Company Registration in Germany in 2026: a GmbH or UG for a Foreign Founder, Tax and Reporting
A GmbH or UG for a foreign founder: €25,000 or €1 capital, notary, German address, Transparenzregister, 15% tax plus Soli, trade tax, 19% VAT, reporting.
A foreign national can form a German GmbH or UG without German residence: a notary certifies the articles, the company gives a German business address and registers with the Handelsregister, and the managing director may live abroad. A GmbH needs €25,000 of share capital, of which at least €12,500 is paid in before filing; a UG can start with €1. In 2026 the company pays 15% corporate tax plus a 5.5% solidarity surcharge on the tax and municipal trade tax, and standard VAT is 19%. Only medium-sized and large companies need a statutory audit. Registering a GmbH gives no right to live in Germany.
Last verified 9 October 2026 against the official statute texts on gesetze-im-internet.de (GmbHG, BeurkG, HGB, GwG, AO, KStG, SolZG, GewStG, UStG, EStG), the Ukraine–Germany treaty on zakon.rada.gov.ua and the Federal Ministry of Finance notice on the new treaty. Our own fees and turnaround are excluded because they depend on the entity and scope. Register court and notary fees follow HRegGebV and GNotKG and depend on capital and documents, so we quote them in the proposal after calculating them.
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What changes in 2025–2028
| When | Change | Source |
|---|---|---|
| 2025 | VAT small-business limits: €25,000 last year and €100,000 this year instead of €22,000 and €50,000 | UStG s. 19 |
| 2025–2026 | Paper B2B invoices allowed for supplies up to 31 Dec 2026 | UStG s. 27(38) |
| 19 May 2026 | New double tax treaty with Ukraine signed; not in force on the check date | BMF |
| 2027 | 280% minimum trade tax multiplier (law of 29 June 2026); paper invoices only if last year's turnover was up to €800,000 | GewStG s. 36(5b), UStG s. 27(38) |
| 2028 | Corporate tax 14%, then 1 point lower each year to 10% from 2032; e-invoices mandatory for all domestic B2B supplies | KStG s. 23 |
Which entity to choose
| Entity | Capital | Notes | Source |
|---|---|---|---|
| GmbH | From €25,000; before filing at least 1/4 of each share and €12,500 in total | The standard form for operating businesses and subsidiaries | GmbHG ss. 5, 7 |
| UG (haftungsbeschränkt) | From €1, paid in full in cash, contributions in kind prohibited | Must carry "UG (haftungsbeschränkt)" in its name; 1/4 of annual profit goes to a reserve until capital reaches €25,000 | GmbHG s. 5a |
| AG | From €50,000 | Stock corporation, usually for larger structures and outside investors | AktG s. 7 |
| Branch (Zweigniederlassung) | Has no share capital of its own | Part of the foreign company; the parent is liable | HGB s. 13d |
A UG keeps the starting capital minimal, while banks, counterparties and landlords look at the capital when they assess it. A GmbH with €25,000 is usually the better fit for a subsidiary of a foreign business. Subsidiary and branch are compared in the guide Entering the German market.
Shareholders, director and address
- Shareholders. A foreign individual or company. A corporate shareholder proves its existence with an apostilled extract from its home register.
- Managing director (Geschäftsführer). At least one, a natural person with full legal capacity; disqualifications are listed in GmbHG s. 6(2). The statute sets no citizenship or residence requirement (GmbHG s. 6). Shareholders appoint and remove directors, as a rule at any time (s. 38, s. 46).
- Seat and address. The registered seat is a place in Germany fixed by the articles. A German business address for service is filed on registration (s. 4a, s. 8(4)).
- Beneficial owners. Filed with the Transparenzregister. A beneficial owner is an individual holding more than 25% of capital or votes or controlling the company otherwise (GwG s. 3, s. 20).
How registration works
- Articles. Custom articles or the model protocol (Musterprotokoll) for a company with 1–3 shareholders and 1 director. The protocol also serves as the shareholder list and allows no deviations from the statute (GmbHG s. 2(1a)).
