Company Formation in Germany for Foreigners (2025 Step-by-Step Guide)

Germany is Europe’s largest economy and one of the most attractive destinations for international entrepreneurs looking to start a business. Its strong legal framework, access to the EU market, world-class infrastructure, and a reputation for stability make it ideal for foreign investors.

In this complete guide, we’ll walk you through how to legally and successfully form a company in Germany as a non-resident or foreigner in 2025. We cover everything—from choosing the right business structure to opening a bank account and registering your business.

Why Start a Business in Germany?

Germany ranks among the world’s top 10 countries for business setup, especially for industries such as:

• Tech & Innovation

• Manufacturing

• E-commerce

• Consulting

• Finance and Real Estate

Key Advantages:

• Access to over 450 million EU consumers

• Transparent and strict but fair legal system

• Highly educated labor force

• Government support for startups

• Excellent transport and logistics networks

Can a Foreigner Set Up a Company in Germany?

Yes. Germany fully allows foreign nationals and non-residents to establish and own companies—whether you’re an EU citizen or not. The process is streamlined but must follow formal legal steps.

Legal Business Structures in Germany

When forming a company, the most common types for foreign investors are:

Step-by-Step Guide to Company Formation in Germany (2025)

Here’s how to legally start your company in Germany as a foreigner:

Step 1: Choose the Right Business Type

Most foreigners choose either:

• GmbH: Ideal for tech startups, e-commerce, and long-term ventures

• UG: Budget-friendly entry model with only €1 capital required

• Freelancer/Sole Proprietor: If you offer services like consulting, writing, etc.

If you plan to limit your liability and attract clients/investors, GmbH is the most professional option.

Step 2: Choose a Unique Company Name

Your company name must:

• Be unique in Germany

• Include the business structure (e.g., “GmbH”)

• Not violate trademarks

Use the Handelsregister (Commercial Register) or consult a German lawyer to check name availability.

Step 3: Draft Articles of Association (Gesellschaftsvertrag)

For GmbH/UG, you must prepare:

• Company charter

• Shareholder structure

• Capital contribution details

• Legal address

This document must be notarized during the registration process.

Step 4: Deposit Share Capital in a German Business Bank Account

Before registering, you must open a business bank account in Germany and deposit:

• €25,000 for GmbH (can be split among founders)

• €1+ for UG

Some of the best banks for foreigners include:

• N26 Business

• Deutsche Bank

• Holvi

• Wise Business (for international transfers)

Note: Your notary will require proof of capital before proceeding.

Step 5: Notarize Incorporation Documents

You and all shareholders (or legal representatives) must appear before a German notary to:

• Sign the company formation agreement

• Submit passport copies

• Provide capital deposit certificate

If you’re abroad, a power of attorney can be issued to a local representative or lawyer.

Step 6: Register with the Commercial Register (Handelsregister)

After notarization, the notary will file your documents with the Handelsregister. Once approved:

• You receive a commercial register number

• Your company becomes legally valid

This process usually takes 1–2 weeks.

Step 7: Register with the Tax Office (Finanzamt)

Within days of company approval, you must:

• Register for a Tax Number (Steuernummer)

• Register for VAT (Umsatzsteuer) if applicable

• Start contributing to corporate tax, trade tax, and VAT

For freelancers or sole proprietors, this is done directly with the local Finanzamt.

Step 8: Register with the Trade Office (Gewerbeamt)

Depending on your industry and location, you may also need to register your business activity with the Gewerbeamt (Trade Licensing Office). This is required for:

• Retail

• Online shops

• Real estate

• Transport/logistics

You’ll receive a Gewerbeschein (trade license) upon approval.

Timeline for Company Formation in Germany

Total estimated time: 3–4 weeks

Costs of Starting a GmbH in Germany

Ongoing Business Obligations

Once registered, your company must comply with German law:

• Maintain proper bookkeeping

• Submit annual financial statements

• Pay corporate tax (15%) + trade tax (7–17%)

• Handle VAT filings

• Provide social insurance for employees

Can You Run a German Company Remotely as a Foreigner?

Yes, you can. Many non-resident founders:

• Appoint a local managing director (Geschäftsführer)

• Use virtual offices for business address

• Open online bank accounts

• Use digital accounting and payroll services

However, a legal business address in Germany is mandatory for registration.

Frequently Asked Questions (FAQs)

Can I start a company in Germany without living there?

Yes, but you’ll need a local representative or lawyer to handle registrations and attend the notary process if you’re abroad.

What is the difference between GmbH and UG?

GmbH requires €25,000 in capital and is seen as more professional. UG is a mini version with only €1 capital but must save profits until it becomes a GmbH.

Is there a fast-track company formation process?

Some service providers offer express formation packages and handle all paperwork, bank account setup, and notary bookings for you.

Final Thoughts: Why You Should Register Your Business in Germany

Germany offers unmatched access to the European market, legal protection, and tax efficiency for business owners. With just a few weeks of planning and the right support, you can set up a GmbH or UG in Germany—even if you live abroad.

Whether you’re an African entrepreneur, a tech founder, or a remote consultant, forming a company in Germany in 2025 is one of the smartest moves for long-term success.