GmbH Formation for Foreign Shareholders in Germany — A Complete Guide

Foreign Shareholders in a German GmbH

German corporate law does not generally impose nationality or residence requirements on GmbH shareholders. Foreign individuals and legal entities may hold shares in a German GmbH. Sanctions, foreign-investment-control rules, sector-specific licensing requirements and other applicable restrictions must be assessed for the specific investor, jurisdiction and business.

The acquisition of shares in an existing GmbH is a separate transaction from formation. Share transfers generally require notarial form under § 15 GmbHG. Depending on the investor, sector and size of the interest acquired, German foreign-investment-control rules under the AWG and AWV may also require review and, in certain cases, prior approval.

A residence title is not required merely to hold shares or to be appointed as managing director as a matter of German corporate law. A third-country national who intends to enter, reside or carry out operational managing-director or other gainful activities in Germany requires immigration authorisation for the relevant activity. EU and EEA nationals and Swiss citizens are generally subject to free-movement rules.

GmbH Essentials for Foreign Founders

The GmbH (Gesellschaft mit beschränkter Haftung) is one of Germany’s most widely used corporate forms for commercial activity. For the obligations of the registered GmbH, liability is in principle limited to the company’s assets; personal liability may nevertheless arise in specific circumstances, including unpaid capital contributions, personal guarantees, pre-registration activity or separate breaches of duty.

The GmbH has minimum share capital of €25,000. Before the commercial-register application is filed, at least one quarter of each cash contribution and at least €12,500 in total must generally have been paid, subject to the separate rules for contributions in kind.

The GmbH must have at least one managing director. The managing director must be a natural person with full legal capacity and must satisfy the personal eligibility requirements under § 6 GmbHG. German nationality or residence in Germany is not generally required under corporate law. The corporate appointment as managing director, immigration authorisation for activities in Germany, tax residence and the practical ability to discharge managing-director responsibilities are separate questions and must each be assessed independently.

Online Formation via DiRUG

Since 1 August 2022, GmbH and UG formations can be notarised through the official online system of the Federal Chamber of Notaries under the DiRUG framework, using a video conference with a German notary. The online formation procedure was initially introduced for cash formations. Under the current law, GmbH formations involving contributions in kind may also be notarised online where no separate formal requirement governing the contributed asset precludes completion through the online procedure. Limitations remain where the asset contribution itself requires a transaction or formality that cannot be completed online; the notary must assess the specific contribution and transaction structure.

All participants must satisfy the statutory and technical identification requirements of the Federal Chamber of Notaries’ official system. A suitable eID-capable identity document and, depending on the document, an additional passport for the digital photograph check may be required. A standard foreign passport alone will often not be sufficient. Eligibility must be confirmed with the notary in advance.

Where the transaction is eligible and all participants have suitable identification documents, the formation can be notarised and the commercial-register application submitted electronically without a physical appointment in Germany. Bank-account opening, capital payment, tax registration, trade registration where required and transparency-register notification remain separate implementation steps.

Apostille, Legalisation and Document Requirements

Foreign public documents used in the formation process may require an apostille, legalisation, another form of authenticity verification or a certified German translation, depending on the issuing country, the document and its intended use. Where both Germany and the issuing state participate in the Hague Apostille Convention and the document falls within its scope, an apostille may replace the ordinary legalisation procedure. An apostille or legalisation generally confirms the authenticity of a public document, signature or seal; it does not by itself establish that a foreign company, resolution, power of attorney or notarial act satisfies the substantive and formal requirements of German law.

Where a shareholder is represented during the formation, the power of attorney must satisfy § 2(2) GmbHG. For a power of attorney executed abroad, its notarial form, authenticity, equivalence and usability in Germany must be reviewed separately. Requirements should be confirmed with the notary before the formation process begins; starting document preparation early is strongly recommended, as apostille and legalisation processing times vary considerably by country.

UBO Registration in the Transparency Register

Under § 20 GwG, the GmbH must obtain, retain, keep current and notify the required information on its beneficial owners to the transparency register. Section 19 GwG specifies the information to be recorded. A beneficial owner is generally a natural person who directly or indirectly holds more than 25% of the capital interests, controls more than 25% of the voting rights or exercises comparable control.

Where a foreign parent company is the direct shareholder, the ownership and control chain must be traced through all relevant intermediate entities to the natural persons who ultimately control the structure. Formal share ownership alone may not capture voting agreements, control arrangements or other comparable influence. If no natural person can be identified as the beneficial owner after the required review, the GmbH’s statutory representative, managing partner or partner may have to be reported as the deemed beneficial owner under the GwG; the nature of the reported status must be stated correctly.

