“LLC” is an American label, and Germany has no entity by that name. Founders searching for LLC company registration in Germany almost always want a GmbH or a UG, both limited liability companies under one statute. This guide gives the verdict, the costs, the timeline, and the remote-formation route, each figure sourced to primary law.
Is There Really an LLC in Germany?
No. “LLC” (limited liability company) is not a German legal form. Searchers mean the GmbH (Gesellschaft mit beschränkter Haftung) or the UG (haftungsbeschränkt), both governed by the GmbH Act (GmbHG). The low-capital UG arrived with the MoMiG reform (the 2008 GmbH modernization act), effective November 1, 2008.
The GmbH is the default equivalent of a US LLC or a UK Ltd. Its rules sit in the GmbHG published by Germany’s Federal Ministry of Justice. A German entity also opens the EU single market of over 450 million consumers (Eurostat population data). Getting the terminology right matters, because the GmbH and the UG carry different capital rules from the first day.
GmbH vs UG: Which German LLC Should You Form?
Form a GmbH if you have funding and want credibility with banks and suppliers. Form a UG if you are bootstrapping and want to start small, then convert later. The GmbH needs €25,000 in share capital; the UG can start at €1. Everything else about liability protection is the same.
| Feature | GmbH | UG (haftungsbeschränkt) | Source |
|---|---|---|---|
| Minimum share capital | €25,000 | €1 | GmbHG §5 / §5a |
| Paid in before registration | €12,500 (half) | Full amount, in cash | GmbHG §7 / §5a |
| In-kind contributions (Sacheinlagen) | Allowed | Prohibited | GmbHG §5a |
| Mandatory profit reserve | None | 25% of annual net profit until €25,000 | GmbHG §5a(3) |
| Musterprotokoll eligibility | Up to 3 shareholders, 1 director | Same | GmbHG (Musterprotokoll annex) |
| Name suffix | “GmbH” | “UG (haftungsbeschränkt)”, written in full | GmbHG §5a(1) |
| Conversion path | Not applicable | Convert to GmbH once reserves reach €25,000 | GmbHG §5a(5) |
| Credibility with banks/suppliers | High | Lower (undercapitalization signal) | Practitioner consensus |
The capital and reserve rules above come directly from §5a GmbHG on the Federal Ministry of Justice portal.
Can You Really Start a UG With 1 Euro?
Legally yes, practically no. Under GmbHG §5a, a UG can form with €1 of share capital. That €1 company is insolvent the moment the first notary invoice lands. Practitioners recommend €500 to €1,000 or more in starting capital to cover formation and early costs.
The UG carries a built-in savings mechanism. GmbHG §5a(3) forces it to retain 25% of each year’s net profit in a statutory reserve until the reserve plus capital reaches €25,000. That reserve is usable only to cover losses or to increase capital, which is how a UG grows toward full GmbH status.
Can Foreigners Register an LLC in Germany?
Yes. Germany allows 100% foreign ownership with no local co-founder. Both natural persons and legal entities, including a foreign parent company, can hold shares. Shareholders never need German residence or a visa. That residence question is often confused with the managing director role, which is separate and covered next.
What Are the Managing Director Requirements in Germany?
At least one managing director (Geschäftsführer) is mandatory, and directors may be foreign or German, with no cap on their number. A non-EU national does not need a German residence permit merely to be appointed director from abroad, per the prevailing court view. The §21 AufenthG (Residence Act) self-employment permit applies only if the founder relocates to Germany to run the business. Because this is fact-sensitive, get case-specific advice for your situation.
Do You Need a Registered Office in Germany?
Yes. Every GmbH and UG needs a German registered business address recorded in the Handelsregister (commercial register). A virtual office is permitted if it provides genuine mail handling and the company can actually be reached there. A lease or office rental contract serves as proof of the address.
Can You Register a GmbH Remotely From Abroad?
Yes, by two routes. Since August 1, 2022, the DiRUG (Digitalisation Directive Implementation Act) allows online formation through the Bundesnotarkammer (Federal Chamber of Notaries, BNotK) video notarization system. The classic alternative is a notarized, apostilled power of attorney (PoA) signed abroad and executed by a proxy before a German notary.
GmbHG §2(3) permits video-conference notarization for cash formations. A follow-up law extended it to in-kind formations from August 1, 2023, though real estate and existing-share contributions still require in-person notarization, per the Bundesnotarkammer’s online-procedures notice. The catch is identity: video notarization needs an electronic ID (eID) compatible with the system, meaning a German eID or an eIDAS-notified EU eID. Most non-EU founders lack one, so their practical workaround is the apostilled PoA proxy route or one trip to Germany.
