Introduction to setting up a German subsidiary
Germany has a central location in Europe as well as a strong economy which makes it conducive to business. Trade and commerce in the country is regulated by the Commercial Code (HGB) and the Civil Code (BGB). Foreign subsidiaries are treated equally with domicile companies but special authorisation may be required for particular trades.
What are the main formalities of a German subsidiary?
- The minimum share capital required for a GMbH is €25,000
- The Memorandum & Articles of Association of the subsidiary
- The resolution of the parent company detailing its decision to form the subsidiary
Registration of the subsidiary requires the above documents to be filed with the German Commercial Register.
All required documentation must be officially notarised.
What are the accounting requirements of a German subsidiary?
Registration of the subsidiary with its local Tax Office is required for taxation purposes. This can be completed online through the Federal German Fiscal Authority’s Form Management System (FMS).
Tax declarations for the payroll and VAT of the subsidiary must be filed. In the founding year, VAT accounts must be submitted monthly – in the following years periodic returns are dependent on the annual turnover – and an annual declaration must be made at the end of the year.
The Tax Office determines advance payments from the amount of profit mentioned at registration and tax returns are generally due by May 31 of the following year.
A German special savings bank account must be set up to deposit the required share capital next to a normal checking account.
Please visit our partners Accountancy In Europe for further information on accountancy services and tax rates in Germany.
Subsidiary Formation Packages
Our subsidiary formation packages include services such as setting up a bank account and registering for VAT. We are expertly experienced with the requirements of European formation and can organise the entire process. You need not look any further to incorporate your German subsidiary; our team will proficiently manage every aspect so that you can enjoy all the benefits the country has to offer.
Please contact us using the form below for further information on German subsidiaries.