How to set up a GmbH in Germany: Ultimate checklist for your limited liability company

Intro: Is the GmbH a good match for me?

The Gesellschaft mit beschränkter Haftung (GmbH) is a German limited liability company (LLC) and one of the most widely used legal forms for businesses in the country with an excellent reputation. It protects the private assets of shareholders, who are only liable up to the value of their share capital contributions.

Any adult person or legal entity, regardless of nationality or residence, can form a GmbH in Germany. However, non-resident founders should plan for extra documentation and slightly longer processes when opening a bank account.

Key Requirements

To register a GmbH in Germany, these are the minimum requirements

• Business address in Germany
• At least one managing director
• At least one shareholder
• Capital to cover the share capital of €25,000 plus formation costs with min. €12,500 paid up at the time of formation

GmbH Formation Costs

GmbH with standard articles 💬Musterprotokoll

• Solo founder: approx. €708 + share capital
• Multiple founders: approx. €844 + share capital

GmbH with custom articles 💬Satzung

• Solo founder: approx. €1,171 + share capital
• Multiple founders : approx. €1,181 + share capital

📌 These prices include the average fees for the notary, commercial register, transparency register and trade office. Legal advice or custom articles cost extra. Find a detailed breakdown of the notary fees here.

Step-by-step GmbH formation process

Step 1: Clarify roles and responsibilities

Decide who will be shareholders and who will act as managing director (MD). Define each person’s share in the company and the capital contributions 💬Stammeinlagen.

💡International founders: Now is the right time to choose a bank for your mandatory business account. Keep in mind that the process can be more complex depending on your nationality. Some banks may decline applicants from countries under EU sanctions, involved in legal disputes with the EU, or regions considered high-risk.

Step 2: Choose a name and define business activities

The company name 💬Firmenname must be unique and comply with German naming regulations. These are our 3 golden rules:

1. The name may contain the founders’ names and/or the sector, e.g., Shruthi Patel Healthcare GmbH
2. If you mention an industry or sector it’s important to add a unique identifier, e.g., PHX Engineering GmbH
3. Never use offensive, misleading or exclusively descriptive terms, e.g., Global Consulting GmbH

Next, define your business activities in the company objective 💬Unternehmensgegenstand. Both should be pre-approved by the local chamber of commerce 💬IHK.

Step 3: Draft your documents

Choose between using standard articles 💬Musterprotokoll or having a lawyer prepare custom articles of incorporation💬Satzung. Find a detailed comparison here.

📌 The Musterprotokoll is a standardised template for forming a GmbH or UG, combining the articles of incorporation, shareholder list and managing director appointment into a single document. Think of it as a fill-in-the-blank form provided by the government that already includes all the basic company rules and details. It simplifies and speeds up the formation process but its clauses mustn’t be changed or expanded. Custom statutes are flexible but also more costly.

Step 4: Visit the notary

All founders and managing directors must appear before a notary in person or by proxy. The notary will prepare and notarise the foundation documents and file the registration with the commercial register 💬Handelsregister. Read more about this important milestone here.

Step 5: Open a business bank account

The new company is required to open a German business account 💬Geschäftskonto in its name. Then, the shareholders must deposit their capital contributions. There are two golden rules:

1. Each shareholder is required to pay in at least 25% of their individual share.
2. The total amount transferred must be at least €12,500.

Step 6: Submit proof of payment

This is very important: Send the first bank statement to the notary as proof of payment. Only then will they finalise your commercial register application.

Now is also the right time to put the company’s name on the letterbox of its business address so you can receive the invoice for the commercial register entry.

⚠️ Please beware of a common scam and check your invoices very carefully before making any payments.

Step 7: Entry in the commercial register

It may take a few days or even weeks for the official entry to be published. Once the registry court 💬Amtsgericht / Registergericht processes the notary’s documents, your LLC is officially registered. The company now exists as a legal entity with limited liability.

Step 8: Register with the trade office, tax office, transparency register

📌 All follow-up registrations must be completed within four weeks, and it’s the managing director’s responsibility to take care of them.

