Set up a holding. Reinvest almost tax-free.

You form a holding company at the notary like any GmbH; its purpose is to hold shares in other companies. What matters is whether you build a new shareholding or bring in an existing GmbH. Notary and commercial register cost €590.55 for a holding GmbH with the sample protocol (Musterprotokoll) and one founder.

1. 1

   Plan the structure. Who holds the holding, and which companies sit below it? If you found together, each partner often holds their stake in the joint GmbH through a holding of their own, see structure.

2. 2

   New company or contribution. For a new business you first form the holding with cash. An existing GmbH comes in through a share-for-share exchange, see contribution.

3. 3

   Choose the legal form. Usually a GmbH. A UG works from €1, but only with cash, see UG as a holding.

4. 4

   Word the object of the company. Typically “acquiring, holding and managing shareholdings and managing its own assets”. If the holding takes on tasks for its subsidiaries, such as managing them, add that too.

5. 5

   Notarisation. Sample protocol or articles of association; a cash formation also works by video call (§ 2 Abs. 3 GmbHG). A formation with GmbH shares as a contribution in kind needs articles.

6. 6

   Pay in the share capital. For a cash formation at least €12,500 into the holding's account before the notary files the registration (§ 7 Abs. 2 GmbHG). You can compare providers under business accounts.

7. 7

   Commercial register. The notary files the holding electronically; it comes into existence when it is entered (§ 11 Abs. 1 GmbHG). The responsible court is listed in our commercial register directory.

8. 8

   Transfer the shareholding, inform the authorities. The holding forms the subsidiary or takes over your shares; the tax office and the transparency register follow, see obligations.

With firma.de the notarisation is usually possible within 48 hours; how fast the entry follows depends on the registry court. You find our package under pricing.

In the usual structure you privately hold the shares in the holding GmbH, and the holding holds the shares in your operating GmbH. The operating GmbH pays tax on its profit as before. When it distributes, the money goes to the holding instead of to you, and there it stays almost tax-free:

In the example the holding pays 1.49% tax, you privately pay the 25% flat-rate tax plus solidarity surcharge (§ 32d EStG). The holding only defers this tax, though: when you later take the money out of the holding privately, the flat-rate tax is due then. A holding pays off when profits stay in the business and are reinvested, for example in further companies, securities or a real estate GmbH.

• Selling the subsidiary: If the holding sells its shares, 95% of the gain is tax-free, see participation exemption. If you sell privately, you pay your personal rate on 60% of the gain (§ 17, § 3 Nr. 40 EStG).
• Separating risks: Each subsidiary is liable only with its own assets (§ 13 Abs. 2 GmbHG). Profits distributed to the holding are no longer exposed to the risks of the operating business.
• Several shareholders: If each holds their stake through a holding of their own, each decides whether to reinvest or take money out, and can later sell or pass on their holding independently of the others.

If you need the profits privately right away, a holding gains you nothing and adds the costs of a formation, bookkeeping and a second set of annual accounts.

If you plan a new business, the route is simple: first you form the holding, then the holding forms the operating GmbH as its shareholder. There is no valuation and no lock-up period. It gets harder when the GmbH already exists and makes profits.

Share-for-share exchange under § 21 UmwStG

If you contribute your GmbH shares in exchange for new shares in the holding, the holding in principle books them at their fair market value; you then pay tax on the hidden reserves at once, as if you had sold. On application the book value applies instead, or your acquisition costs for shares held privately (§ 21 Abs. 1, 2 UmwStG), if:

• the holding afterwards directly holds the majority of the voting rights in the GmbH (qualified share exchange), and
• other consideration besides the new shares does not exceed 25% of the book value or €500,000, and never more than the book value.

The holding files the application with its tax office; without it, the fair market value applies. Selling your shares to the holding is not a share exchange; the gain would be taxable at once.

Contribution in kind or capital increase

• Formation in kind: The holding is formed with your shares as the contribution. The articles name the shares and their nominal amount, a report on the formation in kind explains their value (§ 5 Abs. 4 GmbHG), they are transferred in full before the registration (§ 7 Abs. 3 GmbHG), and the registry court checks that they cover the share capital (§ 9c Abs. 1 GmbHG).
• Cash formation, then capital increase: The holding is formed with money and then increases its capital against the contribution of your shares. This separates formation and contribution in time, but costs a second notary appointment.

Either way the notary records the assignment of the shares (§ 15 Abs. 3 GmbHG).

Seven-year lock-up period

If the holding sells the contributed shares within seven years, the contribution is taxed retroactively in your hands (Einbringungsgewinn II); the amount falls by one seventh for every full year since the contribution (§ 22 Abs. 2 UmwStG). For seven years you prove to the tax office by 31 May each year who owns the shares; without that proof they count as sold (§ 22 Abs. 3 UmwStG).

If the GmbH owns real estate, the transfer can also trigger real estate transfer tax. Have the contribution calculated by a tax advisor beforehand.

Dividends from a corporation are disregarded when the holding's income is determined (§ 8b Abs. 1 KStG). Of them, 5% count as business expenses it may not deduct (§ 8b Abs. 5 KStG); in effect 95% are tax-free and 5% are taxed normally.

• At least 10% for dividends: The exemption applies only if the holding directly held at least 10% of the share capital at the start of the calendar year; if it acquires at least 10% in one go during the year, this counts as done at the start of the year (§ 8b Abs. 4 KStG). Below that, the dividend is fully taxable.
• Capital gains with no minimum stake: If the holding sells shares, 95% of the gain is tax-free, however large the stake (§ 8b Abs. 2, 3 KStG).
• Losses do not count: In turn, losses on the shares do not reduce income, such as a write-down, a sale below book value or a defaulted loan to the subsidiary (§ 8b Abs. 3 KStG).

