Business Establishment in Hannover, Germany | HIBS-Germany

Legal Structure

How to Establish a Business in Germany

Germany stands as one of Europe’s most reliable and dynamic business destinations. If you are planning on starting a business in Germany, understanding the options for local incorporation and branch setup is crucial. This guide helps you navigate the two primary routes—setting up a GmbH (private limited company) or establishing a branch office.

Setting Up a GmbH (Gesellschaft mit beschränkter Haftung)

A GmbH is the most popular legal structure for companies operating in Germany. It combines operational flexibility, limited liability, and a reputable corporate image—making it ideal for foreign investors entering the German market.

Key Highlights:

1.Requires at least one shareholder (individual or entity)
2.No restrictions on the nationality of shareholders or directors
3.Must have a German business address and local representative
4.Minimum share capital: EUR 25,000 (cash or non-cash contributions)

Online Formation:

Since August 2022, the online formation of a GmbH through cash contributions has been possible - enabling a remote and faster incorporation procedure. The virtual notarization occurs through a video conference involving the notary and the concerned parties. The German Federal Chamber of Notaries offers a video communication platform with a two-step authentication process that necessitates electronic identity verification (eID from Germany or any other EU member state). The necessary signatures for the establishment are acquired using a qualified electronic signature.

Necessary Documentation:

To effectively enroll a business in Germany, documentation confirming the presence of a parent company and the authority of individuals representing it is essential. Typically, a portion of the foreign commercial register and the articles of association from the foreign parent company will be requested. This documentation must undergo notarization and either be legalized or furnished with an apostille. Additionally, a certified translation into German must accompany these documents. Please be aware that the necessary documentation may vary based on the foreign company's legal structure and source. Seeking guidance from a German notary early on is recommended for personalized counsel.

Legal Structure

Step 01

Step-by-Step GmbH Formation Process

Drafting of Articles of Association:

The articles of association define the essence and structure of the company. Due to its extensive potential for contractual arrangements, the GmbH is an incredibly adaptable corporation. Essential elements encompass the share capital, shareholders and their respective ownership portions, business name, registered office, and the company's purpose.

Step 02

Notarization of Articles of Association:

Typically, the composition and notarization of the articles of association are carried out in a single session through a German notary. During this session, the founding shareholder(s) approve the articles of association and designate one or more managing directors through a notarized document.

Legal Structure

Legal Structure

Step 03

Payment of Share Capital :

After the articles of association have received notarization, it's recommended to initiate the opening of a company account and make the necessary deposit for the share capital. A sum of EUR 12,500 is adequate for the registration process with the commercial register of a standard EUR 25,000 GmbH (with a cash contribution).

Step 04

Commercial Register Registration:

Once the necessary share capital has been substantiated as contributed to the GmbH, the managing director(s) proceed to request the registration of the GmbH in the commercial register (Handelsregister) through a German notary. Upon confirmation by the commercial register that all formation prerequisites have been met, the GmbH is officially registered and commences its existence as a legal entity with restricted liability.

Legal Structure

Legal Structure

Step 05

Trade Office Registration :

Before initiating business operations, it's crucial to notify the trade office (Gewerbe-/Ordnungsamt) in the applicable municipality where the business is set to operate. Generally, acquiring a business license or permit is optional for the company's registration process. However, specific business sectors might require a permit or authorization. Registering with the trade office mandates having at least one local representative.

Setting Up a Branch Office :

Foreign companies can also opt to establish a branch office in Germany. There are two forms:

Autonomous Branch Office (selbständige Zweigniederlassung):

1. Legally dependent but operationally independent
2. Own management, bank account, and business assets
3. Registers with German commercial registers

Dependent Branch Office (unselbständige Zweigniederlassung):

1. Fully dependent on the parent company
2. Handles liaison, marketing, and support functions
3. No legal autonomy or independent decision-making

Branch offices do not require separate incorporation. However, they must be registered with the German business registers.

At HIBS Germany, we guide international founders through every step of establishing a business—whether forming a GmbH or opening a branch office. We support drafting and notarizing articles of association, coordinating share capital deposits, and completing commercial and trade office registrations. From legal documentation to local compliance, we provide seamless incorporation tailored to your business needs in Germany.

FAQ

1. What is the most common legal structure for starting a business in Germany?

The most common legal structure is the GmbH (Gesellschaft mit beschränkter Haftung), a private limited liability company that offers flexibility, limited liability, and strong legal standing in the German market.

2. Can I start a business in Germany as a non-EU citizen?

Yes, non-EU citizens can establish a GmbH or a branch office in Germany. However, they must meet local legal requirements such as having a German business address and may need to secure a residence or business visa depending on their involvement.

3. What documents are required to register a GmbH in Germany?

Key documents include the articles of association, proof of capital deposit, extracts from the parent company’s commercial register, and certified translations. These must be notarized and possibly legalized or apostilled.

4. Is it possible to set up a company in Germany online?

Yes, since August 2022, Germany allows online formation of GmbHs with cash contributions through a secure notary video system and electronic identity verification.

5. How does HIBS Germany help with business setup in Germany?

HIBS Germany offers end-to-end support, including legal advisory, documentation, local registration, notary coordination, and compliance consulting—especially for foreign investors looking to enter the German market.

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