Why Setting up a German GmBH is expensive?

Setting up a German GmBH is expensive as it can involve various costs like capital requirements, translation costs, costs associated with opening bank account, etc.


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    Setting up a German GmbH (Gesellschaft mit beschränkter Haftung) can indeed involve various costs and expenses. A GmbH is a popular legal form of business in Germany, known for its limited liability protection for shareholders. This article will provide you information regarding expenses involved in setting up a GmbH and Why Netherlands is a next best choice for you to company setup in the Europe. You will know about the advantages of company setup in the Netherlands.

    The expenses involved in setting up a GmbH may include the following:

    is setting up a german gmbh expensive
    • Minimum Share Capital: A GmbH in Germany requires a minimum share capital of €25,000. This amount needs to be deposited in a bank account before the company registration process can proceed.
    • Cost Compliance: There are various compliance costs associated with establishing a GmbH. These include notary fees for drafting the articles of association and the company’s registration with the local commercial register (Handelsregister), which also involves paying registration fees.
    • Annual Running Costs: Once the GmbH is established, there are ongoing expenses to consider. These can include accounting and bookkeeping fees, tax compliance costs, audit fees (if required), and other legal and administrative expenses, which can amount to around €2,000 per year.
    • Local Director Requirement: Germany has strict regulations regarding company directors. At least one director (Geschäftsführer) must have a registered address in Germany. This requirement can add complexity and cost, especially if a nominee director service is used.
    • Bank Account Opening: Opening a business bank account can be challenging, particularly for non-residents or foreign-owned companies. Banks often require extensive documentation and may charge additional fees for non-resident accounts.
    • Translation Costs: If any documents need to be translated into German for registration purposes, translation fees may be incurred.
    • Publication Costs: GmbHs are required to publish certain information in the German Federal Gazette (Bundesanzeiger), which involves additional costs.
    • Business Certificates and Licenses: Business owners should research the specific licenses and permits required for their industry before starting up, as these can add to the initial costs.

    Why Netherlands is a next best choice for you to set up a company in the Europe?

    FeatureNetherlands B.V.Germany GmbH
    Capital requirements €1€25,000
    Cost compliancesLowerHigher
    Local directorsNot requiredRequired
    Bank accountCan be opened in any countryMust be opened in Germany
    Tax rateFlat 20%Progressive tax rates up to 45%
    FlexibilityMore flexibleLess flexible
    Annual company costsLowerHigher

    The Netherlands will be your best choice for Setting up a company in Europe

    list of advantages for company setup in the netherlands

    List of Advantages for company setup in the Netherlands

    Capital Requirement:

    The minimum capital requirement for setting up a private limited liability company (BV) in the Netherlands is relatively low compared to some other countries, at 1 euro, which can facilitate easier entry into the market.

    Cost Compliances:

    The compliance costs in the Netherlands are reasonable and predictable, as the country has clear regulations and procedures for businesses to follow.

    Annual Company Cost:

    While there are annual costs associated with maintaining a company in the Netherlands, they are generally considered reasonable in relation to the benefits of operating in the country.

    Local Directors:

    The Netherlands does not require companies to have local directors, which can be advantageous for foreign entrepreneurs looking to establish a business in the country without the need for local representation.

    Bank Account:

    Opening a bank account in the Netherlands is relatively straightforward, and the country’s strong financial sector offers a wide range of banking services to businesses.


    While both the Netherlands and Germany offer unique advantages for business setup, the Netherlands’ more lenient capital requirements, lower cost compliances, reduced annual company costs, flexibility in director appointments, and smoother bank account opening process make it an attractive choice for many entrepreneurs and companies. However, it’s crucial to carefully assess individual business needs, long-term objectives, and other relevant factors before making a final decision. Seeking professional advice and conducting thorough research can help businesses make an informed choice that aligns with their specific goals and requirements.


    The Netherlands offers a business-friendly environment with favorable tax policies, access to a skilled workforce, and strategic location advantages, making it an attractive option for international entrepreneurs.

    While both countries have compliance costs, the Netherlands is often perceived to have more transparent and predictable compliance requirements, making it potentially more cost-effective for businesses.

    Yes, the Netherlands does not require companies to have local directors, providing more flexibility for international entrepreneurs compared to Germany’s GmbH, which mandates the appointment of a local director.

    The Netherlands’ economy is known for its stability and diversity, with a focus on various industries, including technology and innovation, which can be advantageous for companies seeking growth opportunities.