As a GmbH, the holding is always subject to trade tax (§ 2 Abs. 2 GewStG). It deducts dividends from its trade income if the stake was at least 15% at the start of the assessment period (§ 9 Nr. 2a GewStG). The 5% non-deductible expenses remain subject to trade tax too; that is where the roughly 1.5% in the example above comes from.

If the stake is lower, the dividend is added back to trade income (§ 8 Nr. 5 GewStG); in the example the holding's tax rises from €1,491 to €14,791. Unlike for corporate income tax, an acquisition during the year does not count as made at the start of the year here. If your GmbH only comes into the holding during the year, it therefore often distributes only in the following year.

Instead of paying dividends, the subsidiary can transfer its entire profit to the holding under a profit transfer agreement. Its income is then attributed directly to the holding (fiscal unity, Organschaft, § 14 KStG). Conditions: the holding has held the majority of the voting rights since the start of the subsidiary's financial year (Abs. 1 Nr. 1), and the agreement runs for at least five years and is actually carried out (Abs. 1 Nr. 3). With a GmbH as subsidiary it must provide for loss absorption under § 302 AktG (§ 17 KStG). For trade tax the subsidiary then counts as a permanent establishment of the holding (§ 2 Abs. 2 Satz 2 GewStG).

For a holding above a single profitable GmbH, the participation exemption is usually enough. A fiscal unity pays off mainly when profits and losses of several companies come together.

A UG (haftungsbeschränkt) can be a holding too; as a corporation it gets the same participation exemption. With the sample protocol and €1,000 share capital it costs €464.89 instead of €590.55 for the GmbH. Two limits are worth knowing:

• No contribution at formation: Contributions in kind are excluded for a UG (§ 5a Abs. 2 GmbHG). It can only take over existing GmbH shares when it raises its capital to at least €25,000 at the same time. For a share-for-share exchange, the GmbH is therefore the direct route.
• 25% reserve: A quarter of the annual net profit, including the almost tax-free dividends, must go into the statutory reserve until the share capital reaches €25,000 (§ 5a Abs. 3 GmbHG). For a holding that reinvests anyway this hardly matters, but it may not pay this part out to you.

From the reserve the UG can later raise its capital to €25,000 and is then legally a GmbH. More in our guide to forming a UG.

Notary and commercial register fees depend on the share capital, the number of founders and the sample protocol or articles, not on the purpose. A holding GmbH costs as much as any other GmbH:

For a formation in kind with your GmbH shares, the commercial register charges €480 instead of €300. On top, the notary records the assignment of the shares based on their value, and valuation and tax advice come in; these items depend on the value of your GmbH and are not in the table.

Ongoing costs are €19.80 a year for the transparency register, the basic IHK fee of €60–360, and bookkeeping and annual accounts. Every item is in our formation cost calculator (in German).

After the entry, the holding has the same obligations as any GmbH, even if it only holds shares:

• Tax office: The tax registration questionnaire within one month via ELSTER (§ 138 Abs. 1b, 4 AO); our filling guide (in German) walks through it, the tax office directory shows the responsible office.
• Trade office and IHK: If the holding only manages its own shareholdings, trade law usually treats this as asset management, and many trade offices require no trade registration; if it provides services to its subsidiaries, that changes. It is a member of the IHK in any case, because it is assessed for trade tax (§ 2 Abs. 1 IHKG).
• Transparency register: Report the beneficial owners (§ 20 GwG), €19.80 a year. Through the holding you usually remain a beneficial owner of the subsidiary.
• Annual accounts: A balance sheet, prepared within six months (§ 264 Abs. 1 HGB) and published within twelve months (§ 325 HGB). The holding only needs consolidated accounts once the group, added up, exceeds two of three thresholds on two consecutive balance sheet dates: €30,000,000 total assets, €60,000,000 revenue, 250 employees (§ 293 Abs. 1 HGB). More under annual accounts for holding companies.
• Taxes: 15% corporate income tax plus solidarity surcharge (§ 23 KStG) and trade tax at a 3.5% base rate times the municipal multiplier (§ 11 Abs. 2 GewStG) on everything outside the participation exemption.
• Withholding tax: Even on dividends to the holding, the subsidiary withholds 25% capital gains tax plus solidarity surcharge (§ 43 Abs. 1 EStG). The holding gets it credited or refunded through its tax return; until then the money is missing.

As of 9 October 2026. Our formation cost calculator (in German) computes the fees under the GNotKG, the commercial register fee ordinance and the GmbHG, with every item and assumption. The tax examples use the statutory rates and an example municipal multiplier. This guide is no substitute for legal or tax advice; for your structure, get advice from a tax advisor or a lawyer.

Statutes

• § 2 GmbHG
• § 7 GmbHG
• § 11 GmbHG
• § 13 GmbHG
• § 32d EStG
• § 17 EStG
• § 3 EStG
• § 21 UmwStG
• § 5 GmbHG
• § 9c GmbHG
• § 15 GmbHG
• § 22 UmwStG
• § 8b KStG
• § 2 GewStG
• § 9 GewStG
• § 8 GewStG
• § 14 KStG
• § 17 KStG
• § 302 AktG
• § 5a GmbHG
• § 138 AO
• § 2 IHKG
• § 20 GwG
• § 264 HGB
• § 325 HGB
• § 293 HGB
• § 23 KStG
• § 11 GewStG
• § 43 EStG