Establishing a GmbH

Establishing a GmbH has several advantages. For example, in Germany people are generally more likely to do business with a German company than with a Dutch company, as German law automatically applies.
Another advantage of a GmbH is risk reduction. With a GmbH you transfer the “German” business into its own entity, which does not directly influence the results in the Netherlands. Will the GmbH unexpectedly run into problems? Then the Dutch company remains “out of harm’s way”.

The staff of a GmbH also has various tax advantages compared to the staff of a Dutch BV and German labor law is in some respects more flexible than Dutch labor law.

As indicated, the GmbH can be compared to a Dutch BV. What are the most important characteristics of a GmbH?

• A GmbH is founded by one or more partners. These can be natural persons or legal entities. Foreign companies can also be partners in a GmbH.
• You have a great deal of flexibility when drawing up the articles of association.
• To establish a GmbH, you must engage a notary. You must also register the GmbH in the commercial register.
• The minimum capital of a GmbH is € 25,000. Half of this must be paid upon incorporation. A contribution in kind (such as real estate or a machine) is possible. It is also possible – but much less common in Germany – to set up a UG (a kind of mini-GmbH with a minimum capital of € 1). However, this is not welcomed by German partners. It is actually assumed that serious parties when setting up a GmbH are able to deposit the capital of € 25,000.
• If the capital contribution has been fully paid up, the partners of a GmbH are in principle not liable to creditors. Has the capital contribution not been fully paid up? They are then liable up to the amount of the capital contribution.
• A GmbH has various bodies: the Geschäftsführer (director), the Gesellschafterversammlung (General Meeting of Shareholders) and – not mandatory for smaller GmbHs – the Aufsichtsrat (comparable to the supervisory board).
• A GmbH is obliged to appoint a natural person as director. Just like in the Netherlands, this director may be personally liable in certain cases. In Germany this liability extends further than in the Netherlands.
• A GmbH must draw up a balance sheet and publish its annual accounts.

The specialists at Heisterborg International are happy to advise you. We also help you set up the GmbH, also when it comes to the practical implementation. For example, if you do not have a German address – a requirement for establishing a GmbH, among other things – you can establish the company with us through a registered office agreement. We can also take care of the accounting for you, hire the first employees together with you, draw up employment contracts and take care of the payroll administration.