Legal Advisory for International Companies
International companies expanding into Germany face German corporate, immigration, employment and commercial requirements. We advise on market entry, director residence permits, employment law and ongoing corporate counsel, in German and English.
Contents
Establishing a German Presence
An international company expanding into Germany can establish a legal presence in several forms: a wholly owned GmbH subsidiary, an Aktiengesellschaft, a branch office (Zweigniederlassung) or a representative office. The GmbH subsidiary is the most common form for operational activities. It is a separate legal entity, requiring articles of association, a managing director, minimum share capital of € 25,000 and commercial-register filing. A branch office of a foreign company is not a separate legal entity and carries different liability and registration requirements. A representative office can carry out preparatory and auxiliary activities but not commercial transactions. Further detail is on our GmbH formation page and GmbH for foreign shareholders page.
Residence Permit for the Managing Director
If the managing director of a German subsidiary is a non-EU national, a residence permit is required. The appropriate route depends on the director’s shareholding and actual entrepreneurial role within the business. A director who is also a substantial shareholder and exercises genuine entrepreneurial control may apply under § 21 AufenthG; a director appointed in an employment capacity without that degree of entrepreneurial control typically requires an employment-based permit, in particular under § 19c(1) AufenthG in conjunction with § 3 no. 2 BeschV. In both cases, the application must demonstrate adequate business substance in Germany. Further detail is on our managing director residence permit page.
Employment Law for International Companies
A German subsidiary must comply with German employment law for all employees. Employment contracts must be documented in compliance with the NachwG. Written form is required for certain terms, including the termination of employment relationships under § 623 BGB. Since 1 January 2026, employers recruiting third-country nationals residing abroad for work in Germany must provide the information required by § 45c AufenthG no later than the first day of work. Collective bargaining agreements may apply depending on sector and company affiliation. Employees seconded from the parent company may have additional compliance obligations under the Posted Workers Act (AEntG). Dismissal protection under the KSchG applies once the relevant headcount threshold is reached.
Commercial Contracts Governed by German Law
Contracts with German customers, suppliers and commercial partners are governed by German law unless another law is validly chosen. Standard terms (AGB) for use with German business partners must comply with §§ 305 ff. BGB, which imposes stricter controls on standard-form terms than many common-law jurisdictions. International sale of goods contracts may be subject to the CISG unless expressly excluded. Choice-of-law, jurisdiction and dispute-resolution clauses require careful consideration when entering German commercial contracts. Further detail is on our commercial contract law page and international contracts page.
Ongoing Corporate Counsel
Once established, a German subsidiary requires ongoing corporate administration: annual shareholder meetings, managing-director changes, capital measures, commercial-register filings, contract reviews and advice on governance and compliance questions as the business grows. We advise international companies that prefer a consistent legal point of contact across corporate, employment and commercial disciplines.
Advice by Alexander Kagan, Attorney at Law, admitted to the Hanseatic Bar Association Hamburg.
The contents of this page are for general information only and do not constitute legal advice. A mandate is established only upon express acceptance.
FAQ — Legal Advisory for International Companies
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The GmbH subsidiary is the most common form for operational activities — it is a separate legal entity with limited liability. A branch office is not a separate legal entity and carries the liability of the parent. The appropriate form depends on the scope of planned activities, tax considerations and financing requirements.
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Yes, if the managing director is a non-EU national. The route depends on shareholding and actual entrepreneurial role. Substantial shareholder-directors may apply under § 21 AufenthG; directors in an employment capacity typically require a permit under § 19c(1) AufenthG.
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German employment law applies in full: NachwG documentation, written form requirements under § 623 BGB, KSchG dismissal protection and § 45c AufenthG information obligations for third-country national employees from 1 January 2026. Seconded employees may also fall under the Posted Workers Act.
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The CISG applies automatically to international sale of goods contracts between parties in different contracting states unless it is expressly excluded. Domestic German contracts are subject to the BGB. Standard-form terms (AGB) must comply with §§ 305 ff. BGB.
International Companies — Request Advice
Expanding into Germany involves corporate, immigration, employment and commercial requirements that interact. Early legal advice prevents structural problems and ensures compliance from day one.
