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Relocate a UK Company to Germany after Brexit

Due to the uncertainty and disruption caused by Brexit, relocating your business to Germany may provide it with the boost it needs. Germany is Europe’s strongest economy and has the infrastructure for companies of all sizes. Conveniently situated in the centre of Europe, businesses located in Germany can fully benefit from all that the European Single Market has to offer. At Schlun & Elseven Rechtsanwälte, our corporate law team is ready to assist your company with all the legal necessities of relocating a UK company to Germany after Brexit.

At Schlun & Elseven Rechtsanwälte, we are a full-service law firm with offices and conference rooms across Germany. Whether you require expert corporate law assistance with a specific issue or an ongoing partnership, our law firm provides tailored solutions across legal areas. Contact us directly to find out more about our services, as we will be happy to give you an overview of your options as part of an initial assessment.

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Our corporate lawyers advise on all issues when relocating a company to Germany.

As a full-service law firm, Schlun & Elseven will oversee all the legal requirements.

Our Services When Relocating a Company to Germany

Our full-service model means you can find support across all aspects of German corporate and commercial law at our firm. Here are some of the services our firm provides:

  • Business Immigration services: Our dedicated team of business immigration experts will oversee the requirements in bringing the best talent to your company. The business immigration team at Schlun & Elseven has worked with companies of all sizes and has advised on applicable visas and residence permits for employees, managers and more.
  • Corporate and commercial law insight: Relocating a company to another country often means coming into contact with new rules and regulations. Our dedicated corporate and commercial teams will provide the insight needed to ensure your company is ready for the German business environment.
  • Establishment of business in Germany: Whether the aim is to open a branch or subsidiary office in Germany or relocate the company entirely to Germany, our lawyers will oversee the legal requirements. With our expert guidance and comprehensive legal support, your business can focus on other aspects of the move.
  • In-house employment law support: With certified experts in German employment law, Schlun & Elseven are available to support your business with the critical requirements of German employment law. Our lawyers advise on best practice policies and regulations to be aware of when operating in the German market.
  • Industry-specific Insight: Our lawyers provide specialist assistance for specific industries, such as those in the financial and banking sector, the insurance sector and the retail industry. With our service, your company can receive a competitive advantage.
  • Tax law advice: Our German lawyers will ensure that your company knows its rights under German tax law. Our team will ensure that your company is aware of potential tax incentives available to the enterprise.

The above-listed are just some of the services offered by our law firm. For more information, please don’t hesitate to contact us directly.

Corporate Structures in Germany

Determining the proper corporate structure to implement with your business will decide many factors about registering the company when relocating your business to Germany. The GmbH model is similar to the British limited company as it provides those involved with limited liability. The GmbH is Germany’s most prevalent limited liability business form and is used by many small to medium-sized enterprises. This model carries a certain amount of respect with investors due to its reputation for reliability. When establishing a GmbH, there is a requirement for a minimum of €25,000 in share capital and a minimum of €12,500 in cash. Other fees also need to be paid at the stage of incorporation.

The UG model is seen as the “mini-GmbH” approach, whereby the company receives many of the same benefits as a GmbH but has reduced establishment costs. The UG (“die Unternehmungsgesellschaft  – or “entrepreneurial company”) model is most appropriate for “start-up companies, and it does not carry the same respect as the GmbH model. It is provided for under § 5a Limited Liability Companies Act. It is common for successful UGs to become GmbHs upon establishing themselves.

The AG (“die Aktiengesellschaft”) is the stock corporation in Germany. This model allows companies to become truly global players. Establishing a stock corporation in Germany requires at least 50,000 euros of share capital, of which one quarter (12,500 euros) must be provided upon registration. The company must then be registered with the Tax Office, Commercial Register and the Trade Office. Forming an AG also involves drafting the Articles of Association as the company’s founding document. Like the GmbH model, the AG has a long and respected history in Germany and is, therefore, a suitable model for attracting outside investment and support.

Germany also offers a range of partnership options with varying degrees of liability.

Registering a Company in Germany

The registration process will depend on the model of business pursued. Limited liability companies such as the AG and the GmbH provide stronger protections for those involved in their establishment but also have a more complex registration system. New companies in Germany need to be filed and registered with the Trade Register, the Tax Office and the Commercial Register. The company also need to prepare its Articles of Association and ensure that the business plan is ready for investors and banks. Documents for registration will vary based on the company’s industry and whether it is a limited liability company, a company with unlimited liability or a partnership arrangement with elements of both – such as a GmbH & Co. KG.

At Schlun & Elseven Rechtsanwälte, our corporate law team is vastly experienced when dealing with German bureaucracy, and they are ready to oversee the registration of businesses. Our lawyers will advise your company on the necessary registration process and oversee its completion. Our lawyers will also advise regarding the required licences and standards applicable to operating a business in Germany.

