Guide to Setting Up a Company and Entrepreneurship in Germany 2026

Setting up a company in Germany, the economic locomotive of Europe and one of the most disciplined commercial ecosystems in the world, is not merely opening a business. This move means entering the global market with the prestige of "Made in Germany" and opening the door to a sustainable, Euro-based source of income.

Choosing the Right Company Form: UG vs GmbH

When you set up a UG, it is a legal obligation to set aside one quarter of your annual net profit as a statutory reserve fund each year until your capital reaches €25,000 (Statutory Reserve Fund = 0.25 × Annual Net Profit).

Step-by-Step Incorporation Procedure

• I. Articles of Association and Notarization — The Satzung is signed before a notary, and the company acquires legal identity with i.Gr. status.
• II. Opening a Commercial Bank Account — A German bank account to deposit the capital (Stammkapital).
• III. Commercial Register (Handelsregister) Registration — The capital deposit receipt is submitted to the notary, and an application is made to the court.
• IV. Tax Office (Finanzamt) and Business Registration (Gewerbeamt) — A tax number (Steuernummer) and VAT number (USt-IdNr) are obtained.

Entrepreneur Visa and Right of Residence (§21 AufenthG)

For entrepreneurs residing outside Germany, setting up a company is not only an investment but also the key to living in Germany. However, forming a company does not automatically grant a right of residence. For a visa under §21, an economic interest, secured financing and an IHK-approved business plan are required.

Taxation in Germany

• Corporate Income Tax (Körperschaftsteuer): 15% on company profit + 5.5% solidarity surcharge.
• Trade Tax (Gewerbesteuer): Paid to the municipality, with a rate between 14% and 17%.
• VAT (Umsatzsteuer): Standard rate 19%, reduced rate 7%.

2026 Cost and Time

Frequently Asked Questions