Part B

Incorporating a New GmbH — Step by Step

From preparation through commercial register entry and post-incorporation compliance

The following outlines the standard process for incorporating a single-shareholder GmbH with a foreign shareholder.

Step 1: Preparation

Before the notarisation appointment, you must resolve the following points and gather the required documents.

a) Company name

The company name must include the words Gesellschaft mit beschränkter Haftung or a readily comprehensible abbreviation (GmbH). The name must be capable of identifying the company and must be distinctive. (§ 18 Commercial Code)

b) Registered office

The GmbH's registered office must be in Germany and it does not have to correspond to where the company administers its business. (§ 4a GmbH Act) A letter-box address, however, must satisfy minimum tax requirements, which need separate assessment.

c) Objects of the company

The articles of association must state the company's objects with precision. The Commercial Register court will reject a formulation that is too broad or substantively empty.

d) Model articles or bespoke articles of association

Single-shareholder incorporations may use the statutory model articles (Musterprotokoll), which serve simultaneously as the articles of association, the appointment of the first managing director and, where applicable, the list of shareholders.

The model articles are suitable only for simple standard incorporations. Where the shareholder requires specific provisions on shareholder rights, shareholder resolutions, transfer restrictions on shares or profit distribution, bespoke articles are necessary.

Practical note

Foreign shareholders incorporating a GmbH as an operating subsidiary should always use bespoke articles — the model articles do not contain scope of management authority or approval rights reserved to the shareholder.

Our Service

We draft the articles of association to reflect your business requirements. The result is articles that are both legally sound and tailored to your group structure.

Step 2: Notarisation of the articles of association

The articles of association of a GmbH must be notarised. The notary notarises the articles of association, the sole shareholder's subscription of the share and the appointment of the first managing director.

Where the shareholder is a foreign company, the notary verifies the authority to represent the company based on public records or the shareholder's corporate documents. Where doubts arise, a legal opinion on the relevant foreign law may be required.

Where the person appearing does not speak German, an interpreter must attend or certified translations of the documents must be provided. (§ 16 Authentication Act)

Practical note

Since 2022, § 2(3) GmbH Act permits notarisation by video link in certain circumstances. In practice, this route is unsuitable for most foreign shareholders: it requires a qualified electronic seal under the eIDAS Regulation and a European eID. Outside the EU, remote notarisation is currently unavailable. For the vast majority of foreign shareholders, personal appearance before the notary — whether directly or through an authorised representative — remains the only practicable option. Learn how to incorporate a GmbH remotely without traveling to Germany.

Our Service

We manage the notarisation appointment in full: selecting an experienced, English-speaking notary, preparing the powers of attorney, and obtaining and reviewing your foreign corporate documents. If you prefer, we can represent you at the notarisation on the basis of a notarially certified power of attorney — no travel to Germany required.

Step 3: Payment of share capital

At least half of the share capital must be paid before the application to the Commercial Register is filed, where the contributions are in cash. In practice: where the share capital is the statutory minimum of EUR 25,000, at least EUR 12,500 must be credited to the company's account before the application is filed and must be freely at the managing director's disposal. Learn about GmbH share capital contributions: cash, contribution in kind, and structuring options.

Non-cash contributions require a formation audit report and must be set out separately in the articles of association.

Each managing director must give a personal declaration — not through a representative — confirming that the contributions paid in are freely at the managing director's disposal and have not been withdrawn, for example through repayment to the shareholder, by way of security or by any other encumbrance.

Practical note

This declaration is personal and cannot be given by a proxy. A knowingly false declaration is a criminal offence (§ 82(1) no. 5 GmbH Act). The common pitfall in practice: the share capital is paid in but immediately used to meet liabilities incurred during the formation period — at which point it is no longer freely at the managing director's disposal, and the declaration would be false.

Practical note

Payment must be made to a business account in the name of the GmbH (in formation). Opening a business account can take considerable time for foreign shareholders. Start this process early and work with banks that have experience with international corporate clients.

Our Service

Account opening is typically the most time-critical step for foreign shareholders. Many banks refuse business accounts for GmbHs with purely foreign shareholders or impose extensive documentation requirements as part of their KYC (know-your-customer) process. Drawing on our practical experience, we recommend suitable banks and assist you in assembling the internal KYC documents, which typically go well beyond the notarised formation documents.

