UG Formation Cost: What Are the Real Costs Behind a German UG?

The UG formation cost is more than just the €1 minimum capital, but the total amount varies based on how you form the company and the support you need. If you’re planning to set up a UG in Germany, this article will give a clear overview of the formation fees, share capital and other costs involved.

UG Formation Cost in Germany: Overview

Your UG formation budget depends on how you form the company, with costs including registration fees as well as any legal, tax or administrative services you require. There are mandatory formation fees, share capital and optional costs to account for.

If your UG has up to three shareholders and one managing director, consider a Musterprotokoll instead of custom articles for lower notary fees.

UG Share Capital for Formation: Is €1 Really Enough?

The €1 minimum share capital is not a fee paid to the state or the notary. The money belongs to the company, but €1 will likely not be enough to cover the first business expenses. Founders can contribute more if they need extra funds to get started.

You need to pay in the full agreed share capital before you can register the UG in the Commercial Register. For example, if the founders set the share capital at €1,000, they must pay the full €1,000 before registration. The share capital is paid in cash because German law excludes contributions in kind at formation.

Part of the UG’s annual profit has to remain in the company: 25% must go into a legal reserve after any losses carried forward have been deducted.

UG Notary Fees: Musterprotokoll vs Custom Articles

Notarisation is a required step, whether you’re forming a GmbH or UG. The final fee depends on how the company is set up and which documents are needed.

UG Formation with a Musterprotokoll

A Musterprotokoll puts the articles of association, the shareholders’ list and the managing director’s appointment into a single document, which helps minimise notary costs. It follows a standard formation format which is suitable for simple company structures, but it leaves less room for adding your own terms. 

The German Federal Chamber of Notaries lists a €105 notary fee for a one-person UG with €1 in share capital.

UG Formation with Custom Articles of Association

Custom articles give founders more flexibility and may be required for company structures that don’t suit the standard Musterprotokoll. They can also cost more. Notary fees are calculated under the Court and Notary Costs Act. 

The amount depends on the formation procedure, the company, shareholders and the documents involved when you open a company in Germany. 

Commercial Register and Business Registration Costs for UG Formation

Commercial Register Fee

Once you have paid the share capital, the notary submits the application for UG registration to the Handelsregister. The register court charges a separate €225 registration fee for the initial entry. This does not include the notary’s fees.

Business Registration Fee

You also need to complete a Gewerbeanmeldung (business registration) with your local Gewerbeamt (trade office). The fee varies by municipality.

Additional UG Formation Costs to Consider

Legal and Tax Adviser Costs

Legal or tax advice is optional, but it can add a few hundred euros to your UG formation bill. The more involved the work, the higher the fee is likely to be. The IHK lists accounting setup services, for example, at roughly €30-€75 per 30-minute period, with ongoing bookkeeping at approximately €17-€168 per month, depending on the calculation value.

Costs for Foreign Founders

Setting up a UG from outside Germany can involve some costs that don’t apply to every founder. For example, foreign documents may need translation, certification or an apostille, with fees depending on the documents and services required.

Depending on the provider’s eligibility requirements, you may need to look for a non-resident business account to handle the company’s finances.

Formation Services and Other Fees

A formation service may add around €100-€500 to your total, based on the level of support included. You may also need to pay for sector-specific licences or permits. Keep these one-off costs separate from your regular expenses.

How to Reduce UG Formation Costs

There are a few ways to keep UG formation costs under control:

• Use a Musterprotokoll if your UG meets the requirements for the simplified formation procedure.
• Prepare the required company and shareholder information before the notary appointment.
• Finalise your articles and company details before formation to avoid extra notary and register fees later on.
• Check the Gewerbeanmeldung fee with your local Gewerbeamt.
• Review legal, tax and business formation services before hiring external providers, and pay only for services you need. 

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 non-residents set up a UG in Germany?

Yes. Shareholders and managing directors don’t need to live in Germany. The UG must, however, have a registered office and a domestic business address in Germany.

Can a UG be formed online?

Yes. You can form a UG through an online notarial procedure by video instead of visiting the notary in person. The online authentication procedure costs an additional €25 plus VAT, on top of the standard notary fees.

Are there additional UG formation costs for non-residents?

Not necessarily. Founding a UG from abroad doesn’t mean higher statutory fees. The extra expense may come from handling foreign paperwork, such as getting documents translated or certified.

How long does it take to set up a UG in Germany?

A UG formation may take around two to six weeks. The notary appointment comes first, followed by registration with the Commercial Register.