Shape up

When you plan to enter the German market you should spend a little time to consider the question of the look and feel of your business in Germany. Do you want to run your business as a foreign entity and from abroad? Do you want to establish a German branch or even a German subsidiary? There are a lot of issues to consider, be it employment, tax and liability, that are connected to the legal form of the entity operating in Germany. Thus it is essential to consider very diligently which corporate structure you want to chose to do business in Germany.

Make sure you think about:

• Limitation of liability
• Representation
• Capitalisation
• Taxation
• Employee participation

Your choice of a specific legal form largely depends on which of these items above you focus on. Since you never know how your business will develop in Germany, you should always choose a legal form that gives you the highest possible amount of flexibility with regard to expansion, but also reduction of your business engagement.

Do you want to create only one German company or a system of specialized entities for each part of your business, for example one company that holds all of your lease agreements and one company that runs your day-to-day business and employs your staff?

The question of the structure of your German entities and how they relate to each other has a fundamental impact on taxes, the transfer of profit and the liability for losses.

Contact our corporate specialists for an analysis of your position and advice for the best “shape up” to enter the German market.