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Around 84 million people and direct access to all EU core markets — the most credible location for B2B in the German-speaking world.
Company formation
Company Formation in Germany
Germany is the EU's largest economy with a domestic market of around 84 million people. Incorporating a company is formalised (notary requirement, commercial register) and, by European standards, comes with higher costs and an effective corporate tax burden of around 30 %. Legal status: 2026, without guarantee.
~30 % effective corporate taxGmbH from €25,0006–10 weeks
Key figures
Germany at a glance
~30 %
Effective corporate tax burden
25.000 €
Minimum capital GmbH
6–10 weeks
Realistic formation time
3.568
Startup formations 2025 (record)
Advantages
What speaks for Germany
Recognised legal form
The GmbH is internationally established and enjoys high trust with banks, corporate clients and investors.
Startup momentum
2025 was a record year with 3,568 startup formations (+29 %); 27 % of new startups have AI at their core.
Tax comparison
Example: €100,000 profit
| Germany | EU average | |
|---|---|---|
| Corporate tax (effective) | ~30 % | ~21 % |
| Tax on €100,000 profit | ~€30,000 | ~€21,000 |
| Special feature | Municipal trade tax (Hebesatz) | no municipal profit tax in many countries |
Up to distribution to individuals, the total burden in Germany can reach ~48 % (corporate tax + solidarity surcharge + trade tax + withholding tax).
Legal forms
Legal forms at a glance
| Legal form | Minimum capital | Liability | Typical use |
|---|---|---|---|
| GmbH | €25,000 (min. €12,500 paid in) | limited | SMEs, B2B, standard |
| UG (haftungsbeschränkt) | from €1 (25 % reserve duty up to €25,000) | limited | Low-capital formation |
| GmbH & Co. KG | capital of the general-partner GmbH | general partner limited | Holdings, tax flexibility |
| Sole proprietorship / GbR | none | unlimited | Freelancers, micro businesses |
Notarisation of the articles of association is mandatory; registration with the commercial register is filed via the notary.
Process
How incorporation works
Legal form & articles
Choose the legal form and prepare the articles of association.
Notary appointment
Notarisation of the articles.
Commercial register
Registration is filed via the notary.
Bank account + capital
Open the account and pay in the share capital.
Tax office, trade office, IHK
Tax registration questionnaire, trade registration, chamber membership.
Transparency register
Register the beneficial owners.
Realistically 6–10 weeks including the bank account.
Costs
Costs (indicative)
Notary ~€400–1,000, commercial register ~€150, trade registration ~€20–60, legal advice varies; ongoing tax advisory ~€4,000–6,000/year (indicative).
Taxes
Corporate taxes
| Item | Rate |
|---|---|
| Corporate income tax | 15 % |
| Solidarity surcharge (on CIT) | 5.5 % (effectively ~0.825 %) |
| Trade tax (municipal rate) | usually ~14–17 % |
| Effective total burden (companies) | ~30 % |
| Withholding tax on distributions | 25 % (+ surcharge) |
The trade-tax multiplier varies by municipality (e.g. Berlin 410 %, Munich 490 %). Up to distribution to individuals, the total burden can reach ~48 %.
Knowledge check
Worth remembering
Tap a card to reveal the answer. Content AI-assisted and editorially reviewed.
Minimum capital GmbH?
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€25,000, of which €12,500 paid in at formation.
Effective corporate tax?
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~30 % (CIT + surcharge + trade tax).
Legal form from €1?
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UG (haftungsbeschränkt) — with reserve duty.
Location in numbers
Germany in numbers
| Metric | Value |
|---|---|
| Startup formations 2025 | 3,568 (record, +29 % vs. 2024) |
| New companies (commercial register) | ~100,000/year |
| New startups with AI at the core | 27 % |
| Population | ~84 m |
Latest developments
Latest developments (as of July 2026)
- Record year 2025 for startup formations (+29 %).
- High AI share: 27 % of new startups build on AI.
- MoPeG reform of partnership law (since 2024) for GbR/partnerships.
FAQ
Frequently asked questions about Germany
GmbH or UG?
The GmbH (€25,000) is seen as more reputable; the UG starts from €1 but must build reserves.
Is a notary mandatory?
Yes, the articles of association must be notarised.
How high is the tax burden?
Effectively around 30 % at company level.
How long does formation take?
Realistically 6–10 weeks including the account.
Related countries
These locations might also interest you
Company formation
Austria
23 % corporate taxGmbH/FlexCo from €10,000
Country guide
Company formation
Switzerland
effective from ~12 %GmbH from CHF 20,000
Country guide
Sources & disclaimer
Sources
This page is for general information only and does not replace legal or tax advice. Binding information is provided by the competent authorities of the respective country and by lawyers, notaries and tax advisors licensed there. For the tax consequences of relocating from Germany or Austria, tax advisors licensed in those countries are responsible. All information without guarantee. Status: July 2026. For an individual assessment: contact@goglobal.associates.
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