Germany is the best place for entrepreneurs to set up a business in Europe. It is centrally located on the European continent, which provides opportunities for business development as well as networking opportunities across the continent.
Germany is easily accessible to all European countries via different transport modes and is considered to be the best choice for international business owners. If you are planning to set up a company in Germany, you must take into consideration the company registration cost in Germany & additional fees for establishment.
Eventually, the costs of starting a business in Germany can vary depending on the legal form chosen and the business idea. However, prices range from €2,000 to €3,000 on average for registering a company. Though, there are other expenses to be considered for registering a company in Germany.
Through this article, we will be talking about the company registration cost in Germany. So, without any additional worry, let’s hop into it.
Different Elements That Impact Company Registration Cost in Germany
Here’s a look at the different costs involved in setting up a business.
The cost to register a company in Germany can vary based on several crucial factors that entrepreneurs should carefully consider before setting up a business. These include the type of business structure, the number of shareholders, and whether or not professional services are used during the incorporation process.
One of the most common types of business entities in Germany is the limited liability company (GmbH). Establishing a GmbH typically involves more legal formalities and higher registration fees compared to simpler structures like sole proprietorships or partnerships. On average, the cost of registering a GmbH in Germany is between €4,000 and €5,000. This amount generally covers notary fees, commercial register fees, and the charges associated with using company formation services.
It’s important to note that the final cost may also increase depending on the number of shareholders, as more shareholders can result in additional administrative and legal procedures.
In addition to the upfront company formation costs, there are also ongoing operational expenses associated with running a business in Germany. These include accounting and bookkeeping fees, tax filings, legal consultancy charges, and business insurance. Therefore, it is advisable to plan your finances accordingly and consider both initial and recurring costs when budgeting for your business setup.
You can contact our German business experts to register your business in the growing economy of Germany.
Company Registration Cost in Germany for Various Business Structures
It is important to know the cost involved in incorporating the different types of business structures before registering a company.
These are some examples of business structures and their associated costs.
Limited Liability Company (GmbH)
An investor can establish a limited liability company in Germany with a minimum capital of 25,000 EUR. The stakes of the limited liability corporation cannot be sent to others and can’t be enrolled on the Stock Market.
German Joint Stock Company (AG)
Vast industries will benefit from the German joint stock company. The least capital expected to form a German joint stock company is 50,000 EUR. Members of the company will be held responsible for their actions, and company shares can be freely registered on the Stock Market.
German Limited Partnership
A German limited partnership is a relationship between 2 or additional people who approve to function jointly in a mutually beneficial way. You need at least two partners to be eligible. You can have two types of partners depending on your liability.
The general partner is the one with unlimited liability and can be held liable for all of his/her assets. The limited partner is another type, with a liability that only covers his/her nominal holdings within the partnership company.
Sole Trader
It is easy to form a sole trader in Germany and all that is required is one person to set it up with their assets. The sole trader is still liable for all losses and individual income tax rates apply to the profits of sole traders.
Branch Office
Setting up a branch office in Germany is a popular way for overseas investors to get into the German market. Foreign investors need to register only with the local commercial register and the local trade office to set up a branch.
It is not a legal entity, but its assets and liabilities are owned by the parent company. The entire responsibility for tax and legal matters will remain with the parent company.
Additional Company Registration Cost in Germany
Apart from the primary registration fees, here are some additional expenses you may incur while setting up a company in Germany:
- Trade Registration Fees: Vary depending on the location (city or region) where your business is being registered.
- Commercial Register Entry: Not mandatory for all legal structures. The cost is determined by the type and value of the company.
- Virtual Office Costs: If you don’t have a physical office, a virtual office can cost around €191 per month, based on the provider and location.
- Accounting Fees: Basic accounting services for German businesses typically start from €100 per month and may increase depending on complexity and volume.
- Notary and Legal Fees: While not mandatory for all business types, they are highly recommended, especially for GmbH and AG structures.
- Tax Advisor Services: Especially important for non-German companies. Tax advisors assist with VAT filings, annual accounts, and compliance, and their fees vary based on services rendered.
Conclusion
The company registration cost in Germany can vary depending on the type of company, the number of shareholders, and the services being used. However, the average cost is around €2,000 to €3,000, which includes notary fees, commercial register fees, and company formation services.
Additionally, there are ongoing costs associated with running a company in Germany, including taxes, accounting and legal fees, and insurance.
If you have any questions or have queries about the company registration cost in Germany and would like to understand further, you can call for an appointment with us. OnDemand International experts would provide you with all the necessary information and also help you in setting up your business in Germany.
FAQ’s
Although the GmbH requires a minimum capital of 25,000 Euros, each shareholder only needs 1 Euro to start a UG.
Corporation tax is levied at 15% uniform and subject to an additional 5.5% surcharge.
The cost of registering a company in Germany is approximately 4000 to 5000 euros based on your business services.
The German government is open to all kinds of business establishments, regardless of whether it involves a German national or a foreigner.
