Reporting obligations for managing directors from abroad

When a foreign managing director in Germany, he must fulfill certain Reporting obligations must be observed. These depend on whether the managing director lives in Germany or only manages one company. The most important duties concern the Commercial register, tax authorities, social security and residence law.

1. commercial register notification (obligation to register)

Mandatory: Every managing director of a German GmbH, UG, AG or OHG/KG must enter the Commercial register be entered.

Information required for the commercial register:

• Name and date of birth
• Residence (even if abroad)
• Scope of the power of representation
• Notarial registration of the appointment of the managing director

Attention: Without an entry in the commercial register, the managing director is legally incapable of acting.

2. tax reporting obligations

Mandatory: If the managing director in Germany Taxable income has, he must register with the Register with the tax office.

When is the managing director liable for tax in Germany?
-For his Domicile or habitual residence in Germany has
-If he Managing director's salary from a German company
-Falls he in Germany an employment contract as managing director has

Taxes for managing directors:

• Income tax (14-45 %, if taxable in Germany)
• Social security contributions (if employed in Germany)

Tip: If the managing director only works in Germany occasionally, he can remain liable for tax in his home country.

3. business registration (if necessary)

Mandatory: If the managing director carries out a commercial activitythe company must be registered with the Trade office registered be.

Attention: GmbHs or UGs have an automatic business registration, sole traders and freelancers have to do this themselves.

4. social insurance & registration with the health insurance company

Mandatory: If the managing director is employed in Germany or lives here, he must register with the Social security & health insurance log in.

Obligation to pay social insurance:

• If the managing director employed is (classic managing director with salary)
• If he does not Majority shareholder of the GmbH is

Exceptions: If the managing director more than 50 % of the GmbH shares holds, he is considered independent and must take out private insurance.

5. residence & work permit for non-EU citizens

Mandatory: If the managing director is from a Non-EU country comes, he needs a Residence permit for the exercise of a self-employed activity.

Steps for a work permit:
Application for a residence permit for self-employed persons or business managers
-Proof of company foundation and capital
-Approval by the foreigners authority

EU citizens do not require a special residence permit.

6. obligation to register with the residents' registration office (if resident in Germany)

Mandatory: If the managing director lives in Germany, he must register within 2 weeks after entry register with the residents' registration office.

Necessary documents:

• Passport
• Rental agreement or proof of ownership

If the managing director only enters the country occasionally and does not have a place of residence, no registration is required.

7. penalties for non-compliance with reporting obligations

Missing entry in the commercial register → Penalties of up to 5.000 €
Undeclared taxable income → Tax arrears + interest on arrears
Unreported social security contributions → Fines & additional payments
Illegal management without a residence permit → Expulsion procedure for non-EU citizens.