GmbH Formation Germany 2025
Form a GmbH in Germany: Share capital from €25,000 (GmbH) or €1 (UG). Notarization, commercial register, trade registration. Formation in 2-4 weeks. Free consultation.
In summary: GmbH formation in Germany: Share capital €25,000 (min. €12,500 to be paid), formation costs €1,500-3,000, timeline 2-4 weeks. Alternative: UG from €1 share capital with mandatory reserves. Notarization required. Foreigners can form without restrictions.
Company Types in Germany
Germany offers various legal forms for entrepreneurs and investors. The most popular corporations are the GmbH (limited liability company), the UG (haftungsbeschränkt), and the AG (stock corporation).
GmbH - Gesellschaft mit beschränkter Haftung
The GmbH is the most popular legal form in Germany with over 1.2 million companies. It offers liability limited to company assets and is suitable for SMEs as well as subsidiaries of international corporations.
| Feature | Details |
|---|---|
| Share Capital | €25,000 (min. €12,500 at formation) |
| Shareholders | 1 to unlimited |
| Liability | Limited to company assets |
| Shares | Transfer requires notarization |
| Bodies | Managing Director + Shareholders' Meeting |
| Formation | Notarization required |
| Commercial Register | Entry in HRB mandatory |
UG (haftungsbeschränkt) - Entrepreneurial Company
Introduced in 2008, the UG is a special form of GmbH with reduced share capital. It is particularly suitable for startups and founders with limited initial capital.
| Feature | Details |
|---|---|
| Share Capital | From €1 (typical: €1,000-5,000) |
| Mandatory Reserves | 25% of annual profit until €25,000 |
| Company Name | Must include "UG (haftungsbeschränkt)" |
| Contributions in Kind | Not permitted, cash only |
| Conversion | To GmbH when reaching €25,000 |
AG - Aktiengesellschaft (Stock Corporation)
The AG is intended for larger companies, especially those planning an IPO or seeking to raise equity on capital markets.
| Feature | Details |
|---|---|
| Share Capital | €50,000 (min. 25% paid in) |
| Shareholders | From 1 (at formation) |
| Bodies | Board + Supervisory Board + General Meeting |
| Shares | Freely transferable (registered or bearer) |
| Stock Exchange | Listing possible |
GmbH Formation Process
Step 1: Preparation
- Choose company name (check availability with IHK)
- Determine share capital (min. €25,000)
- Define business purpose
- Draft articles of association (or use template protocol)
- Appoint managing director(s)
Step 2: Notarization
- Notarization of articles of association
- Appointment of managing director
- Creation of shareholder list
- Notary files documents with commercial register
Step 3: Capital Contribution
- Open business account (GmbH i.G.)
- Deposit at least €12,500 (half of share capital)
- Bank certificate confirming deposit
Step 4: Commercial Register Entry
- Review by registry court
- Entry in Commercial Register Section B (HRB)
- Upon entry: GmbH has full legal capacity
Step 5: Post-Formation
- Trade registration with local authority
- Tax registration questionnaire for tax office
- Registration with IHK/HWK (automatic)
- Registration with employers' liability insurance if applicable
- Apply for VAT ID if needed
Formation Costs Comparison
| Item | GmbH | UG | AG |
|---|---|---|---|
| Notary Fees | €500-1,000 | €300-500 | €2,000-5,000 |
| Commercial Register | ~€150 | ~€150 | ~€300 |
| Trade Registration | €15-65 | €15-65 | €15-65 |
| Legal Fees (optional) | €500-2,000 | €300-1,000 | €2,000-10,000 |
| Minimum Capital | €25,000 | €1 | €50,000 |
| To be paid at formation | €12,500 | €1 | €12,500 |
Tax Aspects
German corporations are subject to the following taxes:
| Tax Type | Rate | Note |
|---|---|---|
| Corporate Tax | 15% | Uniform nationwide |
| Solidarity Surcharge | 5.5% on corp. tax | = 0.825% effective |
| Trade Tax | 7-17% | Depends on municipality |
| Effective Total Burden | ~30% | Typical in major cities |
Advantages of a GmbH in Germany
- Limited Liability: Personal assets of shareholders are protected
- Credibility: High acceptance with banks, customers, and suppliers
- Flexibility: Free design of articles of association
- Largest EU Market: Access to 83 million consumers
- Tax Benefits: 95% dividend exemption for holding structures
- EU Freedom of Establishment: Europe-wide business activity possible
- Succession Planning: Simple transfer of shares
GmbH vs. UG - The Right Choice
Choose a GmbH if:
- You have sufficient starting capital (€25,000)
- Maximum credibility is important (banks, investors, B2B)
- You want to contribute assets in kind
- International activity is planned
Choose a UG if:
- Starting capital is limited
- You want to test a business idea
- The company should become a GmbH later
- Low formation costs are a priority
Frequently Asked Questions
Formation costs range from €1,500 to €3,000. This includes notary fees (€500-1,000), commercial register fees (€150), trade registration (€15-65), and optional legal fees. Additionally, you need minimum share capital of €25,000, of which €12,500 must be paid upon formation.
Using a standard charter (Musterprotokoll), formation takes 2-4 weeks: notary appointment (1 day), commercial register entry (1-3 weeks), trade registration (1-2 days). Express formations are possible within a few days.
The UG (haftungsbeschränkt) is a "mini-GmbH" with minimum share capital of just €1. However, a UG must retain 25% of annual profits until reaching €25,000. The GmbH enjoys higher reputation with banks and business partners.
Yes, foreigners can form a GmbH without restrictions. EU citizens need no special permits. Non-EU citizens can be shareholders; as managing directors they may need a residence permit with work authorization.
Yes, every GmbH needs at least one managing director (Geschäftsführer). This must be a natural person with no disqualifying criminal convictions. The managing director does not need to reside in Germany but must be reachable.
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