General Information on Company Formation in Germany and Whether a Residence Permit Can Be Obtained Through Company Formation

To obtain a work permit and temporary residence permit in Germany, you need to demonstrate that the business you intend to establish will serve Germany's economic interests, meet a need within the country, and that you have the financial resources to achieve your goals.

Company formations in Germany are conducted in the presence of a notary.

If the shareholders cannot come to Germany, it is also possible to establish the company through a notarized power of attorney with apostille in Turkey by a third party.

Types of companies that can be established in Germany are:

1. GmbH: GmbH stands for "Gesellschaft mit beschränkter Haftung" (company with limited liability). It is the most popular type of company in Germany.
2. UG: UG (Unternehmergesellschaft) is similar to GmbH but has lower minimum capital requirements. You can establish a UG company in Germany with a capital as low as €1.
3. KG: KG (Kommanditgesellschaft) is a limited partnership. It consists of one or more general partners and one or more limited partners.
4. OHG: OHG (Offene Handelsgesellschaft) is a general partnership. It consists of two or more partners who are jointly and severally liable for the company's debts.

How to Establish a Company in Germany:

1. Create a Business Plan: Decide on the sector in which you will operate, your goals, revenue and expenditure forecasts, and the structure of your company. This will form the basis for the subsequent steps.
2. Determine the Type of Company: The most common types of companies in Germany are GmbH (limited liability company) and AG (public limited company). Choose the one that best fits your business needs.
   • GmbH: GmbH is an abbreviation for “Gesellschaft mit beschränkter Haftung.” It is a type of business entity popular in Germany and other European countries. A GmbH is a separate legal entity from its owners, which means that in the event of insolvency, the personal assets of the owners are protected. This is one of the major advantages of establishing a GmbH. To establish a GmbH, you need a minimum capital of €25,000. Initially, you must deposit half of this amount, i.e., €12,500, into a bank account.
   • UG: UG stands for “Unternehmergesellschaft (haftungsbeschränkt),” which translates to “entrepreneurial limited company.” This type of company was introduced in Germany in 2008. The UG is similar to the GmbH but requires only €1 in minimum capital. This makes it easier for entrepreneurs with limited resources to establish a business in Germany.

Advantages of UG:

• • Lower minimum capital requirements
  • Simpler registration process
  • Same limited liability protection as GmbH

If you are considering starting a business in Germany and have limited financial resources, the UG could be a good option for you.

3. Choose a Company Name: Choose a name that fits your selected company type and register it with the German commercial register. You can check if the desired name is already in use by looking it up in the “Handelsregister.”
4. Prepare the Articles of Association: Prepare the articles of association, which should include details about the company’s purpose, organizational structure, and the amount of capital.
5. Determine the Company’s Registered Office: Set the registered office of your company and register the business address. This address will be used for business activities.
6. Apply for a Tax Number: Apply for a tax number and other necessary permits from the local tax office. Once you register your business with the Finanzamt (tax office), you will receive a tax number (Steuernummer) by mail within 2 to 6 weeks. After receiving your tax number, you are ready to operate your business in Germany. Don’t forget to include your tax number on your invoices.
7. Deposit Capital: Deposit the required capital according to the requirements. This step is necessary for company types like GmbH.
8. Register with the Commercial Register: Register your company with the commercial register. This step formally establishes your company.
9. Insurance and Permits: Obtain the necessary insurance policies and permits required for your business activities.
10. Comply with Legal Requirements: Ensure that you comply with legal requirements regarding working conditions, tax obligations, and other legal requirements.
11. Open a Bank Account: Open a bank account for your company. You will use this account for your commercial transactions.
12. Hire Employees: If needed, hire employees and arrange employment contracts. Ensure that you meet the insurance and other legal requirements for your employees.

Advantages of Starting a Company in Germany

You do not need to speak German to start a business in Germany, and there are several benefits:

1. You can start your own company without being a partner in another company.
2. You do not need to speak German to start a business in Germany.
3. By starting a business in Germany, you can obtain a residence permit for up to 3 years.
4. After staying in Germany for 3 years, you can apply for permanent residence.

By starting a company in Germany, you can obtain a residence permit. After establishing your company, you can apply for the Gewerbe (self-employment) visa offered to self-employed entrepreneurs in Germany.

The Gewerbe visa allows you to establish or run a business in Germany and is a residence permit for self-employed individuals. With this visa, you can stay and work in Germany for up to three years. After three years, you can apply for permanent residence.

For detailed information, company formation, and residence permits, you can seek consulting services from us.