What Types of Legal Entities Exist in Germany?
German corporate law offers a broad range of legal forms for entrepreneurial activity. The choice of a suitable legal entity depends on a variety of factors, including liability exposure, capital requirements, tax considerations, and the size and scope of the business. The most common legal forms include:
1. GmbH – Company with limited liability
The most common type of limited liability company in Germany with limited liability for the shareholders. Minimum share capital: €25,000. Suitable for small and medium-sized enterprises as well as international investors.
2. UG (limited liability) – Entrepreneurial Company
The "Mini GmbH". Formation with a smaller share capital is possible. Obligation to retain profits up to €25,000 share capital. Popular among start-ups.
3. AG – Public Limited Company
Suitable for large companies or publicly listed corporations. Minimum capital: €50,000. Strict corporate governance rules with a management board and supervisory board.
4. OHG – General Partnership
Partnership with at least two partners who are jointly and severally liable with their personal assets. No minimum capital requirement.
5. KG – Limited Partnership
At least one unlimited liability partner (general partner) and one limited liability partner (limited partner). Commonly found in the middle class and real estate sector.
6. Limited Partnership with a Limited Liability Company
The GmbH acts as a limited liability partner. A combination of the tax advantages of the KG and the limited liability of the GmbH.
7. PartG – Partnership Company
For freelance professions (e.g. lawyers, tax advisors, doctors). Can be registered as a limited liability partnership (PartG mbB) with limited professional liability.
8. Registered Association (e. V.)
Non-profit organisational form, e.g. for cultural or social purposes. Charitable status is tax-advantaged.
9. Foundation
Legal form for the permanent allocation of assets to a specific purpose (e.g. charitable or family-related).
10. Sole Proprietorship
Simplest form of entrepreneurship. No start-up costs or capital requirements, but unlimited personal liability.
Can We Assist You with Company Formation in Germany?
Yes, absolutely. Starting a business in Germany involves a range of complex legal considerations. Selecting the appropriate legal form, structuring a legally sound shareholder agreement, and fulfilling commercial and tax law requirements are all essential. For foreign founders, additional challenges may include immigration, foreign trade regulations, and compliance with local administrative procedures.
Whether you are launching a technology-focused start-up, planning to work as a freelancer, entering the German market as a foreign investor, or transforming a business idea into a suitable legal structure, our law firm offers comprehensive legal guidance throughout the entire formation process.
We advise you from the initial legal assessment to the tailored selection and structuring of the optimal legal form (e.g. GmbH, UG, GmbH & Co. KG, AG, GbR, or the establishment of a branch office), and we handle the notarial certification, tax registration, and commercial register entry. We also represent you before the relevant authorities and support you in obtaining necessary permits and regulatory approvals. If desired, we coordinate with notaries, tax advisors, and other professionals involved in the process.
Please feel free to contact us for an initial consultation or to formally engage our services. We are here to support you with commitment, competence, and attention to detail.
How is a GmbH established in Germany?
Establishing a GmbH in Germany starts with a notarial appointment where the articles of association are certified and the managing director is formally appointed. However, the company can only be registered with the commercial register once certain practical steps have been completed.
Specifically, a business bank account must be opened, and the share capital must be fully deposited by the shareholders. Only then can the notary proceed with the registration of the company.
We offer tailored services for international clients, allowing for a seamless formation process without the need to be physically present in Germany. Feel free to reach out to us for details.
Can I Obtain a Residence Permit in Germany as a Foreign Investor — Including for My Family?
In principle, yes. Under certain conditions, foreign investors may be granted a residence permit under Section 21 of the German Residence Act (AufenthG) for the purpose of self-employment. Whether a permit will be granted in your individual case depends on a number of factors. In addition, spouses and minor children may qualify for residence permits under the family reunification provisions of Sections 29 et seq. of the Residence Act.
As part of the so-called business immigration procedure, the competent immigration authorities will assess whether there is an economic interest or regional need for the planned business activity, whether it is expected to have a positive economic impact, and whether the project is sufficiently financed through equity or a binding loan commitment. These requirements are set out in Section 21 (1) sentence 1 nos. 1–3 of the Residence Act and vary depending on the location, business model, and investment volume. Authorities also assess the personal qualifications of the applicant and may apply industry-specific licensing rules.
Our firm specializes in business immigration and has extensive practical experience advising and supporting foreign entrepreneurs, including those residing outside the European Union. We assist with all aspects of the visa and residence permit process, including preparation of a sound and persuasive business plan, legal documentation of the investment, communication with immigration authorities, and, where required, coordination with German embassies and consulates abroad. We also represent the interests of your family members and provide full legal support in family reunification procedures.
Whether you are acting as an investor, founder, shareholder, or managing director, we ensure that your residence status is applied for and granted efficiently, lawfully, and securely.
Please feel free to contact us for a personal consultation. We provide expert legal support with an interdisciplinary approach and international perspective.
Our aim is to provide timely and effective solutions that are tailored to your needs.
Can I obtain a residence permit in Germany as a managing director?
Yes, as the managing director of a GmbH, it is generally possible to apply for a residence permit in Germany. A key factor is the extent of your ownership interest in the company.
If you are both the managing director and the majority shareholder, a residence permit for the purpose of self-employment may be appropriate. In this case, the focus is on your entrepreneurial activity.
If, however, you hold no shares or only a minority stake, your role is typically considered to be that of an employee under an employment contract with the company. In such cases, a residence permit for the purpose of employment may be sought.
Regardless of which type of permit is pursued, the immigration authorities will also consider whether the managing director position qualifies as an executive role within a legal entity. In such cases, the Employment Regulation may apply, potentially affecting the applicable requirements or offering certain facilitations.
Feel free to contact us or schedule an initial consultation.