Expand Business in Germany

Global Upside helps businesses expand into Germany by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with German laws and regulations.

The hiring and incorporation processes in Germany are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Germany. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Berlin

Currency

Euro (EUR)

Language

German (Deutsch)

Government

Federal Parliamentary Republic

Country Overview

Germany has the largest economy as well as the largest population in Europe. The capital city, Berlin, is also its biggest city. Germany faced an economic crisis after World War II but is now the global center of industrial and technological innovation.

Legal Entity Setup

Options for setting up a legal entity in Germany include:

Partnership

Partnership businesses are established by at least two people or two legal entities. There are 4 major forms of partnership structures in Germany:  

GmbH & Co. KG, oHG (Offene Handelsgesellschaft), GbR (Gesellschaft bürgerlichen Rechts), KG (Kommanditgesellschaft)

  • No minimum share capital required
  • One partner is personally liable (unrestricted)

Corporation

A corporation is a legal entity setup that can be established between one to five people, require some start-up capital, and safeguard your personal assets from business debts. In Germany, there are 4 basic forms of corporate structures: 

GmbH (Gesellschaft mit beschränkter Haftung) – Limited Liability Company

  • Number of partner(s) – 1 or more
  • Minimum share capital is €25,000
  • Liability is restricted to only the share capital
  • One of the most recognized forms of setup
  • Individual establishment is also possible due to minimal compulsory provisions

UG (Unternehmergesellschaft haftungsbeschränkt) – Limited Liability Entrepreneurial Establishment

  • Number of partner(s) – 1 or more
  • Minimum share capital is €1
  • Liability is restricted to only the share capital
  • Strict prerequisites to collect annual revenue

AG (Aktiengesellschaft) – Stock Corporation

  • Number of partner(s) – 1 or more
  • Minimum share capital is €50,000
  • More number of shareholders involved
  • Stocks are convertible and can be traded

KGaA (Kommanditgesellschaft auf Aktien) – Partnership Limited by Stake

  • Number of partners – 2 or more – one as a general partner and one as a limited partner
  • Minimum share capital is €50,000
  • General partner is accountable without limitation
  • Limited partner is liable which is limited to only his share

Human Resources

A written contract is the most common type of contract in Germany. However, written contracts are not mandatory for employment on an indefinite period.

The statutory national holidays in Germany are:

  • April 2 – Good Friday 
  • April 5 – Easter Monday 
  • May 1 – May Day 
  • May 13 – Ascension Day
  • May 24 – Whit Monday 
  • October 3 – Day of German Unity 
  • December 25 – Christmas Day 
  • December 26 – Boxing Day 

Payroll

Payment schedules are mostly determined by employment agreements. If there is no agreement on the payment schedule, the wage payment intervals for manual workers cannot exceed one month. For other employees it cannot exceed 15 days.

Accounting

Accounting standards must adhere to German GAAP (Generally Accepted Accounting Principles).

Tax & Compliance

Tax Rate

The corporate tax rate in Germany is 15%.

Value Added Tax (VAT)

The standard VAT rate is 19% for most goods and services. 

There is also a reduced rate of 7% for some goods and services.

Data Privacy

The Federal Data Protection Act (Bundesdatenschutzgesetz) regulates the collection and use of personal data.

Anti-Bribery & Anti-Corruption Law

Bribery of public officials (Vorteilsannahme, Bestechlichkeit, Vorteilsgewährung, and Bestechung) is regulated under the German Criminal Code, Sections 331 to 338. Penalties (for individuals and legal entities) include imprisonment up to 3 years, a monetary fine, criminal penalties imposed on the company and officials, and confiscation of the received benefits.