If a foreign company wishes to operate in Germany, it must comply with certain bureaucratic requirements hold. Whether a Business registration or a Commercial register entry depends on the type of activity and the type of company.

1. business registration for foreign companies

When is a business registration required?

• Basic rule: Who in Germany commercially active is, a Register a business.
• This also applies to foreign companiesif they are in Germany Operating site or a Permanent representation have.
• Typical cases in which a business registration is required:
  • Opening of a Branch or subsidiary in Germany.
  • Regular business activities in Germany (e.g. services or local sales).
  • Long-term construction or assembly activities (e.g. foreign craft businesses).
• Freelancers (e.g. consultants, artists, lawyers, doctors) must do not register a businessbut only register with the tax office.

Where does the business registration take place?

• Registration takes place at responsible trade office the city or municipality in which the company operates.
• Required documents:
  • Application form from the trade office
  • Copy of passport or identity card
  • Extract from the commercial register (if the company is already registered in another country)
  • Tax number of the tax office (will be assigned after registration)

2. commercial register entry for foreign companies

Do foreign companies have to be entered in the commercial register?

• Not every company has to be entered in the commercial register.
• An entry is obligatory for:
  • Corporations (e.g. GmbH, UG, AG - also foreign GmbHs or Ltd.)
  • Larger commercial enterprises with a commercial structure
  • Branches of foreign companies that operate independently in Germany
• An entry is voluntarily for:
  • Small traders (who are not trading companies)
  • Sole trader without commercial structures

What types of branches are there for foreign companies?

1. Branch office (independent permanent establishment)

   • Runs its own business, has its own management and accounting.
   • Must enter the Registered in the commercial register become.

2. Permanent establishment (dependent branch)

   • Is legally and organizationally bound to the foreign parent company.
   • No entry in the commercial register required.

3. Subsidiary

   • An independent GmbH or UG based in Germany.
   • Must be entered in the commercial register.

Where is the entry in the commercial register made?

• Registration takes place at competent local court (register court).
• Required documents:
  • Certified extract from the commercial register from the country of origin
  • Articles of association or partnership agreement of the company
  • Proof of business address in Germany
  • Notarization the application

3. tax registration & company number

• Every company that does business in Germany requires a Tax number from the tax office.
• If employees are employed, a Company number at the Federal Employment Agency can be applied for.

4 Special obligations for foreign companies

• Value added tax liability:
  • Companies must be prepared for the Value added tax (VAT, 19%) if they generate taxable sales in Germany.
• Trade tax:
  • Companies based in Germany pay Trade taxif they have a permanent establishment.
• Minimum wage and social insurance:
  • If employees are employed in Germany, the Social security obligation and the statutory minimum wage.

What foreign companies need to consider

Business registration required if a permanent activity is carried out in Germany.
Commercial register entry necessary for branch offices, subsidiaries and larger commercial enterprises.
Tax registration at the tax office and registration for VAT.
Observe social security obligationsif employees work in Germany.
Notarizations and translations for foreign documents.