What the American investor should know about German incorporation
If you are a US resident considering German incorporation, you no doubt have a lot of questions. Your biggest concerns will probably be in the areas of asset and capital protection and taxes, but you will probably have some other specific questions which are unique to the type of business you want to set up. Perhaps you desire to open a subsidiary branch of an existing American company. Then it is important that you understand you simply need to register the branch corporation with the local trade office and commercial register in Germany. And since all legal and tax matters are the responsibility of the parent company, you don’t end up in a dreaded double tax situation.
And if that the branch office you open will require staffing, Germany has a long-standing and well-earned reputation for excellence in most industrial areas thanks to on the job apprenticeships and extensive technical training. Particularly in the Ruhr and Eastern part of the country, where unemployment is higher, access to highly trained labor provides excellent staffing opportunities.
For the American investor looking to open up a smaller physical or paper corporate presence, the least regulated form of German incorporation is the sole proprietorship, which is also the easiest to set up. Registration again requires listing in the commercial register and local trade office, and any profits are subject to German personal income tax rates as opposed to corporate levels.
And for those American investors who don’t care what city or sector their German company is incorporated in, the German government offers substantial grants and loans of up to 50% of your capital investment. This allows you to obviously minimize the amount of capital you need to incorporate, and creates a vested interest on Germany’s part in assuring the success of your operation.
Those American investors whose predominant goal is liability limitation abroad, Germany provides an excellent answer in their Limited Liability Corporation (GmbH). Aside from limiting your personal and corporate liability, a GmbH allows for a minimum number of one shareholder to be listed. This allows an individual to incorporate in a limited liability situation, and access the corporate tax and asset protection benefits offered this type of business structure which are not usually afforded to the individual.
Germany has long had a reputation as a highly structured country, and their business atmosphere is no different. That is why it is tantamount to involve a seasoned German incorporation specialist that employees local German accountants and businessmen and women to handle your corporation formation. So if you are an American investor seeking a German business presence, contact your German incorporation specialist today, get all your questions answered, and you can be benefiting from a well-planned German corporate strategy sooner than you may have thought possible.
For more information about German incorporation visit our friends at openaeuropeancompany.com
