Arguments for setting up a company in Germany
Germany is the first choice for Chinese parent companies or individuals in terms of setting up a company in Europe. The reasons for this are not only Germany’s geographical location in the heart of Europe, but also the comprehensive laws and regulations that apply to companies in Germany. German corporate law ensures the stability of business operations while monitoring companies to ensure their credibility. There are no restrictions on foreign companies or individuals setting up businesses in Germany, meaning citizens of any nationality can start a business and open a business bank account in Germany. They do not have to be residents of Germany.
Remote company creation
When expanding into the German market, remote start-ups are increasingly in demand. Fortunately, digitization now makes it easier to establish a company in Germany in a legally secure manner, even without the parties involved being present in person. As of August 2022, the hurdles for founding a company online will now be even lower.
When a GmbH is formed, the presence of the shareholders (or their representatives) and the managing director to be appointed is usually mandatory at a German notary public. Especially when a German subsidiary is to expand the distribution channels of foreign companies, a representative from the parent company was often appointed in the past. In order to minimize travel activities during the pandemic, the regulations have already been relaxed in recent months. We now offer you a comprehensive service to realize remote incorporation professionally and safely.
How does setting up a business in Germany succeed remotely?
Since the Covid 19 pandemic began in January 2020, we have been in close communication with government agencies, banks, and tax authorities to define the best way to start a business online. After testing and evaluating a number of possible solutions, we were able to identify all the obstacles to remote business startups – and now even offer you to open a business account online.
During the last few months, we have been working for our clients in this way on subsidiaries of listed companies, state-owned companies, and even companies with a rather complex shareholder structure of ten or more holdings in shareholdings in Germany.
Well looked after - from account opening to recruiting
What are administrative steps different in Germany than in France? How do you open a business account in Italy? In addition to a variety of opportunities, the tension between different systems, (corporate) cultures, work roles or work styles also poses a number of challenges when entering the market. We will accompany you.
How can you build a stable and solid team in Germany?
We have extensive experience in building teams for European companies with foreign backgrounds.
What special features must be taken into account when setting up a company in Germany?
Choice of legal form/corporation form
The most common legal form in Germany is the limited liability company, abbreviated GmbH. A GmbH consists of one or more shareholders who assume limited liability for the company with their capital contributions. The company is liable for the debts of the company with its entire assets. Partners may be natural persons or companies, all of whom have limited liability.
A GmbH can avoid operational risks to the greatest possible extent and clearly distinguish entrepreneurial responsibility from personal responsibility. The shareholders do not assume personal responsibility for their company.
Choice of the company location
The following factors should be taken into account when choosing a location: the economic level and business development models of the city, the local labor market, the willingness of local government authorities and other foreign companies to cooperate, etc. The registered company address may be different from the warehouse address.
We recommend that Chinese companies focus on larger German cities when choosing a location because a greater number of highly qualified workers can be found in large cities. For companies that want to grow continuously in the long term, qualified personnel who are committed to the company for the long term are very important.
The function of managing directors in german companies
The functions held by managing directors in German companies are similar to those of managing directors and legal entities in China. A managing director is the legal representative of a company, both in and out of court. He or she also takes responsibility for the company and is liable. General managers ensure company growth and are responsible for all management tasks. A limited liability company can have one or more managing directors. If a managing director agrees on a sole power of representation, he or she can represent the GmbH alone and sign contracts with a legally binding signature as a GmbH shareholder. If several managing directors are appointed, they are all only jointly authorized to represent the company, unless the articles of association stipulate otherwise.
Employment of employees
German companies are not required to hire local employees. Citizens of any nationality or state-owned enterprises can establish a company in Germany. The managing director or CEO can also be a natural person who is a permanent resident of China. Therefore, many companies with a Chinese background choose to manage the companies of their foundation to manage their companies remotely. This is fully compliant with the law. When the company's business is stable, employees can be hired locally or Chinese employees can be sent to Germany.
Meet our experts in business establishment and structuring
Wei Tao
Founder | Managing Director
Frankfurt am Main, Germany
Ting Zhao
Key Account Manager
Frankfurt am Main, Germany
The procedure for setting up a remote company in Germany
We believe that the purpose of establishing a subsidiary is to ensure good business development in Germany.
In the pre-establishment phase, we usually work with our clients to define the company’s business model, strategy, and development plan in Germany. This includes the legal form of the company, the shareholder structure, the recruitment of the managing director, the choice of location, and the share capital of the subsidiary.
Preparations for the establishment of the company
We determine the capital structure of the investment together with our customers. Subsequently, the company name of the German subsidiary is examined to define the type and scope of business. We then commission a German lawyer to draw up the lawyer to draft of the articles of association. Also, we prepare the application documents for the opening of a business account in Germany.
Preparation of documents for the opening of a business account
When founding a company remotely, opening a business account is certainly the most difficult step in the entire founding process. Remote account openings are far less accepted by banks in Germany than in other countries. It is essential that all documentation is complete and a clear development plan is in place in order to open business accounts remotely in Germany.
German representation in China
During the remote company formation process, the documents must be notarized with a signature/hand sign at the German Embassy or German Consulates General in China. If the shareholder is a company, the double certification of the trade license and the German translation of the parent company's articles of association must also be submitted.
Notarization in Germany
Once all documents have been notarized twice in China and sent to the German notary's office, we carry out the notarization of the registered company in Germany on behalf of the client.
Opening of the German business accounts
All the documents for opening a business account are submitted to the bank, the share capital is paid in and the certificate of receipt is issued.
Registration in the commercial register
We submit all notarized documents and bank account certificates to the Commercial Court. After the verification, the Commercial Court enters the Commercial Register and the company is successfully established.