A German holding GmbH is often the simplest answer for foreign investors to a complicated question: How do I enter the EU market with a legally secure, bankable, and substance-compliant structure?
The answer depends on the country of origin. Double taxation agreements (DTA), withholding tax rates, anti-abuse clauses, and substance requirements vary significantly. Below are the most important constellations as we see them in practice.
Saudi Arabia & GCC
With Vision 2030, the Saudi capital market has internationalized. The DTA between Germany and Saudi Arabia (since 2008) provides for reduced withholding tax rates on dividends (5%) and royalties. A German holding offers Saudi investors three structural advantages:
- Entry into the EU internal market through a single legal entity
- Bankability significantly higher than with pure KSA structures
- Substance-compliant BEPS structure, recognized by Western financial partners
United Arab Emirates
Since the introduction of the 9% corporate tax in the UAE (2023), home taxation remains low. The German holding complements EU market access, substance, and DTA benefits. The DTA UAE–DE provides for a 5% withholding tax on dividends. Ideal for investors looking to couple GCC-wide activities with a European sales base.
USA
The DTA with comprehensive protection against double taxation includes a LOB clause (Limitation on Benefits) that must be examined. A German holding can actively manage GILTI/Subpart-F issues and cleanly separate EU operations from US operations. For § 8b KStG-compliant exit plans, German holdings are particularly attractive.
United Kingdom
Post-Brexit, the German holding is the most pragmatic way for British investors to operate in the EU internal market. DTA since 2010, 0% withholding tax on dividends with at least 10% participation. Sterling/Euro account structure without issues.
Switzerland
One of the most attractive countries for DTAs. The Parent-Subsidiary Directive applies: 0% withholding tax from 10% participation. The combination of Swiss private assets and a German operational holding is standard in the UHNW sector.
Singapore
The APAC hub Singapore and the German holding together form a global distribution network. Tax-optimal, with a high compliance reputation and banking capability on both sides. For tech and service investors with an Asia plan.
A German holding is the contracting party for EU transactions. This implies: German contract law, German jurisdiction, receivables management domestically. For investors from third countries, often the most economically valuable lever — even beyond the tax advantages.
The most important prerequisites
- substance: At least one managing director residing in Germany, business premises, own decisions on site.
- BEPS compliance: No mailbox constructions. ATAD requires economic activity.
- Bank account: KYC processes at German banks are strict. A professional address and a clearly structured client profile are crucial.
- Tax declaration: Double corporate and trade tax declarations plus DTA application. Rarely correct without experienced advice.
Typical structuring process at TABAK
- Strategy workshop (1 week): Investor situation, target market, investment volume, planned activities.
- Structure proposal (1 week): Legal form, substance concept, DTA application, tax modeling.
- Incorporation (3–5 weeks): Notary, commercial register, bank accounts, tax registration.
- Operational commencement (ongoing): Accounting, reporting, tax returns, international coordination.
Over 20 years of consulting practice for entrepreneurs, investors, and family businesses. Tax-related reserved tasks are provided by the partner firm TABAK Steuerberatung.
Firm Profile →International market entry?
We structure your German holding so that DBA advantages, substance requirements, and bankability are aligned from the start.