Setting Up a GmbH as a Foreign Investor:
Process, Roles, Timeline.

If you want your own company in Germany, the GmbH is the obvious choice. It can be wholly owned by a company abroad, and only its own assets are liable for its debts. The path to registration follows fixed steps. Some of them will be unfamiliar to investors from other countries: a mandatory notary, capital in the bank account before registration, and a separate register for the people behind the company. Here you can see the sequence, the parties involved and the points where time is lost.

What a GmbH is

GmbH stands for “Gesellschaft mit beschränkter Haftung”, a limited liability company. It is a legal entity in its own right: it enters into contracts, owns property, and can sue and be sued. Towards creditors, only the company’s assets are liable (§ 13 GmbHG). A single shareholder is enough, and that can be a foreign corporation (§ 1 GmbHG). The minimum share capital is €25,000 (§ 5 Abs. 1 GmbHG). The GmbH is run by one or more managing directors; the shareholders decide at the shareholders’ meeting, for example on the annual financial statements and the appropriation of profits (§ 46 GmbHG).

The Unternehmergesellschaft (UG) requires less capital, but must carry the suffix “UG (haftungsbeschränkt)” (limited liability) and set aside a quarter of its annual net profit (§ 5a GmbHG). For an investment project, the GmbH usually makes the better impression. Whether an AG is a better fit is covered in the article GmbH or AG?, and whether a holding company belongs in between in our article on Holding Structures. If you cannot wait, read our article on the Shelf Company (Vorratsgesellschaft).

The steps in the right order

Notary and articles of association

In Germany, the articles of association must be notarised (§ 2 Abs. 1 GmbHG). The notary verifies the identity of the parties and reads the agreement aloud (§§ 10, 13 BeurkG). The subsequent application to the commercial register is also filed electronically in publicly certified form (§ 12 HGB), in practice through the notary. If a shareholder is represented, the power of attorney must be notarised or notarially certified (§ 2 Abs. 2 GmbHG). The statutory model protocol (§ 2 Abs. 1a GmbHG) allows a maximum of three shareholders and one managing director; for group structures, bespoke articles are usually the better fit.

If the shareholder is a foreign company, the notary needs to know that it exists and who may represent it. Register extracts and powers of attorney from the home country serve this purpose. For public documents from states party to the 1961 Hague Convention, the apostille replaces the former legalisation. China has acceded to this convention; it has applied there since 7 November 2023. Plan the apostille and certified translations early. These documents often drive the timetable more than the notary appointment does.

Online formation: possible, but not for everyone

The articles of association can also be notarised by video through the Federal Chamber of Notaries’ system (§ 2 Abs. 3 GmbHG, § 16a BeurkG). For many investors, the catch is identification: the notary needs an electronic proof of identity, such as the German identity card, the eID card for EU citizens, a German electronic residence permit or an eID means of an EU or EEA state notified at assurance level “high” (§ 16c BeurkG). Anyone who has none of these forms the company in person in Germany or via a power of attorney. We clarify in advance with the notary which form of power of attorney they will accept.

Capital and bank account: the chicken-and-egg problem

The GmbH may only be registered once a quarter has been paid in on each share and at least half of the minimum share capital is available in total, i.e. €12,500 (§ 7 Abs. 2 GmbHG). The managing directors confirm this in the application. If in doubt, the court can request proof of payment from an EU institution (§ 8 Abs. 2 GmbHG). So the account has to be in place before registration.

In practice, this is the biggest time factor. Under the Money Laundering Act (GwG), German banks must identify the beneficial owners of their customers. They may not rely solely on the Transparency Register; they must collect the information from the customer directly (§ 11 Abs. 5 GwG). The customer must provide the necessary documents (§ 11 Abs. 6 GwG). For a group structure, this means: an organisation chart up to the natural persons, ID documents and register extracts for every level.

“Most delays happen not at the notary but when opening the bank account. If you bring a complete organisation chart up to the ultimate owner and all ID documents, you often save weeks.”

