vvGmbH in Germany: AMC (asset management company) explained

Two variants of an AMC GmbH / vvGmbH

An asset-managing GmbH can be set up in two different ways:

1. Transferring private assets into a GmbH
   This involves moving private investments such as stocks, ETFs, bonds or real estate into a dedicated
   asset management GmbH (often called a “coin-box GmbH”).
2. Bundling corporate shareholdings under a parent company
   Here, direct interests in corporations–such as a GmbH, AG or others–are combined
   within a holding-style parent company.

Both structures enable shareholders to use corporate tax benefits for assets that would otherwise be taxed
privately at considerably higher rates.

Option 1: Transferring private assets into an AMC

Shareholders who reinvest their private profit distributions into assets such as real estate, shares or other securities
face a high personal tax burden. After the 15% corporation tax, an additional 25% capital gains tax, solidarity surcharge and – depending on the case – trade tax apply. Overall, this often results in a total tax burden of roughly 56%.

An asset management GmbH (vvGmbH) offers an alternative: Instead of paying capital gains tax privately, you can transfer private assets wholly or partly into an existing GmbH or form a dedicated vvGmbH. Inside the corporation, investment income is usually taxed much more favourably.

Option 2: Avoiding capital gains tax with a holding company

If you hold shares directly as a private person, all dividends are taxed with capital gains tax. If you instead hold these shares through a holding company, distributions between corporations are typically 95% tax-exempt. This means that no capital gains tax is applied at the shareholder level.

A holding structure consists of a parent company and at least one subsidiary – all legally separate. The parent can take different forms:

• Financial / asset holding: The parent holds shareholdings but has limited influence. Ideal for pure asset management.
• Operational holding: The most common model. The parent is active in the market and manages its subsidiaries strategically and structurally.
• Organisational holding: Used mainly to structure internal company divisions.
• Management holding: The parent does not operate directly but is responsible for strategy and management of the subsidiaries.

For asset management, a financial holding is typically the most suitable structure. If you hold at least 10% of several companies, grouping these investments in a holding company can significantly optimise your overall taxation.

Tax exemption

The tax status of an asset-management GmbH (AMC / vvGmbH) depends heavily on how clearly its business purpose is defined. To qualify for a trade-tax exemption, the company’s purpose must show exclusively asset management, not commercial activity.

Some local authorities even require that the company name explicitly indicate pure asset management. Clarifying these details in advance is essential. The final decision always lies with the local tax office.

As long as the AMC manages only private assets, no trade tax applies. But the moment assets are used to generate commercial income, the company becomes subject to trade tax.

In principle, an AMC that does not engage in commercial activity is not liable for trade tax unless it is entered into the commercial register. Before registration, the company may perform only preparatory actions. Any activity beyond that triggers trade-tax liability. Once registered, trade tax applies – but delaying registration can lead to penalties.

Reasons for a reduction in trade tax

Once your company is registered in the commercial register, the income of an asset-management GmbH is generally subject to trade tax. Under certain conditions, however, the law provides for reductions of trade income:

• Reduction for income from real-estate assets (§ 9 No. 1 Para. 1 GewStG)
• Extended reduction for real-estate companies: pure real-estate asset management without additional commercial activities (§ 9 No. 1 Sentence 2 GewStG).
• Reduction for profits from domestic partnerships or foreign permanent establishments (§ 9 Nos. 2–3 GewStG)

In addition, managing director salaries reduce trade income because they are tax-deductible business expenses. Since the MD’s salary is taxed under income tax, the overall tax burden of the structure depends on how remuneration and profits are balanced between company and shareholders.

Rental and interest margins are also taken into account for taxation. The effective trade tax rate depends on the local multiplier at the registered office of the GmbH. Because you can freely choose the place of registration within Germany, you have a certain degree of influence over the trade tax burden of your asset-management structure.

For whom is an asset-management GmbH a good fit?

An asset-management GmbH (AMC) is particularly attractive for individuals with substantial private wealth, especially in the form of real estate, securities, or other capital assets. Its biggest benefit lies in the ability to
retain and reinvest profits within the company instead of distributing them privately. This reinvestment model can produce significant tax advantages over time.

An AMC can also simplify long-term wealth transfer. Instead of gradually transferring individual properties, shares or securities, families can move assets into the company and later transfer the shares of the AMC to children or grandchildren. This structure is frequently used for intergenerational estate planning.

Pros

• Tax optimisation: By contributing private assets to the AMC, you may reduce your overall tax burden, potentially lowering taxes on investment income by up to 29%.
• Efficient wealth transfer: Passing on shares in the AMC is easier than transferring assets individually.
• Asset protection: Assets held in the company remain protected if private financial issues arise.
• Reinvestment advantages: Reinvesting profits inside the AMC avoids private withholding tax and allows capital to grow more efficiently.

Cons

• Only worthwhile for high asset values: An AMC becomes cost-effective typically above six-figure portfolios due to recurring costs (bookkeeping, annual financial statements, tax advice).
• Loss of private ownership: Once contributed, assets legally belong to the company, not to you.
• Higher administrative burden: AMC owners must follow corporate compliance requirements and pay chamber fees.
• Restrictions before registration: Before the company is entered in the commercial register, any activity beyond preparatory steps may trigger trade tax.

An asset management GmbH is not the only structure available for managing and preserving private wealth. Asset management entities can be set up using various legal forms, including GbR, KG, GmbH & Co. KG, UG or GmbH.

Using an AMC for real estate

Real estate AMCs are particularly popular. Instead of taxing rental income at your personal income tax rate (which can exceed 50% including surcharges), rental income earned inside an AMC is taxed at:

• 15% corporation tax plus
• 5.5% solidarity surcharge (on the corporation tax amount)

This can significantly reduce the tax burden for property investors while improving long-term reinvestment potential.

Key learnings

• The composition of your assets strongly influences whether an AMC makes sense.
• Your current and future tax rate matters when calculating benefits.
• The tax impact of contributing assets must be carefully planned.
• Consider how often you restructure or reallocate assets.
• Decide whether property should stay within the family or be sold later.
• Check whether profits can be permanently reinvested, or whether you rely on distributions.