How to Acquire a Shelf Company in Germany?: Benefits & Costs

Today’s business world is unrelentingly dynamic, opportunities appear overnight, and one must act instantly. To save time and emerge in the prosperous German market, a number of foreign entrepreneurs want to set up businesses in Germany seamlessly. If you are one of those people who wish to access this bloom bonanza while rapidly running out of time, a German shelf company could give you the solution. A shelf company, being also a readymade company, or pre-registered company, is a swift and efficient legal entity which have already been established and registered with the German Trade Register. In other words, with a shelf company, one can entirely escape the lengthy incorporation routine and legally unfold his business right away.

This article serves as your comprehensive guide, illuminating the process, benefits, costs, and considerations of acquiring a shelf company in Germany

Benefits of Using a Shelf Company in Germany

• Time-saving: The incorporation of a shelf company requires only a few days compared to the usual procedure of establishing a company, which would have taken several weeks on its own. Given the fact that time is of the essence to business, this type of company can give a head start in the market of Germany. 
• Credibility: Since shelf companies already have a registration history, it creates a picture of credibility. For clients and partners, who may not be entirely familiar with the company, this may be beneficial.
• Simplified Bank Account Opening: Securing a corporate bank account in Germany can be a challenge for newly registered companies. Shelf companies often come with existing bank accounts, streamlining the process and ensuring you have a functional financial infrastructure from the outset.
• Flexibility and Customization: Upon acquiring a shelf company, you have complete control over its direction. You can modify the company name, appoint new directors, and define the scope of its business activities, tailoring it to your specific needs and vision.
• Reduced Risk of Delays: The company registration process in Germany can be subject to unforeseen delays due to missing paperwork or administrative hurdles. By choosing a shelf company, you bypass this potential roadblock and ensure a smoother launch for your business.

Shelf Company vs. New Company Registration: Which One to Choose?

While both options offer a path to German business ownership, the ideal choice depends on your specific requirements and priorities.

Here’s a breakdown to help you decide:

Choose a Shelf Company if:

• Speed is crucial, and you want to be operational as quickly as possible.
• You don’t require a unique company name and are comfortable modifying an existing one.
• Establishing immediate credibility with clients and partners is a priority.
• You’d prefer to avoid potential delays associated with new company registration.

Opt for New Company Registration if:

• You require a highly customized company name that reflects your brand identity.
• The company structure of a shelf company doesn’t align with your business model.
• You plan to conduct business activities that differ significantly from the pre-defined scope of existing shelf companies.

Step-by-Step Guide to Setting Up a Shelf Company in Germany

Research and Selection 

Find trustworthy organizations or suppliers who provide shelf companies in Germany. Make sure the business is legitimate and compliant with laws by doing your research.

You can get in touch with our experts from OnDemand International to acquire a shelf company in Germany.

Select a Business

Pick a shelf company that fits your company’s objectives while taking its location, industry, and current organizational structure into account.

Documentation

In order to speed up the transfer of ownership, provide the identity and supporting paperwork that the seller requests.

Transfer Process 

Complete the transfer process according to German legal requirements, including notarization and registration with the Commercial Register (Handelsregister).

Compliance and Amendments 

Ensure compliance with German laws and regulations, and make any necessary amendments to company details, such as name or registered address.

Commence Operations  

With ownership transferred, you can now commence business activities under the acquired shelf company.

Documents Required to Purchase a Shelf Company in Germany

• Identification: Passport copies or identification documents of the prospective owners.
• Proof of Address: Proof of residence for each director and shareholder.
• Company Resolution: Authorizing the purchase of the shelf company.
• Declaration of Beneficial Ownership: Providing information on the company’s ultimate beneficial owners.
• Notarized Power of Attorney: If representing a corporate entity, a notarized power of attorney may be required.

Costs Associated with Buying a Shelf Company in Germany

The costs of acquiring a shelf company in Germany vary depending on factors such as the company’s age, structure, and additional services provided by the seller.

Typically, expenses may include:

• Purchase Price: The initial outlay for purchasing the shelf company, which varies according to the company’s age, repute, and history.
• Legal Fees: The cost of notarization, document drafting, and legal consultations.
• Extra Services: There may be additional fees for optional services like nominee directorship, virtual office space, or help with post-acquisition compliance.

Crucial Things to Take Into Account Before Purchasing a German Shelf Company

• Legal Compliance: Ensure the shelf company complies with all German laws and regulations, including tax obligations, before finalizing the purchase.
• Financial Due Diligence: Conduct thorough financial due diligence to assess the company’s financial health, potential liabilities, and any legal disputes.
• Future Expansion: Evaluate the scalability and suitability of the shelf company for your long-term business goals and expansion plans.
• Tax Implications: Consider the tax implications of acquiring a shelf company, including corporate taxes, value-added tax (VAT), and potential tax incentives.

Tax Implications of Owning a Shelf Company in Germany

Acquiring a shelf company in Germany can have various tax implications, including:

• Corporate Income Tax: Shelf companies are subject to corporate income tax on their profits at the standard rate of 15% plus a solidarity surcharge.
• Value Added Tax (VAT): Companies engaged in taxable transactions may be required to register for VAT purposes and charge VAT on their sales at the prevailing rates.
• Withholding Tax: Dividends distributed by the shelf company may be subject to withholding tax unless exempted under tax treaties or EU directives.
• Transfer Pricing Rules: Transactions between the shelf company and related parties are subject to transfer pricing regulations to prevent tax evasion or avoidance.

Conclusion

For foreign entrepreneurs and investors seeking a swift and efficient entry into the German market, acquiring a shelf company presents a compelling option. With its built-in benefits—such as speed, legitimacy, and ease of obtaining a bank account—a shelf company may jumpstart your firm and help it succeed.

With years of experience, OnDemand International specialists have helped several companies register and access the German market. We offer comprehensive shelf company acquisition services, ensuring a smooth and efficient process. Our team of professionals will assist you with every stage, from choosing the best shelf company to completing the ownership transfer and handling the paperwork.

Contact OnDemand International today to discuss your German business aspirations and explore how our shelf company acquisition services can help you turn your vision into reality.