Fatma Tabak, tax advisor · TABAK Steuerberatung

Important until registration: before then, the GmbH does not exist “as such”. Anyone who already acts in its name is personally liable (§ 11 GmbHG). Leases and orders should therefore wait or be expressly provided for.

Managing directors resident abroad

Any natural person with full legal capacity can be a managing director (§ 6 Abs. 2 GmbHG). The law does not require residence in Germany or a particular nationality. Anyone convicted of certain business or insolvency offences is disqualified, including convictions abroad. The managing director confirms this to the register court; the required instruction can also be given by a notary abroad or a consular official (§ 8 Abs. 3 GmbHG). The application must also state a business address in Germany (§ 8 Abs. 4 GmbHG).

For tax purposes, what counts is where the company is actually managed. The law calls this the “centre of management” (§ 10 AO). If all decisions are taken abroad, the tax office and banks will ask questions. How much presence in Germany makes sense is described in our article on economic substance.

Commercial register and Transparency Register

The commercial register (Handelsregister) is the public company register. It is kept by the local court at the company’s registered office (§ 7 Abs. 1 GmbHG), and anyone may inspect it (§ 9 HGB). A list of shareholders is filed with the application. Where a shareholder is a company, the list shows its name, registered office and registration number (§ 40 GmbHG).

The Transparency Register is a second register. It shows the natural persons who ultimately own or control the company. A beneficial owner is anyone who directly or indirectly holds more than 25 percent of the capital or voting rights or exercises control in a comparable way (§ 3 Abs. 2 GwG). Reporting is the company’s own obligation, in addition to the commercial register.

“Legal entities under private law and registered partnerships shall obtain, keep, keep up to date and notify the registrar without delay for entry in the Transparency Register the information on the beneficial owners of these entities listed in § 19 (1).”

§ 20 Abs. 1 Satz 1 GwG (German Money Laundering Act, unofficial translation)

The report covers name, date of birth, place of residence, the nature and extent of the beneficial interest and all nationalities (§ 19 Abs. 1 GwG). The shareholders must provide this information to the GmbH (§ 20 Abs. 3 GwG). Breaches are subject to fines (§ 56 GwG).

Tax registration

A GmbH with its registered office or place of management in Germany has unlimited corporation tax liability here (§ 1 KStG). It must notify the tax office and the municipality of its formation within one month (§ 137 AO). In addition, there is the trade registration with the municipality and an electronic questionnaire for the tax office (§ 138 Abs. 1 and 1b AO). For supplies of goods and services within the EU, the GmbH also needs a VAT identification number from the Federal Central Tax Office (§ 27a UStG).

These steps are handled by our partner tax firm TABAK Steuerberatung, which is responsible for all tasks reserved to licensed tax advisors. In parallel, we check the reporting obligations towards the Bundesbank, which we explain in our article on AWV Reporting Obligations . If you are acquiring an existing business rather than setting one up, start with our guides Buying a Business and investment screening.

A realistic timeline

The law sets no fixed deadline for registration. The pace is set by the documents from the home country, the bank account opening and the register court.

“With complete documents from the home country, we usually plan four to six weeks to registration for a new company. More important than the number of weeks is that the investor, notary, bank and tax advisors are all working from the same plan.”

Fatma Tabak, tax advisor · TABAK Steuerberatung

Structure, tax via our partner firm, bookkeeping and IT – all from a single source. We advise you in English — directly, without intermediaries.

Frequently Asked Questions

Sources

• § 2 GmbHG – form of the articles of association, online formation
• § 6 GmbHG – managing directors
• § 7 GmbHG – application for registration and minimum contribution
• § 8 GmbHG – content of the application
• § 16c BeurkG – identification for video notarisation
• § 20 GwG – transparency obligations
• § 3 GwG – beneficial owner
• § 137 AO – tax registration of corporations
• HCCH – status table of the 1961 Apostille Convention
• Transparency Register of the Federal Republic of Germany

Fatma Tabak

Tax advisor (Nordbaden Chamber of Tax Advisors) · Founder, TABAK Consulting

More than 20 years advising entrepreneurs, investors and family businesses. Reserved tax services are provided by our partner tax firm, TABAK Steuerberatung.

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