There are many options within the European Single Market when looking to relocate your business in the aftermath of Brexit. Germany is a strong candidate for your business for several reasons.

  • Location: Germany is at the centre of Europe with borders to France, the Netherlands, Denmark, Switzerland and many other countries. Germany has the required infrastructure and excellent transport links, such as the German autobahn system, which suppliers easily reach. Bringing your product to your customer is more straightforward when situated in Germany.
  • Membership of the EU and Single Market: As a member of the European Union, companies in Germany benefit from European Freedom of Movement of Goods, Services, Labour and Capital. These freedoms mean it is much easier for companies within the EU to reach the circa. 500 million consumers within the EU than for those outside of it. EU membership also reduces bureaucratic and customs concerns when trading within Europe. Germany also benefits from many free trade agreements as part of its EU membership.
  • Education and Workforce: German universities produce outstanding candidates with impressive English skills suitable for businesses in all industries. However, if the right people cannot be found in Germany, it is possible to bring in employees from outside the European Union using the EU Blue Card and the Skilled Immigration Act.
  • Infrastructure: The German autobahn and train systems allow goods to be moved efficiently throughout the country and across borders. Germany is a business-friendly country, and supports are available to help companies to establish themselves in the German market.
  • Diversity of Cities: Depending on your company’s aims, German cities can provide exactly what is needed. Berlin is a city open to start-up companies. With its encouragement of diversity and creativity, it is no wonder that many entrepreneurs have brought their ideas to the capital. Establishing a company in Cologne or Düsseldorf provides easy access to a vast population of potential consumers. With 15 million people in the surrounding area, establishing in North Rhine-Westphalia may be suitable for your business. Frankfurt remains one of Europe’s central locations for financial services. Hamburg is Europe’s second biggest port and one of the biggest in the world. With a long history of trade and commerce, setting up in Hamburg means that your company can benefit from the existing infrastructure within the city.
  • Economic Strength: Germany remains the most robust economy in Europe; therefore, creative businesses can thrive by accessing a vast potential consumer base in Germany.

Germany is a country where entrepreneurs worldwide have found success. With the right legal support in your corner, your company can also benefit from all it offers.

Determining whether to relocate to Germany entirely or open a branch office or a subsidiary in Germany is essential for your business. At Schlun & Elseven Rechtsanwälte, our corporate lawyers provide clear insight regarding which model – branch, subsidiary or representative office – may be suitable for your situation. Here is a brief outline of the differences between some of these different options.

The Subsidiary Company in Germany

Subsidiary companies under German law refer to legally independent companies with their own legal personality, in which the parent company holds a majority stake. The subsidiary company, therefore, has a German legal form. This German form allows subsidiaries to have a degree of independence when conducting commercial activity on the German market. Such independence will enable them to make entrepreneurial decisions specifically for the German market. However, there are risks involved, and pursuing the subsidiary model brings higher bureaucratic burdens such as commercial register entry and business registration. There are additional financial requirements for its establishment, as where a GmbH or an AG has been established, the minimum share capital (AG 50.000,00 €/ GmbH 25.000,00 €) needs to be financed. The subsidiary model is particularly suited to longer-term commitments in Germany.

The Branch Office in Germany

The branch office is dependent on having a head office, but it can take part in business dealings independently. The branch office is viewed as an establishment separate from the head office, but it carries out its own legal transactions for a temporary purpose. These activities must be within the scope of the business activities of the head office. The branch office has a certain degree of organizational independence from the head office, but it does not have the status of a legal entity. The branch office represents a part of the company dependent on the head office without its own legal personality. It is therefore subject to the (foreign) law applicable to the head office.

A branch office in Germany allows for independent business activity, and there are low economic efforts to establish it. However, it does have a high bureaucratic burden as it needs an entry into the commercial registry and business registration, and its trade name is the same as that of the head office.

The Permanent Establishment / Representative Office in Germany

The representative office is entirely dependent on the head office abroad. This establishment may not run under a separate trading name in Germany, and invoices are issued in the trading name of the head office. Consequently, it does not take part in business transactions independently. The bureaucratic elements are low for establishing a representative office as an entry into the commercial register is not required. There is also no share capital requirement for opening such an office.

The representative office is only suitable for temporary access to the German market, as it provides less entrepreneurial flexibility.

At Schlun & Elseven Rechtsanwälte, our corporate lawyers advise British Limited Companies based in Germany concerning legal requirements to be aware of after Brexit. Before Brexit, British Ltd. companies founded in the United Kingdom but operating mainly in Germany used freedom of establishment under European law per Art. 54 TFEU for recognition. However, the EU and UK’s failure to come to an agreement on the future recognition of British company forms in EU member states meant that British Limited companies have been left with some difficult decisions.

Our legal team advises companies of all sizes regarding transferring the registered office to the UK, cross-border mergers, establishing holding companies, mergers and acquisition law in Germany, conversion options, and liquidation of companies.