How to open a GmbH in Germany to buy property
When purchasing property in Germany, buyers have to decide if they want to register the purchase to themselves or to a legal entity after deciding on the purpose of the purchase, property type and budget. Tranio recommends registering the purchase to a GmbH (Gesellschaft mit beschränkter Haftung), which is equivalent to an LLC, if the investor is going to lease the property and it exceeding €1 million in value. This is beneficial to the buyer for a number of reasons:
- For individuals, the tax is calculated at a progressive rate ranging from 14.77% to 47.475% (including a solidarity surcharge), while for legal entities the rate is fixed at 15.825%, on condition that property leasing is the only commercial activity performed by the legal entity. An individual with an annual rental income in Germany exceeding €50,000 pays 34.27%, while a company only pays 15.825%.
- If the GmbH founder provides a loan to his/her company as an individual, the interest will be deducted from
the company'stax base, and its corporate tax amount will reduce respectively. In theory, individuals can do the same, but this will arouse suspicion with tax authorities.
German residents and
Steps to open a GmbH
1. Legal advice
- Copy of passport
- Proof of registration
If the GmbH is opened by a legal entity, it needs to provide
The founder also needs to provide information on:
- Founding members and their shares in the company
- The head of the company (the need for assistance in hiring a third party as such is to be specified)
- Company name (preparing at least three names for availability check is recommended)
- Presumable types of business activity
The lawyer usually takes two or three working days to prepare the documents.
3. Signing the agreement
The founder signs
The GmbH founder can buy property in Germany as early as at this stage, in other words, even before the company appears on the register. However, in this case, he or she will be personally and fully held liable for all obligations but not within the charter capital.
4. Opening a bank account
To open a bank account in Germany, the applicant must visit the bank personally with notarised articles of association and a passport.
It is not obligatory to open an account to deposit the charter capital at the same bank the buyer will get a property loan from.
5. Depositing the charter capital
The minimum charter capital amount for a GmbH is €25,000. Paying only half of this sum when registering the company is enough and there is no time limit for depositing the balance.
6. Company registration
The notary sends the documents to the German Commercial Register (Handelregister). It takes about four weeks from the submission of documents to be registered.
If the founder buys property after the GmbH appears on the register, the liabilities of its founding members will remain within the minimum charter capital amount. Property sellers have more trust in legal entities that are already established, and are more willing to close transactions upon receiving verification from the register.
Registration and maintenance costs
Company registration, including registration, notary and legal fees, costs
Table 1: Approximate GmbH establishment and maintenance costs
for properties priced between
€1.0–1.5 million in 2017
|Registration costs, €|
|Notary fee and state duty||1,000|
|Monthly maintenance costs, €|
|Accounting and tax reporting||200|
|Office registration fee||200|
|Nominal director services (optional)||400|
Yulia Kozhevnikova, Tranio
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