What Is the Step-by-Step Process to Register a GmbH?
Register a GmbH in ten steps: clear the name, draft articles, notarize the deed, deposit capital, file with the Handelsregister, get registered, then complete trade, tax, transparency, and social filings. The notary and the register do the heavy lifting. Below is the full sequence with the authority for each step.
- Check the company name with the local Chamber of Industry and Commerce (IHK) to avoid rejection; the Commenda company name checker is a fast first pass.
- Draft the articles of association, using the Musterprotokoll or custom articles (covered below).
- Sign the notarial deed before a German notary and appoint the managing director(s).
- Open a bank account and deposit the capital (€12,500+ for a GmbH, the full amount for a UG); the bank issues a deposit confirmation.
- The notary files the documents electronically with the Handelsregister.
- The Handelsregister entry gives the company legal personality.
- File the Gewerbeanmeldung (trade registration) at the Gewerbeamt (trade office); budget €20 to €60 and a few days.
- Register for tax at the Finanzamt (tax office) via ELSTER to get a Steuernummer and, where needed, a VAT ID.
- File beneficial owners with the Transparenzregister (around €20 per year; fines apply if skipped).
- Register for social insurance if you plan to hire.
What Is a GmbH i.G. and Who Is Liable Before Registration?
Between the notarial deed and the Handelsregister entry, the company exists only as a GmbH in Gründung (i.G.), a pre-company. Anyone who acts for it in that window carries personal liability (Handelndenhaftung). The liability shield attaches only when the register entry closes the window. Do not sign contracts or trade before registration.
Musterprotokoll or Custom Articles: Which Should You Use?
Use the Musterprotokoll, a statutory model protocol, for simple cash formations with up to three shareholders and one managing director; it cuts notary cost and drafting time. Use custom articles (a lawyer-drafted Gesellschaftsvertrag) when you need multiple directors, in-kind contributions, vesting, or bespoke governance.
| Route | Eligibility | Cost | When to choose |
|---|---|---|---|
| Musterprotokoll | Cash formation, up to 3 shareholders, 1 director | Lower notary and drafting cost | Simple, standard setups |
| Custom articles (Gesellschaftsvertrag) | No shareholder or director cap | Higher (lawyer + higher notary value) | Multiple directors, Sacheinlagen, vesting, tailored governance |
Special Cases: Sole Founder, In-Kind Contributions, and Licensed Sectors
How Does Formation Differ for a Sole Founder?
A one-person GmbH or UG (Ein-Personen-GmbH) is fully permitted. The sole founder can be the only shareholder and the only managing director, and stays Musterprotokoll-eligible. Record sole-shareholder resolutions in writing, because single-member companies carry documentation duties that a court can later review.
Can You Contribute Assets Instead of Cash (Sacheinlagen)?
Only a GmbH may be formed with assets instead of cash (Sacheinlagen); a UG must be funded fully in cash, per GmbHG §5a. Equipment, intellectual property, shares, and receivables can qualify. A valuation report (Sachgründungsbericht) is required, and overvaluation exposes shareholders to difference liability for the shortfall.
Which Business Activities Need a License Before Registration?
Regulated activities need a permit on top of registration. Financial services need authorization from BaFin (the Federal Financial Supervisory Authority), crafts need entry in the Handwerkskammer roll, and food service needs a Gaststättenerlaubnis. Healthcare, transport, and security also require sector permits. Apply at the competent authority; the Gewerbeamt flags licensable trades. Timelines and fees vary by sector.
When Should a UG Convert to a GmbH?
Convert once reserves plus capital reach €25,000. The conversion is a capital increase from the UG’s statutory reserve, resolved by the shareholders and notarized, then filed with the Handelsregister. It is optional but standard, because the GmbH suffix removes the undercapitalization signal that banks and suppliers read into the UG name.
What Documents Do You Need for German Company Formation?
You need the articles or Musterprotokoll in German, director consent, a shareholder list, IDs, proof of a German address, and capital-deposit confirmation. Foreign documents need a sworn German translation plus an apostille or consular legalization, which adds cost and lead time.
| Document | Notes |
|---|---|
| Articles of association or Musterprotokoll | In German |
| Managing director consent declaration | Signed by each director |
| Shareholder list (Gesellschafterliste) | Names, addresses, ownership stakes |
| Passports or IDs | All shareholders and directors |
| Proof of German business address | Lease or rental contract |
| Capital deposit confirmation | Bank certificate |
| Corporate documents for entity shareholders | Register extract, articles, resolutions; notarized and translated |
| Sector license | Where the activity is regulated |
How Much Does It Cost to Register an LLC in Germany?
