What legal form is best for my business?

Anyone wishing to conduct business in Germany can either set up a stand-alone German branch or a straightforward dependent representative office.

Representative office

The dependent representative office is often chosen by foreign companies as a way in. Representative offices are frequently offices set up just to observe the market and pave the way for initial customer contacts. A representative office is not entitled to conduct independent business transactions. It may only provide information or consulting services. Transactions must therefore be handled by the parent company in the home country. The representative office is nevertheless an inexpensive way of taking the first step towards locating to Stuttgart.

Branch

The GmbH is the most suitable legal form for branches of foreign companies. Liability is limited to the paid-in capital of 25,000 euros. Once this capital has been paid in, it may be used in its entirety for business operations. The GmbH is entered in the commercial register.

Founding a GmbH

To found a GmbH, the following documents are required:

  1. Original certificate of registration for the parent company with a certified German translation.
  2. Statement signed by the parent company owners (partners) confirming the start-up of a company in Stuttgart; the future managing director must be mentioned by name.
  3. If not all the partners can be present in Stuttgart: power of attorney is conferred on an authorised representative to receive the paid-in capital of the new company.

Other legal forms

Other legal forms for companies exist in addition to GmbH. The foreign investors' guide from "Invest in Germany" provides a good overview. What form is best suited to your company is something that needs to be decided on an individual basis. We therefore recommend you engage the services of a lawyer.

Investors guide in the web:
www.invest-in-germany.de

Business registration

In the case of a branch, it is obligatory to register the business, and it is advisable in the case of a representative office.