Germany

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DOING BUSINESS

 


Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The most important aids concern transactions achieved in the 5 new East Lšnder. Companies can benefit from equipment, structures and research and development subsidies (the Ministry of Economics and Technology should be contacted). They can also get preferential credits and guarantees, for example when they create autonomous structures in new Lšnder or when they buy stock into a company located in these new Lšnder. Both the Invest in Germany agency and the Federal Commissioner for Foreign Investment in Germany should be contacted for further information.

 

Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Gesellschaft mit beschrankter Haftung (GmbH) is a Private Limited Company Minimum 2 partners
nb: 1 member for a single-member GmbH.
Minimum 25,000 € with release of at least 50% at the constitution. Liability is limited to the amount contributed. About 1,000 € (+ possible lawyer's fees from 600 to 800 €). No
Aktiengesellschaft (AG) is a Public Limited Company. Minimum 2 shareholders.
nb: 1 shareholder for a single-member AG.
Minimum 50,000 € with release of 25% at the constitution. Liability is limited to the amount contributed. Expenses > 1,000 €. Yes
Offene Handelsgesellschaft (OHG) is a general partnership. Partners can be individual or legal entities. No minimum capital. Partners' liability is joint and indefinite on the company's obligations and debts. Expenses > 1,000 €. No
The Kommanditgesellschat (KG) is a limited partnership. Two types of partners: active partners and sleeping partners. No minimum capital. Active partners' liability is personal and indefinite. Liability of sleeping partners is limited to the amount contributed. Expenses > 1,000 €. No

Registration and licensing procedures
Called "Satzung" for an AG, and "Gesellschaftvertrag" for GmbH, status must be drawn up in a notarized deed.
The company's registration should be made with the Trade Register, at the Clerk's Office of the Magistrates' court where the company is located.
Branches must be registered with the Trade Register where the company is located.
Registration has to be published in the "Bundesanzeiger" as well as in the legal advertisement journal. Different declarations must be made after registration and, notably with the tax Office (Finanzamt) and the Social Security.

Foreign exchange control

There is no currency exchange control in Germany. Consequently, free conversion is carried out as well as the right to transfer profits and capital. A declaration is requested for capital transfers exceeding DM 5,000. This declaration, which is only required for statistical purposes, must be made with the Lšnder's central banks. There is no longer applicable exchange rate.


Regulations concerning equity investment
A majority holding interest in the capital of a local company by foreign investors is legal.  


Foreign Direct Investment inflows in Germany

FDI inflows 2003 2004 2005 World rank (*)
2005
FDI inflows (USD million) 29 202 15 113 32 663 123/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

 

Last modified in 2006 - ongoing update
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