax Identification Number (Umsatzsteuer-Identifikationsnummer):
   • If the LLC engages in taxable transactions, it may be required to obtain a Value Added Tax (VAT) identification number. This number is used for VAT-related matters within the European Union (EU).

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What are the certificate application for the Foreign-funded Limited Liability Company in Germany as a tax entity?

1. Tax Identification Number (Steuernummer):
   • The Tax Identification Number is assigned by the local tax office (Finanzamt) upon registration of the LLC for tax purposes. It serves as a unique identifier for the company for tax-related matters.
2. Value Added Tax (VAT) Certificate (Umsatzsteuerbescheinigung):
   • If the LLC engages in taxable transactions, it may need to apply for a VAT certificate. This certificate confirms the company’s VAT registration and is issued by the local tax office.
3. Employer Identification Number (Betriebsnummer):
   • If the LLC has employees in Germany, it may need to apply for an Employer Identification Number from the Federal Employment Agency (Bundesagentur für Arbeit). This number is used for reporting and communicating with social security institutions, employment agencies, and payroll purposes.

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What are the certificate application for Foreign-funded Limited Liability Company in Germany in relation to withholding tax on salary and employee benefits?

1. Tax Identification Number (Steuernummer):
   • The Tax Identification Number is required for the LLC to fulfill its withholding tax obligations. It is obtained through the application process with the local tax office (Finanzamt) and is used for tax-related matters, including withholding tax on salary and employee benefits.
2. Wage Tax Deduction Certificate (Lohnsteuerbescheinigung):
   • The Wage Tax Deduction Certificate is issued annually by the employer (the LLC) to each employee. It contains details of the employee’s income, tax deductions, and withheld wage tax. This certificate is provided to employees for their income tax filing purposes.
3. Employer Identification Number (Betriebsnummer):
   • The Employer Identification Number is assigned by the Federal Employment Agency (Bundesagentur für Arbeit) and is used for reporting and communicating with social security institutions and the employment agency. It is required when employing workers in Germany.

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What are the other independent certificate numbers or application, or declaration related to the government’s jurisdiction for Foreign-funded Limited Liability Company in Germany?

1. Certificate of Incorporation (Gründungsurkunde):
   • This is the official document that confirms the formation and incorporation of the LLC. It includes information about the company’s shareholders, directors, registered address, and other key details.
2. Business Registration Certificate (Gewerbeanmeldung):
   • The LLC needs to register its business activities with the local trade office (Gewerbeamt) by submitting a Business Registration Certificate. This certificate confirms that the company is operating legally and compliant with local business regulations.
3. Trade License (Gewerbeschein):
   • Depending on the nature of the LLC’s business activities, it may need to obtain a Trade License, which authorizes the company to engage in specific trades or professions that require official approval.
4. Environmental Permits (Umweltgenehmigungen):
   • If the LLC operates in industries that have environmental impact, it may be required to obtain specific environmental permits or declarations to comply with environmental regulations and ensure proper handling of waste, emissions, or hazardous substances.
5. Customs Declaration (Zollanmeldung):
   • If the LLC engages in import or export activities, it may need to submit customs declarations for goods entering or leaving Germany. These declarations ensure compliance with customs regulations and facilitate the smooth movement of goods across borders.

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To summarize: Which of the following certificate numbers do Foreign-funded Limited Liability Company in Germany need to apply for?
National (federal) company certificate number, provincial (state) company certificate number, national (federal) tax certificate number, provincial (state) tax certificate number, national value-added tax certificate number, provincial (state) value-added tax certificate number, social insurance card number, medical insurance card number, pension certificate number, other funds such as housing fund certificate number, labor union certificate number, import and export certificate number, and franchise industry certificate number.

