As well as being a simple process, registering a UK limited company in Germany is ideal for various reasons. Being the largest economy in Europe, and constituting 21% of the European GDP, it is the best European country in which to do business. And when you consider that German export levels in 2019 reached EUR 1.3 trillion, deciding to register your United Kingdom based company in Germany should be an easy one. So, if you are looking for the key options for fast and easy company registration in Germany, you have reached the right place. This article covers your three main choices for registering a German entity. As well as company branches, we have covered all you need to know about subsidiary GmbH and UGs.
Registering a dependent branch in Germany
Also referred to as a foreign company extension in Germany, registering a dependent branch is a suitable company registration option for a range of UK businesses. It is also a fast and simple process. The branch you register will not be a German legal entity, which means that your UK-based company office will take responsibility for its operations and actions. When registering your UK business’ dependent branch in Germany, keep in mind that the company name will have to match the UK office name. The following steps are required to register a dependent branch in Germany.
- Make an application to reserve your company trading name. This usually is the same as the UK main office name, but can have a suffix such as ‘Niederlassung Deutschland’, which means Branch Germany.
- Gather the documents required for incorporation and company registration. The documents that will be required include, but are not limited to, verification of your UK business’ existence in the UK, the address and name of the company, the names of the company directors and the business branch address.
- Initiate the process of incorporating your branch in the trade office register (Gewerbeamt). You will need to register the branch before carrying out any operations. This is specifically for declaration purposes.
- Get your business tax identification number and German VAT number. This is a requirement for branch offices in Germany for tax purposes.
- Get your business license to start operating as a German entity.
Registering as an independent branch in Germany
Independent branches are part of your main UK office and their operations are generally carried out under the laws of the main, head office. But even though independent branches are governed by the UK main office, their business transactions and trading operations can be carried out independently. This means that how the independent branch relates to its customers will follow German laws. To set up a company as a German entity you will need to:
- Reserve your company trading name – which might be the same as the head office, but might be different. The trading name should reflect the status of the business with an appropriate suffix.
- Get a business registration certificate and then register the independent branch in the commercial register (Handelsregister) before carrying out any business operations. This is for declaration purposes and a notary is required to apply.
- Get your tax identification number. Independent branch taxation applies if the branch is a permanent establishment under the DTA (double taxation agreement).
Creating a subsidiary company in Germany
Establishing a subsidiary is the ideal and favoured choice to achieve company registration in Germany as a foreigner. This is because your business will be an independent company that will be able to operate fully under German laws. In other words, if you set up a company as a subsidiary in Germany you will find that there are fewer obstacles because legal constraints do not apply to setting up your company. Here is how you can set up a company as a subsidiary GmbH or UG in Germany.
1. Start by getting a German business domiciliation and then choose the correct legal form for your business.
There are a few legal forms available, two of which are the Gesellschaft mit beschränkter Haftung (GmbH) and the Unternehmergesellschaft (UG). Though both of these forms are limited liability companies and have no limitations on the operations of the company, a UG has lower share capital than the GmbH.
2. Register your company name at the commercial register
This process will involve verifying whether your chosen company name hasn’t already been taken by checking the business register (Unternehmensregister) for the company names that already exist.
3. Create a business bank account
Depending on the bank you choose, you can set up a business bank account online. This means that you can create one from abroad. Proof of identity will be required, and you will also need to provide evidence that you reside in Germany.
4. Prepare the required documents
You will now need to prepare and provide the documents for your business. As well as a tax declaration to the tax office (Finanzamt), you will also need to prepare:
- A labour office declaration when hiring employees
- A social security declaration
- A business licence submission to the commercial office (Gewerbeamt), and
- A professional chamber registration for the corresponding chamber of industry
Setting up a company in Germany: the key points
To set up a company in Germany, remember that there are three main ways to start doing business. These are:
- The dependent branch
- The independent branch, and
- The subsidiary
Also, keep in mind that company registration with either the commercial register or the local trade office is required before starting any business operations. It’s also recommended that you gather the required documents quickly and efficiently to ensure the process runs smoothly. Set up a company in Germany and begin doing business to reap a whole range of benefits.