Entering the German Market in 2026: a Subsidiary GmbH or a Branch, and Residence for the Owner
Subsidiary GmbH or branch in Germany: liability, tax, registration. Owner residence: section 21, Blue Card 2026, Opportunity Card, citizenship.
A foreign company enters the German market in two main ways: it forms a subsidiary GmbH (or UG), or it registers a branch (Zweigniederlassung) with the register court where the branch sits, giving a German address and permanent representatives. A subsidiary GmbH is a separate legal entity liable only with its own assets; a branch is part of the foreign company, and the parent is liable for its obligations. The owner gets no residence from either of them. Status is obtained separately from the foreigners authority (Ausländerbehörde): section 21 of the Residence Act for entrepreneurs, the EU Blue Card or another employment route for staff. Germany has no golden visa and no separate digital nomad status.
Last verified 9 October 2026 against the official texts of AufenthG, AufenthV, StAG, HGB, GmbHG, GewO, AO and AStG on gesetze-im-internet.de, the Blue Card threshold notice in the Bundesanzeiger, EU decision 2026/1912 on EUR-Lex and Bundesrat draft ordinance 431/26. Our own fees and turnaround are excluded because they depend on the structure and scope.
Planning the German market? INNOVA compares forms of presence for your sales model, registers the chosen structure and reviews residence routes for the owner and team separately. Request a tailored proposal for Germany.
Subsidiary GmbH or branch
| Criterion | Subsidiary GmbH / UG | Branch (Zweigniederlassung) |
|---|---|---|
| Legal status | Separate German legal entity | Unit of the foreign company |
| Liability | Limited to the GmbH's assets | The parent is liable |
| Capital | GmbH from €25,000 (€12,500 before filing), UG from €1 | Has no share capital of its own |
| Registration | Notarised articles, Handelsregister filing at the seat | Filing by the parent's directors with the register court at the branch |
| Management | Managing director, no residence requirement | Permanent representatives; GmbHG s. 6(2) disqualifications apply |
| Tax | 15% corporate tax plus Soli and trade tax on all GmbH profit | Profit attributable to the branch as a permanent establishment is taxed in Germany |
| Reporting | Own HGB accounts published in the Unternehmensregister | The parent's accounts are published in Germany in German |
Sources: HGB s. 13d, s. 13e, s. 325a, GmbHG ss. 5, 7, KStG s. 23.
Subsidiary GmbH
The most flexible form for hiring, contracts with German customers, banking and a future sale of the business. A foreign company can be the shareholder and a non-resident the managing director. A GmbH with its place of management or seat in Germany is a German tax resident (KStG s. 1). Dividends to the parent carry 25% withholding tax plus Soli; a foreign corporation gets back 2/5 of it (EStG s. 44a(9)), and for a Ukrainian parent holding at least 20% the 1995 treaty caps the tax at 5% (art. 10).
Formation, tax and reporting step by step are in the guide Company registration in Germany.
Branch of a foreign company
The parent's directors file the branch with the register court where it is located. The filing confirms that the company exists and gives the branch's German address and business purpose, the parent's register and number, its legal form and the permanent representatives, plus the governing law for a company from outside the EU/EEA (HGB s. 13e(2)). Ukrainian documents are legalised by apostille. Opening a branch is also notified to the municipality under GewO s. 14, followed by tax registration within 1 month (AO s. 138).
The HGB has no separate registration for a "representative office". A dependent unit without commercial activity is notified under GewO s. 14, and we check the permitted scope of its work for the specific model before launch.
A branch suits a business in Germany that continues the parent's activity when the parent wants one set of accounts. Separate liability, German partners, hiring or a future sale of the German business usually point to a subsidiary GmbH.
Residence for the owner and team in 2026
Ukrainian citizens are not on the AufenthV s. 41 list, so as a rule residence for work or business starts with a national D visa from a German consulate (AufenthV s. 41).