A straightforward UG costs a few hundred euros out of pocket; a GmbH runs roughly €1,000 to €2,500 in fees, plus the €12,500 you must deposit. Notary fees are fixed by the GNotKG (Court and Notary Costs Act) and scale with share capital, so they are predictable, not negotiable.
| Cost item | UG | GmbH | Source |
|---|---|---|---|
| Notary fees (deed + filing) | Lower (scales with capital) | ~€500–€800+ (Musterprotokoll) | GNotKG value-based schedule |
| Handelsregister entry | ~€150 | ~€150 | Court fee schedule (GNotKG / HRegGebV) |
| Gewerbeanmeldung | €20–€60 | €20–€60 | Municipal trade office fee schedules |
| Transparenzregister (annual) | ~€20/year | ~€20/year | Transparenzregister fee schedule |
| Sworn translation + apostille | Varies by country | Varies by country | Issuing authority + sworn translator |
| Share capital (held, not a fee) | €1+ (practically €500–€1,000+) | €12,500+ paid in | GmbHG §5 / §7 / §5a |
Share capital is not a fee. It stays in the company and funds operations.
How Long Does GmbH Registration Take?
Typically 4 to 6 weeks end to end. The Handelsregister entry alone takes 2 to 4 weeks after notarization and capital deposit; the online Musterprotokoll route can be as fast as five working days, per the IHK Frankfurt online-formation guide. Foreign founders should add weeks for apostilles, translations, and bank onboarding.
| Stage | Typical duration | Note / Source |
|---|---|---|
| Name check with IHK | A few days | IHK |
| Notary appointment + deed | Days to 1 week | Notary availability |
| Bank account + capital deposit | 1–4 weeks | Common bottleneck for non-residents |
| Handelsregister entry | 2–4 weeks; online Musterprotokoll min 5 working days | IHK Frankfurt |
| Gewerbeanmeldung | A few days | Gewerbeamt |
| Finanzamt tax number | 2–4 weeks | Finanzamt |
Delays usually trace to missing apostilles, vague business descriptions, or bank KYC (know your customer) checks on foreign founders.
What Taxes Does a German LLC Pay?
A German GmbH pays corporate income tax of 15% plus a 5.5% solidarity surcharge (effective 15.825%), municipal trade tax, and VAT (value-added tax). The combined corporate burden lands near 30%. It keeps HGB (German Commercial Code) double-entry books and files an annual corporation tax return, generally due July 31 of the following year.
| Tax | Rate | Source |
|---|---|---|
| Corporate income tax (Körperschaftsteuer) | 15% | KStG §23 |
| Solidarity surcharge | 5.5% of CIT (effective 15.825%) | SolzG |
| Trade tax (Gewerbesteuer) | 3.5% base × municipal Hebesatz (min 200%) | GewStG §11, §16 |
| Combined corporate burden | ~30% | KStG + GewStG combined |
| VAT standard rate | 19% | UStG §12 |
| VAT reduced rate | 7% | UStG §12 |
| Pension insurance (employer share) | 9.3% | German statutory social insurance |
| Health insurance (employer share) | 7.3% | German statutory social insurance |
| Unemployment insurance (employer share) | 1.3% | German statutory social insurance |
| Care insurance (employer share) | ~1.5% | German statutory social insurance |
Track these deadlines with the Commenda compliance calendar.
When Do You Need German VAT Registration?
Register with the Finanzamt through the ELSTER portal (Germany’s online tax filing system) to receive a tax number (Steuernummer) and a VAT identification number (USt-IdNr). File VAT returns monthly or quarterly. You need the USt-IdNr for intra-EU B2B trade, so register early to avoid holding up invoices.
Does a GmbH Create a Permanent Establishment in Germany?
A registered GmbH is a German tax resident, taxed on worldwide income, so it does not create a surprise permanent establishment (PE) for itself. The PE question cuts the other way for a foreign company operating in Germany without an entity; forming a GmbH puts that exposure on a defined footing. Seek treaty-specific advice.
How Commenda Helps You Register a Company in Germany
German formation runs on notaries, apostilles, and a register that will not move until every document is exact. Commenda’s incorporation service handles German GmbH and UG formation end to end for foreign founders, from notary coordination to the Handelsregister filing, so country 12 behaves exactly like country 1. After formation, Commenda’s entity management platform keeps the entity compliant, tracking Transparenzregister filings, annual statements, and tax deadlines so nothing slips. If you are weighing an entity against hiring through an employer of record, the entity vs EOR calculator runs the numbers.
Book a demo to get a formation plan and cost estimate for your German GmbH: commenda.io/book-a-demo.
