Lee & Schwerbrock
German Law Firm
Establishment of German Limited Company (GmbH) ~ Step by Step
“GmbH”, a company with limited liability, is the most frequently adopted company form in Germany. The minimum capital amount of a GmbH is 25,000 Euro. Our firm is experienced and provides full-service to assist our clients in establishing a GmbH in the desired German city.
Our charge and services for establishing a GmbH is as follows:
Our services: we charge a flat fee for the following services.
Ø Conduct company name availability search
Ø Prepare standard Articles of Association (Shareholders’ Agreement) of the GmbH (English and German version)
Ø Prepare standard minutes of the first shareholders’ meeting (regarding: a. GmbH establishment and b. appointment of managing directors）（English and German version）
Ø Prepare relevant Power of Attorneys（English and German version）
Ø Engage appropriate public notary handling notarization of the Articles of Association and related GmbH registration documents（this is compulsory required according to German law）
Ø Prepare GmbH registration application document, assist GmbH managing director in said application before the public notary（According to German practice, the managing director MUST present personally and our firm member may accompany the managing director for this matter, provided that relevant costs for traveling outside of Hamburg city shall be born by the client）
Ø Assist the new GmbH in filing business registration
Ø Assist the new GmbH in relevant filling or notification to local commercial, tax, or labor authorities.
Ø Provide consulting service regarding rights, obligations and liabilities of a GmbH.
Additional service: the following additional services are charged on hourly basis.
Ø Revise standard Articles of Association to meet the client’s special needs
Ø Assist the client in opening a bank account for the new company in Germany
Ø Prepare relevant employment agreement
Ø Assist in applying for work permit
Ø Review and draft contracts (purchase, lease contracts etc.）
Ø Other legal consulting services
Estimated establishment time
Normally, it takes about 3-4 months to complete all the steps in establishing a GmbH; however, this is also depending on the efficiency of related government authorities, both in the client’s own country and in Germany
Ø Client prepares required documents and completes relevant notarization and legalization: 2 - 4 weeks
Ø Hold the first shareholders’ meeting, engage German public notary and complete notarization of the new GmbH’s Articles of Association (our firm may handle these matters on behalf of the client): 1-2 weeks
The new company may now act under its name, but only as a “GmbH under establishment” and it may not yet enjoy limited liability.
Ø The managing director of the new GmbH shall open a company bank account in Germany, and shareholder shall remit company capital into this bank account: 1 week
Ø Apply with competent authority for company registration and publication: 1-3 months
Company establishment procedure is now completed, the GmbH enjoys limited liability.
Ø Relevant filling or notification to local commercial, tax, or labor authorities.
Qualification of managing director of a GmbH
Managing director is the representative of a GmbH. Generally, managing director can be a natural person without domicile in Germany (for example, someone dispatched to Germany from the foreign mother company). However, in certain areas, such as Aachen and other smaller cities with conservative foreign investment policies), there are court precedents showing that some foreign managing directors without German domicile were rejected.
Residence / working visa
Establishing a German company does not automatically ensure that the shareholders or managing directors can obtain German residence or working visa (although in some cities, such as Hamburg, this is less problematic). The issuing of visa belongs to another government authority’s discretion, which authority is different from the authority for company establishment. In determining whether residence or working visa shall be issued, the competent authority will consider whether this investment is advantageous to German economy, whether the applicant is irreplaceable for the new established company and other related matters. Thus, establishing a German company for purpose of obtaining residence or working visa is not advisable.
Above are the general requirement and procedure for establishing a GmbH in Germany; however, there may be slightly different practice in different federal states. In principle, in bigger cities (such as Hamburg) where foreign investment is encouraged, the competent authorities would be less picky then those in smaller, un-international cities.
©2009. All rights reserved. Information contained in this website is for reference purpose only and is not intended to constitute legal advise on specific matters. Should there be any specific legal issue, please consult with our attorneys.