| Route | Key conditions | Right to work | Source |
|---|---|---|---|
| Self-employment, s. 21 | Economic interest or regional need, expected positive effect, financing from own capital or a loan commitment; business plan, experience, capital, jobs and innovation are weighed; applicants over 45 need adequate retirement provision. The statute names no investment amount | In own business | AufenthG s. 21(1),(3) |
| Liberal-profession freelancer, s. 21(5) | Exempt from the s. 21(1) conditions, with any required professional licence | Freelance | AufenthG s. 21(5) |
| EU Blue Card | Gross salary from €50,700 a year in 2026; €45,934.20 in shortage occupations and for graduates of the last 3 years | With the employer | AufenthG s. 18g, BAnz AT 18.12.2025 B3 |
| Opportunity Card (Chancenkarte) | Up to 1 year to look for work; side work up to 20 hours a week and trial work up to 2 weeks; means of subsistence; German A1 or English B2; a qualification or points | Limited | AufenthG ss. 20a, 20b |
| Purpose not covered by the Act | "In justified cases", for example living on own means | None | AufenthG s. 7(1) |
The Residence Act has no separate digital nomad, passive income or investor status. The old condition of €250,000 and 5 jobs still appears on outdated pages; the current text of section 21 names no amount, and the decision weighs all criteria together. Blue Card thresholds are recalculated every year, and the figures above apply to 2026.
Settlement and citizenship
- Entrepreneur — a settlement permit after 3 years under section 21 if the business is successful and income is secured (s. 21(4)).
- EU Blue Card — after 27 months of work with pension contributions and basic German, or 21 months with German at B1 (s. 18c(2)).
- Skilled workers — after 3 years of residence and 36 months of pension contributions with German, or 2 years with a German qualification (s. 18c(1)).
- General settlement permit — 5 years of residence, secured income, 60 months of pension contributions and sufficient German (AufenthG s. 9).
- Citizenship — after 5 years of lawful residence with German at B1. The fast-track 3-year route has been repealed, and German law no longer requires giving up the previous citizenship (StAG s. 10, s. 25). How the country of the previous citizenship treats dual nationality is checked separately.
Ukrainians in Germany: temporary protection to 2028
The EU Council extended temporary protection to 4 March 2028 by decision 2026/1912. New applicants must confirm that they have met Ukraine's military registration duties; the condition does not apply to people who already held protection on 30 July 2026 and keep it in the same country (EUR-Lex).
In Germany, section 24 permits valid on 1 February 2026 were extended automatically to 4 March 2027 without an application (Fortgeltungsverordnung). Extending the transitional regime to 4 March 2028 is in a draft ordinance (Bundesrat 431/26); we found no official publication of it on the check date, so we check the validity of each card against the document itself.
Moving from section 24 to section 21, a Blue Card or another route follows the general rules of the Residence Act, and the in-country procedure is checked case by case without promises.
Tax for an owner who moves to Germany
An individual becomes a German tax resident by keeping and using a home there (Wohnsitz) or by habitual abode of more than 6 months in a row (AO s. 8, s. 9). A German resident controlling more than 50% of a foreign company adds its passive income to their own tax base if it is taxed below 15% (AStG s. 7, s. 8). That is why the ownership of a Ukrainian or other foreign company is worth recalculating before the move. How this fits with tax in the country of departure is covered in Owner tax residence.
Fees and schedule are fixed in a written proposal. Describe your German case.
Frequently asked questions
Should we open a subsidiary or a branch in Germany?
A subsidiary GmbH fits when you need separate liability, hiring, German partners or a future sale of the business. A branch suits activity that continues the parent's business; the parent is liable for its obligations, and its accounts are published in Germany in German.Can a foreign company open a representative office in Germany?
The HGB has no separate registration for a representative office. A dependent unit is notified to the municipality under GewO s. 14, and one that trades is registered as a branch under HGB s. 13d. We check the permitted scope against your model.How does the owner of a German GmbH get residence?
Through section 21 of the Residence Act: the foreigners authority weighs the economic interest or regional need, business plan, experience, capital and financing. The first permit runs up to 3 years, and settlement is possible after 3 years of successful activity. Ukrainian citizens normally need a national D visa.How much must an entrepreneur invest for a German residence permit?
The current text of section 21 sets no fixed amount. The decision weighs all criteria together, and financing must be backed by own capital or a loan commitment.Does Germany have a digital nomad visa?
The Residence Act has no separate digital nomad status. Remote liberal-profession specialists use section 21(5), entrepreneurs section 21, and employees the EU Blue Card.What is the German Blue Card salary threshold in 2026?
€50,700 gross a year, or €45,934.20 for shortage occupations and graduates of the last 3 years. The thresholds are recalculated every year.How many years until German citizenship?
5 years of lawful residence with German at B1 and the other conditions of StAG s. 10. The 3-year fast track has been repealed, and German law does not require giving up the previous citizenship.Official sources
This material is for general information only and does not constitute legal or tax advice. Accurate as of the publication date.