There is a fee for the first consultation. We would be pleased to inform you about this. It is a legal requirement that an initial consultation is subject to a fee for oral or written advice or information. The assessment of the chances of success of a matter is also part of the initial consultation. In some cases, however, legal expenses insurance will cover the costs of the initial consultation, so that no additional costs are incurred by the client.

In principle, you can hire a lawyer abroad. The law of the country in which the lawyer performs his or her work applies. However, the power of attorney granted to the lawyer must be signed by the client personally and must be presented to the lawyer in the original.

If a non-EU citizen wants to set up a company in Germany, a Schengen visa is usually sufficient to complete most of the steps required to set up a company.

With a Schengen visa you can stay in Germany for 90 days within a period of 180 days. During this time, important requirements for setting up a company can be taken care of. These include the conclusion and notarisation of the articles of association, necessary registrations at the trade office and commercial register and other preparatory activities.

However, the Schengen visa only covers the foundation. If you wish to stay in Germany permanently, you must apply for a normal German visa.

If you have a residence permit or settlement permit, you can be accompanied by your family members (so-called family reunion). In the case of spouses, the marriage must generally have already existed when the residence permit was granted. If they are entitled to work, the spouse is granted this right to the same extent.

When founding a company, it must be decided which form of company is the right one for one’s own interests. A distinction is made between two forms: corporations and partnerships.

The corporation is a legal entity. It is not the partners, but the company itself that carries rights and obligations. In order to form a corporation, a certain amount of share capital must be paid up, and the company is only liable for its liabilities with this company’s assets. The partners themselves are not liable with their private assets, therefore one speaks of a so-called limitation of liability.

Corporations include the GmbH (limited liability company), the AG (stock corporation) or the UG (entrepreneurial company).

In a partnership, the active cooperation of the partners is the main focus. It must be founded by at least 2 partners. The partners are liable with their private assets, a minimum capital is not required. Partnerships include the GbR (partnership under civil law), OHG (general partnership), KG (limited partnership) or the GmbH & Co. KG.

A company must be registered in public directories. The aim here is to create legal certainty and ensure transparent processes in everyday business.

In principle, companies that carry out commercial business operations must be registered with the Commercial Register. There, information such as the company name, list of shareholders, share capital, etc. can be found.

Registration with the Commercial Register is carried out in publicly certified form by a notary public, who transmits the registration to the relevant Commercial Register electronically.

In addition, the company must be registered with the trade office.

In order to establish a GmbH, a share capital of 25,000 euros is initially required. However, for registration in the commercial register, it is sufficient if only half of this, i.e. 12,500 euros, is paid. The partners are personally liable for the other half until the payment is made.

A GmbH is founded by means of a partnership agreement, which is certified by a notary and is created by the entry in the commercial register. It is headed by a managing director. It is also possible to have a so-called one-man GmbH, in which one person is both partner and managing director.

It can also be useful to establish a branch office in Germany instead of an independent subsidiary. This option is often used to expand the business to the German market or to develop the contact to business partners or customers. A distinction is made between the independent and dependent branch

The independent branch is independent to a certain extent from the head office. It has a power of attorney to act and close accounts, its own bank account and separate accounting. It must also be entered in the commercial register

The dependent branch has no autonomy and is only a subordinate department of the main branch. It may not take part in business transactions independently and invoices must be issued in the name of the main branch. An entry in the commercial register is not necessary.

There is freedom of contract in Germany. The salary or wages can therefore in principle be freely negotiated in Germany. However, since 2015 there has been a minimum wage, which is currently 9.35 euros per hour and is adjusted at regular intervals. In addition, in some industries, collective bargaining agreements stipulate industry standard minimum wages on a generally binding basis.

In Germany, effective funding opportunities are available from the federal government and the individual federal states. These include subsidies, low-interest promotional loans, public deficiency guarantees and public participations. These can be used to finance various projects such as investments, operating resources, research or environmentally relevant projects. In the case of subsidies, the determination of the size of the company is relevant.

In Germany, companies are taxed in two stages. In the first stage, corporations such as an AG or a GmbH pay corporation tax. Partnerships such as the GbR, oHG or KG are subject to income tax. The tax rates are uniform throughout Germany. At the second level, all companies pay trade tax, which varies from municipality to municipality. On average, the tax burden is just under 30% and can be reduced by up to 23% depending on the location.

Hülya Oruc

O.Law – Attorney at Law Hülya Oruc

Goethestr. 30, 40237 Düsseldorf

Phone: +49 211 976 358-19

Fax: +49 211 976 358-24

E-mail: info@olaw.eu