- Notary. The articles are notarised. A representative acts under a notarised or certified power of attorney. Video notarisation through the Federal Chamber of Notaries system needs a qualified electronic signature and identification with a German eID or an EU/EEA eID at the "high" level (BeurkG s. 16a, s. 16c). A founder holding only a Ukrainian passport usually cannot use the video route and signs in person or through a power of attorney.
- Apostille. Ukraine and Germany are both parties to the 1961 Hague Convention, so Ukrainian documents are legalised by apostille (HCCH). A foreign notary or consul may brief the director on the duty to report to the court.
- Capital. Contributions are paid before filing. The director confirms payment, and the court may ask for an EU bank statement (GmbHG s. 8(2)). Opening the account is the bank's decision after KYC.
- Register filing. Filed electronically in publicly certified form with the register court at the seat: the articles, directors' authority, shareholder list, and the director's declarations on payment and on disqualifications (HGB s. 12). Until entry the GmbH does not exist as such, and anyone acting in its name is personally and jointly liable (GmbHG s. 11).
- Entry. The register shows the company name, seat, German address, business purpose, capital, date of the articles and the directors with their powers (GmbHG s. 10).
- Tax registration. Business notification to the municipality (Gewerbeanmeldung, GewO s. 14), the electronic tax registration questionnaire within 1 month (AO s. 138), then a tax number and a VAT ID.
Corporate changes after registration
| Change | What it takes | Source |
|---|---|---|
| New managing director | Register filing with the appointment or removal documents; the new director gives the s. 6(2) declaration | GmbHG s. 39 |
| New German address | Register filing | HGB s. 31 |
| New seat or articles | Shareholder resolution by 3/4 of votes, notarised; effective on entry in the register | GmbHG ss. 53, 54 |
| Share transfer | Notarial assignment; the notary files the new shareholder list | GmbHG ss. 15, 40 |
Company tax
Tax residence. A GmbH is fully taxable in Germany if its place of management or its seat is in Germany (KStG s. 1).
| Tax | Rate and rule | Source |
|---|---|---|
| Corporate tax | 15% in 2026–2027; 14% in 2028, 13% in 2029, 12% in 2030, 11% in 2031, 10% from 2032 | KStG s. 23 |
| Solidarity surcharge | 5.5% of the corporate tax | SolZG s. 4 |
| Trade tax | 3.5% × the municipal multiplier; the €24,500 allowance is unavailable to a GmbH; 280% minimum multiplier from 2027 | GewStG s. 11, s. 16 |
| Dividends received by a GmbH | Exempt, with 5% treated as non-deductible expenses; no exemption for holdings below 10% | KStG s. 8b |
| Dividend withholding tax | 25% plus Soli; a foreign corporation gets back 2/5 of the tax withheld | EStG s. 43a, s. 44a(9) |
A trade tax example: at a 400% multiplier the tax is 3.5% × 400% = 14% of profit. Each municipality sets its own multiplier, so the total burden of a GmbH is calculated for the actual address. We avoid the common "about 30%" estimate unless it has been worked out for the municipality in question.
Treaty with Ukraine
| Income | 1995 treaty in force | New treaty of 19 May 2026 (once in force) |
|---|---|---|
| Dividends | 5% for a company holding at least 20%, otherwise 10% | 5% for a company holding at least 20% for 365 days, otherwise 15% |
| Interest | 2% on commercial credit and bank loans, otherwise 5%; some interest exempt | 5% |
| Royalties | 5% for literary, artistic and film works; 0% for scientific works, patents and trademarks | 5% |
Sources: 1995 treaty, arts. 10–12, BMF on the new treaty, Bundestag bill 21/8245. The new treaty applies from 1 January of the year after it enters into force; we name the start date once both sides have ratified it.
VAT (Umsatzsteuer)
- Rates: 19% and a reduced 7% (UStG s. 12).
- Small-business exemption: up to €25,000 last year and €100,000 this year, for a business established in Germany, and for one established elsewhere in the EU under the special procedure of s. 19(4); a company from outside the EU without a German establishment cannot use it (UStG s. 19).
- Advance returns: electronically by the 10th day after the period, with payment the same day. The period is a quarter, or a month if last year's VAT exceeded €9,000; a one-month extension is available on application (UStG s. 18, UStDV s. 46). For new businesses in 2021–2026 the period follows the projected tax.
