Why Set Up an LLC (Limited Liability Company) in Germany


Germany is currently one of the go-to countries for entrepreneurs and startups. A country that is rich in history and independence, Germany also has a strategic location working in its favor when it comes to why businesses should consider setting up in this vibrant country

Germany is located in Western Europe and it shares borders with every major economy in central Europe, providing instant access to both established markets in western Europe and growing markets in central and eastern Europe. Its territory stretches from the North Sea and the Baltic in the north to the Alps in the south and is traversed by some of Europe’s major rivers such as the Rhine, Danube, and Elbe.

Being one of the largest countries in Western Europe, Germany offers huge market potential.

Foreign investors who want to open companies in Germany can choose between several types of structures. Most companies are incorporated in Germany as a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH). An LLC can be incorporated in Germany by at least one investor with a minimum share capital of 25,000 EUR. The company’s capital can be submitted in cash or kind (in this case, the value of the assets must be shown specifically in the articles of association). One issue to consider is that the shares of the German GMBH cannot be transferred to the public nor registered at the Stock Market. The General Shareholder’s Meeting is the one that ensures the management of the GMBH. The day-to-day corporate decisions are made by the company’s director which is appointed by the general meeting of the shareholders. The VAT is either 19% or 7%, depending on the item; medical, bank, and insurance services are generally exempt.

Still not convinced that Germany is the best place to set up your business? Here are some facts:

  • Major domestic market – Germany is the European Union’s most populous country (82 million inhabitants) offering a huge domestic market.
  • High productivity – Germany is one of Europe’s most cost-effective production locations and has one of the highest productivity rates in the world.
  • EU Membership – Germany is a member of the European Union (EU) allowing more opportunities to do business with other member countries.
  • Germany is a great power and has the largest economy in the European Union (EU) and the fourth largest in the world after the USA, China, and Japan.
  • Germany’s great infrastructure will also make it easy for you to set up your own business; it features more than 230,000 km of roads, 37,000 km of railways and a modern telecommunications network
  • Competitive Tax Conditions – Germany has significantly reduced its corporate tax levels.

As Europe’s largest economy, Germany offers a prime continental location, a qualified labor force, openness to foreign investment and relative economic stability, making it a popular international expansion choice