Setting Up a German Company: Legal Form, Bank and Residence Permit Come First
You decided on a German company to sell to German customers or ship from a German warehouse. Weeks later nothing has moved, and the reason is rarely the step you are working on.
Opening the company is a chain, and each step waits for the one before it. Three questions come first, and they are not equally easy.
1. Which legal form
- A GmbH needs 25,000 euros of share capital, at least half paid in before registration.
- A UG can start from 1 euro, but 25% of annual profit goes into a reserve until it reaches 25,000.
A UG is a cheap start. A GmbH is usually what banks and partners take more seriously.
2. Which bank, and when
The capital has to be paid into an account before the commercial register entry, so the bank decides before the company exists. Banks ask who ultimately owns the company and where the money comes from. The more complex the ownership structure, the longer the bank takes.
Ownership documents and proof of funds are better ready before the notary appointment.
3. Where you live (if you are not an EU citizen)
A company gives you no right to live in Germany. A residence permit from another Schengen country lets you visit for up to 90 days in any 180, but not live or work here. With long-term resident status in another EU country (Daueraufenthalt-EU), you can apply for a German permit that allows self-employment if the § 21 conditions are met. Without it, the usual route is a national visa for self-employment, applied for before you move.
The § 21 conditions:
- economic interest or regional demand for the business
- a positive expected effect on the economy
- financing from your own capital or a loan commitment
- adequate pension provision, if you are over 45
The decision is discretionary, so the business plan carries the application. It is reviewed by the immigration office of the city you choose, together with local bodies such as the chamber of commerce, not by the embassy.
Note: The Opportunity Card for job seekers does not allow self-employment, and the Blue Card is built for employees.
The chain, in order
Notary → Capital → Register entry → Tax number → VAT ID
A delay at the bank moves everything after it, including the sales that depend on the VAT ID. Put the buffer on the bank step.
Whether you can run a German company from another EU country, and where it will be taxed, are questions for a tax advisor and an immigration lawyer.
Our earlier articles on the bank account checklist and German VAT cover the next two steps.