- EC sales list: by the 25th day after the month, quarterly if intra-EU supplies stay within €50,000 (UStG s. 18a).
- A Ukrainian company without a German GmbH: its VAT office is Finanzamt Magdeburg (UStZustV s. 1); for work and services by a foreign business, the German business or legal-entity customer pays the tax (reverse charge, UStG s. 13b).
- E-invoicing: in 2027 paper only if last year's turnover was up to €800,000, from 2028 e-invoices for all domestic B2B supplies (UStG s. 27(38)).
Bookkeeping and reporting
| Obligation | Deadline and rule | Source |
|---|---|---|
| Annual accounts | Prepared within 3 months after year-end, small companies within 6 months | HGB s. 264 |
| Publication | Electronically in the Unternehmensregister within 12 months; small companies publish the balance sheet and notes, micro companies only the balance sheet and may deposit it (Hinterlegung) | s. 325, HGB s. 326 |
| Penalty for not publishing | Administrative fine of €2,500 to €25,000 from the Federal Office of Justice | HGB s. 335 |
| Audit | Mandatory except for small companies; the auditor is a Wirtschaftsprüfer | s. 316, HGB s. 319 |
| Annual returns | Without a tax adviser by 31 July of the following year; with an adviser by the last day of February of the second year | AO s. 149 |
| E-Bilanz | Balance sheet and profit and loss account filed electronically in the official format | EStG s. 5b |
| Prepayments | Corporate tax 10 Mar, 10 Jun, 10 Sep, 10 Dec; trade tax 15 Feb, 15 May, 15 Aug, 15 Nov | GewStG s. 19 |
| Payroll | Wage tax return by the 10th day after the period; social security by the third-to-last banking day of the month worked | EStG s. 41a, SGB IV s. 23 |
| Record keeping | Books and accounts 10 years, vouchers 8 years, business letters 6 years | HGB s. 257, AO s. 147 |
Size classes (HGB s. 267, s. 267a) use two of three criteria: micro — balance sheet up to €450,000, turnover up to €900,000, up to 10 employees; small — up to €7.5M, €15M and 50 employees; medium — up to €25M, €50M and 250 employees.
Is Germany an offshore jurisdiction?
Germany is an EU state with 15% corporate tax plus Soli and municipal trade tax, mandatory publication of accounts, a beneficial-owner register and CFC rules for its own residents (AStG ss. 7, 8). A German GmbH is an ordinary operating company carrying the full tax burden, so what matters is the trade tax for the chosen municipality, VAT and the route of dividends to the owner. The owner's own taxes are covered in the guide Owner tax residence.
Fees and schedule are fixed in a written proposal. Describe your German case.
Frequently asked questions
Can a non-resident be the managing director of a GmbH?
Yes. The statute requires a natural person with full capacity and without the disqualifications in GmbHG s. 6(2); it sets no citizenship or residence requirement. The bank checks directors and beneficial owners under its own KYC rules, and we do not promise its decision in advance.Can a GmbH be formed remotely?
Video notarisation works with a German eID or an EU/EEA eID at the "high" level. A founder holding only a Ukrainian passport usually visits a notary in Germany or gives an apostilled notarised power of attorney to a representative.What are the government fees for a GmbH?
Register court and notary fees follow HRegGebV and GNotKG and depend on the capital and the documents. We calculate the exact amount for your articles in the tailored proposal.Is a German address required?
Yes, a German business address is filed on registration and entered in the register. A change of address is filed with the register as well.When does a GmbH start paying VAT?
VAT arises with taxable supplies. The small-business exemption applies up to €25,000 last year and €100,000 this year. For new businesses in 2021–2026 the tax office sets the return period from the projected tax.Are e-invoices mandatory?
For domestic B2B supplies, from 2028 for everyone. In 2027 other invoices remain allowed if last year's turnover was up to €800,000.What happens if the accounts are not published?
The Federal Office of Justice imposes a fine of €2,500 to €25,000. The publication deadline is 12 months after the balance sheet date.Official sources
This material is for general information only and does not constitute legal or tax advice. Accurate as of the publication date.