1. National (federal) company certificate number: This is typically obtained upon registration with the local commercial register (Handelsregister) at the federal level.
2. National (federal) tax certificate number: This is obtained from the local tax office (Finanzamt) at the federal level upon registration for tax purposes.
3. National value-added tax certificate number: This is obtained through registration for Value Added Tax (VAT) at the federal level, if the LLC engages in taxable transactions.
   The other certificate number, such as provincial (state) company certificate number, provincial (state) tax certificate number, provincial (state) value-added tax certificate number, social insurance card number, medical insurance card number, pension certificate number, housing fund certificate number, labor union certificate number, import and export certificate number, and franchise industry certificate number, are not typically specific to the LLC registration process in Germany.
   They may be relevant for specific purposes or industries, but they are not standard requirements for all LLCs.

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Incorporation procedures of Germany-Foreign-funded Limited Liability Company and key matters
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What are the procedures of setting up a Foreign-funded Limited Liability Company in Germany? Documents required? Competent Government unit? Websites?

1. Choose a Company Name: Select a unique and acceptable name for your LLC that complies with German naming conventions.
2. Draft Articles of Association: Prepare the Articles of Association, which outline the company’s structure, management, and other key details. This document should be notarized.
3. Appoint Directors and Shareholders: Identify the individuals or entities who will serve as directors and shareholders of the LLC. At least one director must have a registered address in Germany.
4. Capital Contribution: Determine the capital contribution for the LLC and open a bank account to deposit the initial capital.
5. Notarization and Registration: Notarize the Articles of Association and submit them, along with other required documents, to the local commercial register (Handelsregister). The registration process establishes the legal existence of the LLC.
6. Obtain Tax Numbers: Apply for a Tax Identification Number (Steuernummer) and a Value Added Tax (VAT) Certificate (Umsatzsteuerbescheinigung) from the local tax office (Finanzamt) for tax purposes.
7. Register with Social Security: Register the LLC with social security authorities (Sozialversicherungsträger) and obtain an Employer Identification Number (Betriebsnummer) for employment and social security contributions.

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What are key consideration matters of when deciding to set up foreign-funded limited liability company in Germany?

1. Legal and Regulatory Environment: Understand the legal framework, regulations, and requirements for establishing and operating an LLC in Germany. Consider the corporate and tax laws, as well as any industry-specific regulations that may apply to your business.
2. Market Opportunities: Assess the market potential and opportunities for your products or services in Germany. Conduct market research to understand the demand, competition, and potential customers in your target industry.
3. Investment Climate: Evaluate the overall investment climate in Germany, including factors such as political stability, economic growth, infrastructure, and ease of doing business. Consider the regional and local factors that may impact your business operations.
4. Business Plan and Financial Viability: Develop a comprehensive business plan that outlines your company’s objectives, strategies, and financial projections. Ensure that your business model is viable and sustainable in the German market.
5. Capital Requirements: Determine the capital requirements for setting up and operating your LLC in Germany. Consider the initial investment, ongoing operational costs, and financial resources needed to sustain your business.
6. Local Partnerships and Networks: Consider establishing local partnerships or networks to leverage local knowledge, contacts, and resources. This can help facilitate market entry, business development, and navigating the local business landscape.
7. Language and Cultural Factors: Familiarize yourself with the German language and cultural norms, as they play an important role in business interactions and building relationships with customers, suppliers, and employees.
8. Tax Implications: Understand the tax implications and obligations associated with operating an LLC in Germany. Consider consulting with tax professionals to ensure compliance and optimize your tax strategy.
9. Human Resources and Labor Laws: Familiarize yourself with German labor laws, employment regulations, and hiring practices. Understand the requirements and obligations related to employee contracts, wages, working hours, and social security contributions.

Contact Us

Evershine (Deutschland) GmbH ,One of Evershine affiliates
Email: fra4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German English and Chinese.
skype: burlinna

or
For investment structure relevant to multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4fra@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
linkedin address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
6th Floor 378 Chang Chun Rd., Taipei City, Taiwan ROC
Partner Kerry Chen, USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

Evershine has 100% affiliates in the following cities:
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Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2024/07)

Please send an email to HQ4fra@evershinecpa.com

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