In short
The usual structure is the GmbH, with €25,000 capital (at least €12,500 paid in at formation), or the UG from €1. The articles must be notarised; video notarisation needs a German or EU eID, so US founders usually sign in person at a German notary or through an apostilled power of attorney. Notary and register fees are about €550–730+ net. There is no residence rule for managing directors. Every GmbH must record its beneficial owners in the Transparency Register. Tax is 15.825% corporate tax plus trade tax — about 30% in Berlin — and the corporate part falls to 10% by 2032. Dividends to US shareholders are taxed at 15%, 5% or 0% under the treaty.
German company: key facts
Last verified 28 September 2026| Company types | GmbH with €25,000 capital (€12,500 paid in at formation) or UG from €1# Source: Limited Liability Companies Act § 5 (GmbHG) |
|---|---|
| Notary | Articles must be notarised; video notarisation needs a German or EU eID, so US founders sign in person or by apostilled power of attorney# Source: Limited Liability Companies Act § 2 (notarial form) · IHK Koblenz: online formation of a GmbH |
| Formation cost | About €550 (model protocol) to €730+ net in notary and register fees; register fee €225 estimate# Source: IHK Saarland: GmbH formation costs (March 2026) |
| Managing director | No residence or nationality requirement# Source: Betriebs-Berater: non-EU managing director need not be able to enter Germany |
| Transparency Register | Every GmbH must register its beneficial owners (over 25%) itself# Source: RAK München: Transparency Register — end of the filing fiction |
| Corporate tax | 15% + 5.5% solidarity surcharge (15.825%), plus trade tax — about 30% in Berlin, 33% in Munich; falling by 1 point a year from 2028 to 10% in 2032# Source: Corporate Tax Act § 23 (15%) · Federal Law Gazette 2025 I No. 161: investment programme (corporate tax cut) · Berlin Senate: trade tax FAQ · City of Munich: trade tax multipliers |
| VAT | 19% standard, 7% reduced# Source: Federal Ministry of Finance: small-business VAT rules from 2025 |
| Small-business VAT rule | No VAT charged if turnover was up to €25,000 last year and stays under €100,000 this year# Source: Federal Ministry of Finance: small-business VAT rules from 2025 |
| Annual accounts | Filed with the Unternehmensregister within 12 months of year-end# Source: IHK Köln: disclosure of annual accounts |
| Audit | Needed above two of: €7.5M balance sheet, €15M turnover, 50 employees (small-company limits from 2024)# Source: IHK: new HGB size thresholds (2024) |
| Dividend withholding | 26.375% (25% + solidarity surcharge); US treaty 15%, 5% (10%+), 0% (80%+ for 12 months, LOB)# Source: Income Tax Act § 43a (withholding rate) · US Congress report on the 2006 US–Germany protocol |
| US tax treaty | 1989 treaty with 2006 protocol; saving clause lets the US tax its citizens# Source: US Congress report on the 2006 US–Germany protocol |
| US anti-deferral tax | GILTI renamed NCTI from 2026; Germany's ~30% (about 25% after 2032) stays above the 18.9% threshold# Source: US Code: 26 USC 951A (net CFC tested income) · Federal Law Gazette 2025 I No. 161: investment programme (corporate tax cut) |
Not American?
Canadians, Australians, Brits and other non-EU citizens: the same rules apply
German company law is the same for every foreign founder, so Canadians, Australians, New Zealanders and Brits register a GmbH exactly as described here. Only a few points differ:
- Canada
- Australia
- New Zealand
- United Kingdom
- Japan
- South Korea
- + other visa-free countries
| Living in Germany | A company does not give you residence. Non-EU founders who want to live in Germany need a permit, such as the self-employment permit. |
|---|---|
| Home-country tax | US citizens are taxed on worldwide income and have extra filings (Form 5471, FBAR, NCTI). Other nationals usually aren't taxed this way. |
| Tax treaty with Germany | Germany has income tax treaties with the US and many other countries, including Canada, Australia, New Zealand and the UK. |
| Documents from abroad | Need an apostille; the US, Canada (since 11 Jan 2024), the UK, Australia and NZ issue them.Source: HCCH: Apostille Convention status table |
At a Glance
German Company Formation in Numbers
Why Germany
Why Americans Register Companies in Germany
Germany is the EU's largest economy and the world's third-largest goods exporter. A German GmbH carries weight with customers and partners across Europe, and the legal system is predictable.
The trade-off is formality: a notary, a commercial register entry, three tax returns a year and HGB accounting. With a good notary and tax adviser, it is very manageable.
Business Structures
Which Entity Type Is Right for You?
Limited Liability Company
GmbH
The standard German company. €25,000 capital, at least €12,500 paid in at formation. One or more managing directors with no residence requirement.
- Min. capital
- €25,000
- Management
- Managing director (any residence)
- Liability
- Limited to capital
Entrepreneurial Company
UG (haftungsbeschränkt)
A GmbH variant from €1 capital. A quarter of each year's profit must be retained until the capital reaches €25,000.
- Min. capital
- €1
Stock Corporation
AG
For larger companies and listings. €50,000 capital, management board and supervisory board.
- Min. capital
- €50,000
Partnerships
GbR · OHG · KG
General partners are personally liable. Since 2024 a GbR can be entered in a new partnership register.