Learn about GmbH bank account requirements: KYC process, capital deposits, and foreign shareholder challenges.

Step 4: Application to the Commercial Register

The managing directors must apply to register the GmbH in the Commercial Register. All managing directors must sign this application (but can sign on separate documents) and have their signatures notarised either in Germany or in another jurisdiction (where legalisation or apostille requirements may apply). It is then up to the German notary — typically the one who notarised the incorporation — to file the application in electronic form to the competent commercial register. (§ 12 Commercial Code)

The application must include:

The articles of association in notarially certified form
The list of shareholders signed by the managing directors
The managing directors' declaration that the share capital has been paid in
A declaration by each managing director that no bar to appointment exists
Where contributions are non-cash: the formation audit report and evidence of the value of the contributions

Our Service

Assembling the application documents requires close coordination between the notary, the commercial register court and your own legal teams abroad. We take over this coordination entirely and ensure that all documents meet the court's requirements for form and translation quality — no queries, no delays.

Step 5: Registration and incorporation

The GmbH acquires legal personality on the day the commercial register court enters it in the register. The court reviews the application for formal and substantive compliance. Registration typically takes place within one to two weeks from filing a complete set of documents.

On registration, the shareholders' liability from the formation period (pre-registration liability) ceases for future obligations. Any existing shortfall is not cured retrospectively.

Step 6: Trade registration

Once the commercial register registration is complete, the GmbH must register its trade with the local trade licensing authority (Gewerbeamt) at its registered office. (§ 14 Trade Regulation Act) The trade registration triggers notification to the tax office. In many municipalities, the registration is possible online. The trade licensing authority forwards the registration to the tax office automatically; even so, contacting the tax office directly speeds up the process and helps obtain a tax number sooner, which the company needs to issue invoices.

Practical note

Without a tax number, the GmbH cannot issue proper invoices showing VAT. Foreign shareholders who want to begin trading quickly should apply to the tax office proactively — if possible by submitting the opening balance sheet at the same time.

Step 7: Post-incorporation compliance

The following compliance obligations must be met promptly after registration:

Area	Obligation / detail	Legal basis
Trade registration	Register with the trade licensing authority (Gewerbeamt) at the registered office. The authority forwards the registration to the tax office automatically; direct contact with the tax office speeds up tax number issuance.	§ 14 Trade Regulation Act
Transparency Register	Active reporting of beneficial owners (> 25% of shares or voting rights). Full-register obligation since August 2021 — a commercial register entry no longer substitutes for a Transparency Register filing. Changes must be reported without delay.	§§ 18, 20 Anti-Money Laundering Act
Tax office	Tax registration by questionnaire. The GmbH is subject to corporate income tax, the solidarity surcharge and trade tax.	§ 138 Fiscal Code; § 1(1) no. 1 Corporate Income Tax Act; §§ 2, 11 Trade Tax Act
Accounting	The company must keep proper accounts and prepare and publish annual financial statements with the Federal Gazette.	§ 41 GmbH Act; §§ 238, 264, 325 Commercial Code

Practical note — Transparency Register

A beneficial owner is anyone who directly or indirectly holds more than 25% of the shares or voting rights, or exercises equivalent control (§ 3(2) Anti-Money Laundering Act). Where no natural person meets this threshold, all managing directors must be reported as notional beneficial owners (§ 3(2) sentence 5 Anti-Money Laundering Act). Required data: full name, main residence, date of birth, all nationalities and the nature and extent of the economic interest as a percentage (§ 19(1) Anti-Money Laundering Act). Violations carry fines (§ 56(1) no. 55 Anti-Money Laundering Act).

Our Service

Identifying the beneficial owner in multi-tier international group structures is legally demanding and error-prone. We analyse your ownership structure, file the initial report and, if you wish, set up an ongoing monitoring service to ensure that any changes — address, ownership percentage, name change — are reported without delay.

Alternatively, explore Part C: Acquiring a Shelf Company for a faster route.

For legal context, review Part A: Legal Framework, Liability and Incorporation.