Businessmen who are interested to set up a subsidiary in Germany can receive assistance for the incorporation procedure from our team of German company registration representatives.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | The parent company must respect the foreign country's legislation |
Best used for | The subsidiary can be used for trading, commercial, and industrial activities |
Minimum share capital (YES/NO) | Yes, depending on the chosen entity, EUR 25,000 (for private limited liability companies), and EUR 50,000 (for public companies). |
| Time frame for the incorporation (approx.) | Approx. 5 weeks |
| Documents to be filed by the parent company | – Articles of Association for the subsidiary; – information about the parent company; – proof of German legal address; – bank account reference; – proof of share capital. |
| Management (Local/Foreign) | The company must have at least one manager resident or non-resident |
| Legal representative required (YES/NO) | Yes, a legal representative must be appointed to act as a liaison with the Trade Register in Germany |
| Local bank account (YES/NO) | Yes, a German subsidiary must have a local bank account |
| Independence from the parent company | The subsidiary company is completely independent |
| Liability of the parent company | The parent company is not liable for any of the subsidiary's debts or other obligations |
| Corporate tax rate | 15% + a 5.5% solidarity surcharge |
| Annual accounts filing requirements | Annual returns must be filed by July 31st of the current year for the past one |
| Possibility of hiring local staff (YES/NO) | Yes, German subsidiaries are allowed to have local staff |
| Travel requirements for incorporating branch/subsidiary (YES/NO) | No, the procedure can be handled by our company formation agents in Germany |
| Double tax treaty access (YES/NO) | Yes, Germany has more than 70 double tax treaties worldwide |
| Legal forms available for registration | A subsidiary can be set up as a private or public limited liability company. |
Legal status | A subsidiary has the legal status of a German/domestic business. |
VAT registration upon incorporation required (YES/NO) | No, the subsidiary is not required to register for VAT immediately following company registration. |
| EORI registration requirements (if any) | The subsidiary can apply for an EORI number at any time it starts its operations abroad. |
| Tax registration requirements | Within 4 weeks from incorporation |
| Access to owning German property (YES/NO) | Yes, a German subsidiary can hold property. |
| Special licenses required (YES/NO) | Depending on the activities to undertake, special business permits may be required. |
| German legal address required (YES/NO) | Yes, this is a mandatory condition for setting up a company in Germany. |
| Activities permitted in relation to the parent company | The subsidiary can complete any type of activity in Germany. |
| Restrictions (if any) | There are no restrictions related to launching or operating a subsidiary company. |
| Employee transfer possibility (YES/NO) | Yes, it is possible to transfer employees from the parent company's headquarters to Germany. |
| Requirements to register for employment/social security purposes (YES/NO) | Yes, a subsidiary must register for both upon hiring employees. |
| Corporate tax applicability | Worldwide income |
| Advantages of a German subsidiary | – freedom to complete any activity; – access to tax rebates, deductions, and subsidies; – domestic business treatment; – easy to set up. |
| Incorporation services availability (YES/NO) | Yes, we are at your service if you want to set up a subsidiary company in Germany. |
Table of Contents
What are the characteristics of a German subsidiary?
Here they are:
- it is an independent business from the parent company;
- it can undertake any type of activity independently from those of the parent company;
- from a taxation point of view, it is treated as a domestic company;
- it can make its own decisions;
- it must comply with German regulations;
- it can own assets in Germany.
What types of companies can open subsidiaries in Germany?
Both local and foreign businesses.
What are the legal entities under which a company can set up a subsidiary in Germany?
The German subsidiary can be incorporated as:
- private limited liability company;
- joint stock company;
- partnership limited by shares.
NOTE! The private limited liability company is the preferred legal entity by both local and foreign companies in Germany.
We also have an infographic on this subject:
What are the types of subsidiaries I can expand my business under in Germany?
You can choose between:
- the wholly owned subsidiary, where the parent company is the only shareholder;
- the joint venture subsidiary, where the parent company (usually a foreign one) enters a partnership with a German business (this when a partnership limited by shares can be used).
What are the steps to open a subsidiary in Germany?
Starting a German subsidiary company is the same as starting any other domestic enterprise, as foreign businesses must use local legal forms for their activities. The steps to complete in this case are:
- obtaining a German business address;
- when establishing a subsidiary in Germany, choosing the appropriate legal entity type is essential, and from this point of view, private and public companies are the most employed;
- getting a company name reserved with the Commercial Register;
- opening a bank account with a local bank is mandatory when setting up a German subsidiary;
- drafting all the essential and required documentation for the German subsidiary;
- registering the company with the Lower Regional Court of Germany in the Commercial Register;
- registering the company with the German tax authorities.
What are the documents required to set up a subsidiary in Germany?
- for the establishment of any commercial or industrial exploitation, a statement of existence must be submitted to the Trade Register;
- a statement of creation to the financial administration;
- a declaration for registration to the local statistics office;
- an application for registration with the local labor office, if workers are hired.
- a statement to the Social Security authorities and the appropriate professional organization.
It should be mentioned that specific authorizations or business licenses may be needed for some types of operations in Germany (such as transportation, real estate, and security agencies).
What is the minimum capital to open a subsidiary in Germany?
You need to respect the minimum capital requirements of the German legal structure you use. Specifically:
- for a private limited company, you need at least EUR 25,000, out of which at least 50% must be deposited before completing the company formation procedure in Germany;
- for a joint stock company, you need at least EUR 50,000;
- there is no minimum amount imposed for a partnership limited by shares.
How long does it take to register a subsidiary in Germany in 2026?
The registration with the German Commercial Register takes about a month to complete if all documents are in order.
Here is also a video on the subsidiary opening process:
How are German subsidiaries taxed?
It is important to know that the foreign subsidiary will fall under the rules and regulations imposed for any other type of company operating in the local market, which means that the company will have to register for the following taxes:
- corporate tax;
- trade tax;
- value-added tax.
Our company formation specialists in Germany can explain how subsidiaries are taxed in 2026.
Businessmen who want to receive further information on the procedure of opening a subsidiary in Germany can address our team of German company incorporation agents for assistance.