NewsCase StudiesEvents

Which is the best legal structure when entering the German market?

Also in the news...

Foreign travel advice Georgia

Warnings and insurance Still current at: 16 May 2024 Updated: 16 May 2024 Latest update: Information on the political situation across Georgia ('Safety and security' page).

How to market and package ecommerce products for maximum impact

To market and package your ecommerce products for maximum impact, start by understanding your target audience's demographics, passions, and daily struggles. Tailor your product descriptions and packaging to resonate with their identity, making them feel like part of a community.

Foreign travel advice Norway

Warnings and insurance Still current at: 13 May 2024 Updated: 13 May 2024 Latest update: This travel advice was reviewed for style and accuracy.

Guidance Living in Austria

Information for British citizens moving to or living in Austria, including guidance on residency, healthcare and driving.

Foreign travel advice Sweden

Warnings and insurance Still current at: 13 May 2024 Updated: 13 May 2024 Latest update: Removal of information about Eurovision Song Contest ('Warnings and insurance' and 'Safety and security' pages).

Which is the best legal structure when entering the German market?

Back to News

Germany is an attractive location, which can be gauged from one figure: 1,124 projects - never before have foreign companies invested so much. In 2017, the amount of net direct investments amounted to around 70 billion Euros, a record figure. According to the EY ("Europe Attractiveness Survey 2018"), there are various reasons for this: qualified specialists, a good infrastructure, a stable legal and political environment.

One topic is particularly crucial when it comes to entering the German market: the choice of the appropriate legal form. Why is that? If you choose the wrong legal form, you might have higher costs and possibly higher risks.

You should precisely analyse in advance which legal form is most suitable for your entrepreneurial activity.

The Federal Ministry of Economic Affairs and Energy lists twelve aspects which should be considered when choosing a legal form:

  1. Entrepreneurial independence
  2. Formalities
  3. Liability
  4. Taxes
  5. Image
  6. Accounting
  7. Duty of public disclosure
  8. Obligation to carry out audits
  9. Minimum capital
  10. Start-up costs
  11. Capital procurement
  12. Entry in the commercial register

The expansion into Germany can also be effected by means of a domestic subsidiary, a branch office, a permanent establishment or by a representative office.

The legal forms can be divided into three categories: partnerships, corporations and other legal forms.

A limited liability company (GmbH) is the most frequently chosen legal form. An alternative can be the ‘Unternehmensgesellschaft’ (UG) which is also referred to as "Mini-GmbH".

BASCH Consult

Berlin, Germany

info@basch-consult.de

www.basch-consult.com


You are not logged in!

Please login or register to ask our experts a question.

Login now or register.