What Is It Like Setting Up A Company In Germany Like A Foreigner?

Are you thinking of forming a company in Germany? As you are not an expert in handling the legalities of doing business in another country, it is always a good idea to hire an employer of record in Germany. They are experts in helping you set up the companies keeping all the intricacies of local and foreign investment law in mind. Even though Germany is one of the most open countries to open your business but there is always that different piece of rules and regulation which you might not have any idea about.

So here is a quick guide to give you a feel what it would be like setting up a company in Germany.

1. Legal Matter

LLP is not allowed for foreign citizens and therefore they can open a GMBH company. One of the shareholders can register a new LLC (GMBH) as one of the requirements. In order to form a GmBH, you need to rent an office space in a commercial complex as your local address. The tenancy agreement needs to be at least for a year along with a notary. This whole registration process takes somewhat 3-4 weeks to complete.

1. Investment Capital

According to the law, each promoter needs to show capital in Euro 25000. You need to show minimum of Euro 12500 at the time of the bank account opening. The rest of the amount can be adjusted next year.

1. Business Plan

This is one of the most important parts of setting up the company. Having a sound business plan as well as a repository of investment for the next 5 years is a good idea before starting or expanding the business in Germany. This will help you keep a buffer for any surprises that comes your way while running a business or at the beginning with all the rules and regulations of the country. Look for professional help that can help you end to end right from finding an economical office space to the opening of the bank account to further running your business once it is set up and running.

1. Competitors Analysis

The next important thing to know is the competition already existing in the country. This is always a good idea before you enter the unknown waters and try to set up or expand your business in Germany. Know your competitors in detail and check their price rate and service quality before you decide to launch your business. Its always good to test the market before you go full-fledged into it.

1. Language

Another major thing to consider is the language. Some major business cities in Germany are Munish, Frankfurt, Berlin, and Hamburg. The German language can make many foreigners uncomfortable at every step of your business setup. This is where professional help could be immensely important. Their workforce is fluent in the local language and gets your work done ten times faster than the time you would have taken to do it.