Germany is the economic heart of the EU. Low interest business lawns are available. Monetary aid for investments in East Germany. Double Taxation agreements with over 90 countries.
Limited liability company (Gesellschaft mit beschränkter Haftung - GmbH):
The German limited liability company is the most common type of business because it can be set up by one person who can act as owner and shareholder at the same time and does not need to be resident or citizen. The minimum share capital of a German limited liability company is 25,000 euro. At least 12,500 euro must be deposited in a bank account when registering the company with the Register of Commerce in Germany.
Joint stock company (Aktiengesellschaft - AG):
The German joint stock company is a public limited liability company that is allowed to list its shares on the stock exchange. The minimum share capital for a joint stock company in Germany is 50,000 euro. The German joint stock company can be set up by one shareholder, but it requires a supervisory board made of at least three members and a management board made of at least one member.
Taxation:
- standard VAT rate is 19%, but there is also a reduced rate of 7% for certain goods and services
- corporate tax is set at 29.58%
- dividend tax is set at 25% for individuals, while legal entities benefit from a 40% exemption according to the Tax Act of 2009
- resident companies are taxed on their worldwide income
- nonresident company is only taxed only on their German derived income
- corporations are entitled to 95% exemption on the taxation of their dividend income
- dividends to a foreign company are subject to withholding tax of 26%
Accounting obligations:
- a small firm needs to produce a balance sheet and related notes
- a medium-sized firm needs to produce a balance sheet, profit and loss statement, related notes and a management report – all reports must be audited
- a large firm needs to produce a balance sheet, profit and loss statement, related notes and a management report - all reports must be audited