Set Up a GmbH in Germany: What You Need to Know

To set up a GmbH in Germany, you must meet a few key legal and financial requirements. We’ll go through the documents, share capital, costs, registration steps and ongoing obligations you need to know about.

What Do You Need to Set Up a GmbH in Germany?

If you’re setting up a GmbH in Germany, the requirements are as follows:

If you’re trying to find out how to open a company in Germany, you don’t need to be based in Germany to run a GmbH. You can own part of the company as a foreign national and take on the role of managing director if you meet the legal and ID requirements.

How to Set Up a GmbH in Germany: Step by Step

Step 1: Choose the Shareholders, Managing Director and Company Name

First, decide who will own the GmbH and how you’ll divide the shares. You’ll need at least one managing director. Choose the company name and set out what the business will do. Both the name and business purpose go into the articles of association.

Step 2: Prepare the Articles of Association

The articles of association explain how your GmbH is set up. They cover the company name, registered office, business purpose, share capital and each shareholder’s stake.

A simple GmbH with up to three shareholders and one managing director can use the Musterprotokoll. It’s a standard formation document, which reduces the time spent on drafting each one individually. Companies with a more involved setup can use their own articles instead.

Step 3: Have the GmbH Formation Notarised

The GmbH formation has to be notarised. The notary reviews and certifies the formation documents. In eligible cases, you can do the notarisation by video instead of going to the notary in person.

Until the company is entered in the Commercial Register, it’s called a GmbH i.G. (GmbH in formation).

Step 4: Open a Business Account and Pay In the Share Capital

The company typically opens its own account for the capital deposit. The GmbH share capital is €25,000, but you don't have to put all of it in straight away. The company can be registered once at least 25% of each share has been paid in, with at least €12,500 paid in total.

Step 5: Register the GmbH in the Commercial Register

The notary takes care of the Commercial Register application. Once the court enters the company in the register, your GmbH is officially registered and ready to operate as such.

Step 6: Complete Tax and Business Registrations

The following registrations may also be required:

• Trade Office – Most commercial businesses need a Gewerbeanmeldung, the official registration, with the local trade office (Gewerbeamt).
• Tax Office – Register the GmbH with the tax office (Finanzamt) and get its tax number. You may also need a VAT ID, for example if you do business with companies in other EU countries.
• Transparency Register – Add the GmbH’s beneficial owners to the register.
• Permits – Depending on what you do, you may need a licence or other approval before you can start.

How Much Does It Cost to Set Up a GmbH?

The €25,000 share capital isn’t a fee for setting up the company because the money goes into the GmbH itself. You’ll still need to budget separately for the notary, Commercial Register entry, and local trade registration.

Notary fees depend on the formation structure. As a rough reference, the Federal Ministry for Economic Affairs gives €408–€830 for some standard GmbH formations. The Commercial Register adds €225 for a standard cash formation.

The Gewerbeanmeldung has a separate fee, and there’s no single price across Germany. The local authority sets the amount. Legal or tax advice and business banking may result in additional costs.

For a straightforward formation, expect to pay a few hundred euros on top of the share capital. See a detailed breakdown in our GmbH cost guide.

How Long Does Setting Up a GmbH in Germany Take? 

A straightforward GmbH can be set up within a few weeks, although the timing depends on your situation. The process takes longer if you need to:

• Open a business account  and complete KYC checks.
• Wait for the notary and Commercial Register to process your documents.
• Provide foreign documents or certified translations.
• Get extra permits for a regulated business.

What Happens After You Set Up a GmbH?

After registration, you’ll need to keep its accounts in order and prepare annual financial statements. A GmbH is required to use double-entry bookkeeping.

You’ll also need to:

• Pay corporation tax, the solidarity surcharge and trade tax.
• File VAT returns if your business is liable for VAT.
• Submit annual financial statements and other required filings.

These duties continue each year.

How to Set Up a Mini-GmbH (UG) in Germany

A mini-GmbH means a UG (haftungsbeschränkt). It works much like a GmbH, but you can start with just €1 in share capital. It may suit founders with limited initial capital.

The key differences in UG vs GmbH are the share capital requirements and rules for profit retention. A UG must save 25% of its yearly profit in a legal reserve after deducting any losses from previous years. Once the share capital is formally increased to €25,000, the company can continue as a GmbH.

Want to stay in the loop with Finom? Subscribe to our monthly newsletter for the latest updates!

By click on “→”, you agree to our terms and conditions

FAQ

Can I set up a GmbH before I start trading?

Yes. Your business only becomes a GmbH once it’s entered in the Commercial Register.

Do I need a business plan to set up a GmbH in Germany?

No. You don’t need a business plan for setting up a GmbH, but it’s useful if you want to apply for a loan or attract investors.

Can I convert an existing sole proprietorship into a GmbH?

Yes. The best way to do this depends on what you want to transfer and the tax rules that apply. If you’re moving the whole business, the German Transformation Act may let you use an Ausgliederung, which can transfer the business’s assets, contracts and liabilities to the GmbH in one go.