Starting a Business - Germany

Germany imposes no general restriction on foreign ownership of companies; a non-resident or foreign entity may hold 100% of a German GmbH. Acquisitions are only reviewed case-by-case under FDI screening (≥25% voting rights for non-EU investors generally, ≥10% for critical infrastructure and defence/security-relevant sectors).

A GmbH (limited liability company) requires €25,000 share capital, of which at least €12,500 must be paid in before registration. The UG (haftungsbeschränkt), or 'mini-GmbH', can be founded from €1 but must retain reserves until it reaches €25,000.

The articles of association (in German) and the formation must be notarized by a German notary, who files for entry in the Commercial Register (Handelsregister) at the local district court; the company legally exists only upon registration.

Core sequence: (1) draft & notarize articles, (2) open a German business bank account and deposit capital, (3) notary files entry in the Commercial Register, (4) register the trade with the local trade office (Gewerbeanmeldung, fee ~€20–60), (5) register with the tax office via ELSTER and obtain tax/VAT numbers. Forming a GmbH typically takes several weeks.

EU/EEA/Swiss nationals enjoy freedom of establishment. Non-EU nationals who will actively manage the business generally need a residence permit for self-employment under Section 21 AufenthG, requiring a business plan demonstrating economic benefit; pure (non-managing) shareholders typically do not need a permit. This adds weeks to months.

Foreign investments are screened by the BMWE under the AWG/AWV on national-security/public-order grounds. Most sectors are not pre-notifiable, but cross-sectoral review can apply to non-EU acquisitions of ≥25% voting rights, and ≥10% for critical infrastructure and certain technologies; defence/security acquisitions ≥10% are mandatorily notifiable.