- Min. capital
- None
Tax Environment
Germany's Three-Layer Corporate Tax
A GmbH pays 15% corporate tax plus a 5.5% solidarity surcharge on it (15.825% in total — no reduction for small companies), plus municipal trade tax. Trade tax is 3.5% times the city's multiplier: 410% in Berlin (14.35%), 460% in Frankfurt and 490% in Munich. A law passed in July 2025 cuts corporate tax by 1 point a year from 2028 to 10% in 2032.
Under the US–Germany treaty (1989, 2006 protocol), dividends are taxed at 15% in general, 5% for a US company holding at least 10%, and 0% for a company holding 80% or more for 12 months that meets the limitation-on-benefits test. A reduced rate at source needs an exemption certificate from the Federal Central Tax Office (BZSt); otherwise you reclaim the difference.
US citizens and Green Card holders are taxed on worldwide income. Owning a GmbH usually means Form 5471 and an FBAR if your foreign accounts exceed $10,000 in total. From tax years starting in 2026, GILTI has been renamed net CFC tested income (NCTI). Germany's ~30% rate — about 25% after the 2032 cut — stays above the 18.9% high-tax threshold. A GmbH or UG can elect partnership or disregarded treatment (Form 8832). The treaty's saving clause lets the US tax its citizens as if the treaty did not exist. Consult a US international tax adviser.
Step-by-Step Process
How to Register a GmbH in Germany
Choose structure and city Decision
GmbH or UG — and the city, which sets your trade tax.
Check the company name ~1 day
The name must be clearly distinguishable from companies already registered in the same town, and include "GmbH" or "UG (haftungsbeschränkt)". Ask the local chamber of commerce (IHK) to check it.
Notarise the articles Notary
All shareholders sign before a German notary — in person or by apostilled power of attorney. Video notarisation needs a German or EU eID, which US founders usually don't have. A model protocol is possible for up to 3 shareholders and 1 managing director.
Pay in the capital Banking
Open an account for the "GmbH in formation" and pay in at least €12,500 (a quarter of each share, and half of €25,000 in total). Expect thorough bank checks.
Commercial register entry 3–4 weeks
The notary files the application. The GmbH exists only once it is registered — typically about 3–4 weeks after the notary appointment. Register fee €225.
Trade office and tax registration Post-registration
Register the business with the trade office (Gewerbeamt) and file the tax questionnaire on ELSTER within one month of starting. The tax office issues your tax number; the VAT ID comes from the Federal Central Tax Office.
Transparency Register Required
Record your beneficial owners (over 25%) in the Transparency Register — this is not automatic.
Costs & Fees
What Does It Cost to Register a Company in Germany?
| Cost item | Notes | Amount |
|---|---|---|
| Notary and register (model protocol) | Simplified formation, up to 3 shareholders (net). | about €550 |
| Notary and register (individual articles) | Standard formation (net). | about €730+ |
| Commercial register fee | Cash contributions (included above). | €225 |
| Share capital | GmbH / UG. | €25,000 (€12,500 paid in) / from €1 |
| Tax adviser and accounting | Annual accounts, three tax returns, bookkeeping (market estimate). | varies |
Fees from IHK Saarland (March 2026). Source: IHK Saarland: GmbH formation costs
Ongoing Obligations
Post-Registration Requirements
Annual accounts and tax returns
File corporate, trade and VAT returns on ELSTER (2025 returns by 31 July 2026, or later with a tax adviser). Publish annual accounts in the Unternehmensregister within 12 months of year-end — fines for late filing start at €2,500.
Managing director
At least one managing director — any nationality or residence. The company needs a German business address.
Audit
Small companies need no audit. A GmbH needs one once it exceeds two of these on two year-ends in a row — €7.5 million balance sheet, €15 million turnover, 50 employees.
Transparency Register
Keep beneficial-owner details up to date; the register no longer relies on commercial register data.
Expert Notes
What Americans Should Know Before Registering in Germany
Choose your city deliberately
Trade tax multipliers range from the legal minimum of 200% (rising to 280% from 2027) to 490% in Munich — a difference of several percentage points on profit.
Don't trade before registration
Until the commercial register entry, people acting for the company can be personally liable.
Plan for the notary
US founders usually can't use video notarisation. Budget a trip to Germany or an apostilled power of attorney.
Bank checks take time
German banks check non-resident founders carefully — allow several weeks.
The high-tax exclusion holds
Even after the 2032 cut, German tax on profit stays well above the 18.9% US threshold.
A German GmbH is right for you if…
- You want a trusted, substantial EU company
- You can handle a notary appointment in Germany or by power of attorney
- You have €12,500 to pay in (or choose a UG)
- You will work with a German tax adviser for filings
- You understand a company does not give you the right to live in Germany
FAQ
Frequently asked questions
How much capital does a German GmbH need?
€25,000, of which at least €12,500 must be paid in before registration. A UG can start from €1 but must retain a quarter of its profits until it reaches €25,000.
Can a US founder set up a GmbH online?
Video notarisation needs a German or EU electronic ID or a German residence permit card, so most US founders sign in person at a German notary or through an apostilled power of attorney.
Does the managing director need to live in Germany?
No. There is no residence or nationality requirement; the company needs a German business address.
What is the total tax on a German GmbH?
About 30% in Berlin, 32% in Frankfurt and 33% in Munich in 2026. The corporate part falls from 15% to 10% between 2028 and 2032.
Do I need to register in the Transparency Register?
Yes. Since 2021 every GmbH must record its beneficial owners itself; commercial register data no longer counts as a filing.
Germany
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Company formation · other countries
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