The notification must be made without undue delay once the GmbH is subject to the reporting obligation and the required beneficial-owner information is available. Changes must also be reported and the information kept current. The transparency register is not an unrestricted public register; access is governed by the statutory access categories, and other applicants may need to demonstrate a legitimate interest.

Foreign Parent Company Structures

Where the shareholder is a foreign company rather than an individual, the notary and registration court must be able to verify the foreign entity’s legal existence, capacity and representation. Depending on the jurisdiction and corporate form, the notary may require current register extracts, constitutional documents, certificates of good standing or existence, shareholder or board resolutions, evidence of the authority of the acting representatives and documentation of the ownership and control chain. Authentication, apostille, legalisation or certified translation may be required depending on the jurisdiction, document and intended use.

For foreign parent companies, the GmbH subsidiary structure raises questions on tax, transfer pricing and the allocation of profits and costs between the parent and the subsidiary. These matters should be addressed with a German tax adviser in parallel with the legal formation process.

Bank Account Opening

In practice, cash contributions are normally paid into an account opened for the Vor-GmbH after notarisation. German company law requires the necessary contribution to be made and placed at the managing directors’ free disposal before the commercial-register application is filed; it does not prescribe a German bank account as the only legally possible payment route. The managing directors must confirm in the commercial-register application that the required contributions have been made and are at their free disposal; suitable payment evidence should be retained.

Bank selection and KYC preparation can begin before notarisation. The account itself is normally opened after the notarised formation documents are available. Banks and other obliged entities may request information and documents concerning the ownership structure, beneficial owners, business purpose, anticipated transactions and source of funds; the exact requirements are determined independently by the relevant institution under its compliance obligations. For non-resident shareholders, additional requirements or restrictions may apply. Starting the bank account process early alongside the formation preparation is strongly recommended to avoid delays to the commercial-register application.

Combining GmbH Formation with Immigration

Share ownership, corporate appointment as managing director and immigration authorisation are separate legal questions. A foreign person may hold shares and may generally be appointed as managing director without a German residence title. Operational managing-director activity carried out in Germany requires the appropriate immigration authorisation where the person is a third-country national. A managing director who lives and performs the relevant management activities entirely outside Germany does not require a German residence title merely because the managed company is German; business travel and operational activity carried out physically in Germany must be assessed separately.

Section 21 AufenthG may apply where the shareholder-director carries out genuine entrepreneurial self-employment and the statutory business requirements are met. The classification depends on voting rights, legally secured control, shareholder instructions, the service agreement and the actual exercise of decision-making powers; no single shareholding percentage guarantees the classification. An employed managing director without genuine entrepreneurial control will generally require an employment-based residence route; § 19c(1) AufenthG in conjunction with § 3 no. 2 BeschV is specifically relevant to authorised governing-body members of legal entities.

Tax Considerations

The following points are a general description of common tax interfaces only. The corporate and shareholder tax consequences depend on the ownership chain, treaty position, financing and actual management structure and should be assessed by a German tax adviser.

The corporate income-tax rate is 15%, plus a solidarity surcharge of 5.5% on the corporate income tax. Trade tax is based on a statutory tax factor and the municipal multiplier applicable at the relevant business location; the combined effective burden therefore varies and should not be treated as a fixed nationwide percentage. These rates should be verified annually as legislative changes may affect future periods.

German-source dividends are generally subject to withholding tax of 25% plus solidarity surcharge. Relief or exemption may be available under a double-taxation treaty, the EU Parent-Subsidiary framework or German domestic provisions, subject to the applicable ownership, substance, procedural and anti-abuse requirements.

Transactions between the German GmbH and related foreign entities must comply with the applicable arm’s-length and documentation requirements and should be coordinated with specialist transfer-pricing and tax advice. The managing director’s personal tax residence and the company’s place of effective management are separate questions; cross-border management activity may create personal tax, payroll, permanent-establishment, dual-residence or treaty issues for the individual, the German GmbH or a foreign parent company.

How We Advise

We advise on the German corporate-law formation process, including the ownership structure, articles of association, notarial procedure, foreign-document requirements and corporate-law interfaces with the transparency register. Where banking, tax, immigration or foreign-law questions arise, we advise on the relevant German legal interface and coordinate with the appropriate advisers and institutions.

For detailed advisory, see our GmbH Formation for Foreign Shareholders service page and our GmbH Formation Germany service page.

Advice is provided by Alexander Kagan, admitted as a German Rechtsanwalt and a member of the Hanseatic Bar Association Hamburg (Hanseatische Rechtsanwaltskammer Hamburg). The content of this guide is general information only and does not constitute legal advice. Last updated: June 2026.

Frequently Asked Questions

The content of this guide is for general information only and does not constitute legal advice. As of June 2026.