First, you must register the GmbH at the local trade office 💬Gewerbeamt. The only exceptions are non-operational companies. The registration fee is usually between €20 and €60.

Then, use the tax office platform ELSTER to complete your tax registration. This includes submitting the form for tax identification and applying for a tax number 💬Steuernummer. If your company is going to trade across EU borders, also apply for a VAT ID 💬USt-IdNr.

All GmbHs must list their beneficial owners in the transparency register 💬Transparenzregister. This can be done online and costs about €20 annually.

Step 9: Start your business

As soon as you receive the tax number, you’re officially in business. Add the number to your official letter head and imprints. Without it, you cannot send valid invoices and reclaim input VAT.

Step 10: Get your accounting going

Double-entry bookkeeping is mandatory for all GmbHs. Prepare an opening balance sheet and ensure you meet all annual accounting obligations. It’s also wise to look for a tax consultant early in case you run into problems. You will need a reliable service to do your annual financial statement. Remember: Fixing botched bookkeeping is a lot more expensive than consulting someone beforehand.

Timeline & roadblocks for setting up a GmbH in Germany

The GmbH formation process typically takes 4 to 6 weeks, but this can vary widely depending on several factors:

📒 Prep work: The more familiar you are with the process — and the faster you submit your documents — the sooner things can move forward.

📜 Additional paperwork: Some business activities in Germany require special licences (e.g. hospitality or consulting). Apply early, as processing times can be lengthy.

🏢 Business address: A registered office address is essential from the start. Without one, the registration process will get stuck in the early stage.

⚖️ Notary availability: In large cities like Berlin, Munich or Stuttgart, available notary appointments can be limited or require longer wait times.

🏖️ Processing speed: Courts, banks and chambers of commerce tend to slow down during holiday seasons, school breaks or flu season.

📫 Lost communication: Missing a court invoice or important email can delay your registration. Be sure to check both digital and physical inboxes regularly.

Even if delays occur, having a solid plan — and a partner like firma.de — helps keep your GmbH formation on track.

Pros & Cons of setting up a GmbH

FAQ

Can I set up a GmbH on my own?

Yes, that’s possible. Solo founders usually take on the role of managing director as well. Just keep in mind that you’ll need to provide the full share capital of €25,000 yourself.

Is a GmbH the same as an LLC?

Functionally, yes. A GmbH is Germany’s version of a private limited liability company.

Can I form a GmbH from abroad?

Yes, but you’ll need a German business address. If none of the founding team is a German, EU or EFTA citizen, or holds a settlement permit, setting up a GmbH will become more complicated.

When should I avoid setting up an LLC?

Avoid founding your GmbH right before the end of the year if you’re using standard articles 💬Musterprotokoll. The GmbH must prepare its annual financial statement as of 31 December— even if it was just set up. This will result in accounting fees in the region of €800 to €2000 for only a few weeks of business activity. The only way to avoid this scenario is using custom articles. However, having them drafted and notarised will drive up the formation cost by several hundred euros.

Who covers the formation costs of a GmbH?

By default, the shareholders pay the formation costs out of their own pockets. However, if the company is founded with custom articles of incoporation💬Satzung, the shareholders can agree that the GmbH reimburses part or all of the costs—usually up to a set maximum amount or a fixed percentage of the share capital. When using standard articles 💬Musterprotokoll, such reimbursement is also possible, but the amount is strictly capped at €300.

Is the full €25,000 required upfront?

No, only €12,500 is required to register. The rest must be paid later. Careful, at any given time the company is liable with the full €25K. That means the shareholders owe the remainder of their contributions and are personally liable until their share has been fully paid. If you are unsure how to come up with the minimum share capital, consider setting up the GmbH’s smaller sister, the UG.

Is the bookkeeping for a GmbH really that complex?

Yes, please don’t underestimate the complexities of German accounting regulations. Hire a tax consultant to avoid mistakes. When it’s time for your annual financial statement, those mistake may result in chaos and a heavy bill from a specialised accountant.