Luxembourg Company
| Key Corporate Features | |
| General Information | |
| Political Stability | Good |
| Type of Company | Private Limited Company |
| Legal System | Common |
| Corporate Requirement: | |
| Members | |
| Minimum Number of Members | 1 |
| Location of members meetings | Netherlands |
| Directors | |
| Minimum Number of Directors | 1 |
| Local director required | Yes |
| Location of directors meetings | Everywhere |
| Corporate directors permitted | Yes |
| Secretary | |
| Company secretary required | No |
| Qualified secretary required | No |
| Capital | |
| Standard currency | euro |
| Minimum paid up share capital | 0.1 euro |
| Financial accounts | |
| Requirement to prepare accounts | Yes |
| Requirement to prepare audited accounts | Yes |
| Requirement to file accounts | Yes |
| Taxation | |
| Publicy accessible accounts | Yes |
| Corporate Taxation |
15% |
| Requirement to file Annual Return | Yes |
| Change in domicile permitted | No |
| Publicy accessible records | |
| Member(s)/ Shareholder(s) | Yes for single member company |
| Director(s) | Yes |
GERMANY INFORMATION
Principal Corporate Legislation
German Code of Corporate Governance issued by the Federal Ministry of Justice.
Public Commercial Registers (Handelsregister) are decentralized in Germany, with the information on corporations available in the local register in the region where the company has its legal seat.
Type of company for international Trade and Investment
- Gesellschaft mit beschränkter Haftung (GmbH or Limited Company)
- Aktiengesellschaft (AG or Joint Stock Company)
- Limited Partnership (KG)
- Limited Partnership with a Limited Liability Company as a General Partner (GMBH & CO KG)
- General Partnership (OHG)
- Civil Law Partnership (GBR)
Procedure to Incorporate
Once a name has been cleared the formation document has to be drawn up, recorded by a German Notary and be signed by all founder members. The company must be registered in the Commercial Register at the county court. The registration document for an AG must include confirmation from the Directors that the minimum share capital has been paid up and an opening balance sheet. In addition, proof has to be made to the Registry that in case of an AG, the Board of Directors can dispose of the capital without restrictions; respectively the Geschäftsführer (Manager) for a GmbH and that the capital has in fact been paid up.
Restrictions on Trading
Certain restrictions apply to areas such as those that affect public safety, public transport, banking and insurance.
Powers of Company
A company has all the powers of an individual.
Language of Legislation and Corporate Documents
German.
Registered Agent Required
No.
Name Restrictions
A company name should not already be in existence otherwise any name is possible, must no longer indicate the business activity. Competition law may have to be considered. Nothing should be added to the name, which may deceive the public as to the size of the business. The suffix must be added to the name.
Language of Name
German.
Names Requiring Consent or a Licence
Names like banking, insurance and re-insurance, financial services.
Suffixes to Denote Limited Liability
GmbH for Limited Company
AG for Joint-Stock Company
Disclosure of Beneficial Owners to Authorities
Generally there is no requirement to disclose the ultimate beneficial owner.
GERMANY COMPLIANCE
Authorised and Issued Share Capital
GmbH: €25,000 with a minimum of 25% paid up. Capital may be paid up in cash or in kind.
AG: €50,000 divided into ordinary shares of equal nominal value of at least €1 fully paid up.
Classes of Shares Permitted
Registered shares and preference share with or without voting rights.
Taxation
German tax law is based on the Basic Law (Grundgesetz), every German tax is regulated by a statute and there are presently 30 statutes in being. The German tax system levies direct taxes on income and on net worth.
Types of taxes are: Corporation Tax, Personal Income Tax, Municipal trade tax on income, withholding taxes on dividends, rental, royalties, fees, interest, and church tax and VAT.
| Current Tax rates are: | |
| Corporation Tax | 15% |
| Solidarity Surcharge | 5.5% |
| Municipal Trade Tax | 7% – 17.5% |
| Withholding Tax | 25% on dividends Up to 25% on interest |
| Sales Tax/VAT | 19% |
Capital Gains Tax
There is no special capital gains tax.
Double Taxation Agreements
Germany has an extensive treaty network with all Western European nations, most Eastern European countries and many others worldwide such as Australia, Brazil, China, India, Japan, and the US. Most treaties follow the OECD model.
Licence Fee
None.
Financial Statements Required
All companies, including branches must submit an annual return with balance sheet and profit and loss account, including returns for the Federal Corporate Tax, the Municipal Trade tax, net worth tax.
Whilst small companies can file abbreviated accounts within six months of their year-end, medium and large corporations must prepare their financial statements and an annual business report within three months of their year-end.
Accounts must be in the German language and in Euro currency. All companies apart from small sized companies (including small AG’s) must be audited.
Directors
GmbH must have a minimum of one manager who can be owner at the same time.
AG’s can have only one Director, but needs a minimum of two if the capital exceeds DM 3 million. The Director (Vorstandsvorsitzender) can also be owner at the same time.
AG’s must also have a Supervisory Board and has a minimum of three members. Depending on the size of a corporation the Supervisory Board may have to have labour representation.
Company Secretary
N/A.
Shareholders
GmbH: one member.
AG: one founder member.
What’s included:
- Drafting the formation documents
- Notary costs
- Certificate of formation
- Memorandum& Articles of association
- Chamber of Commerce documents and registration
- Tax Office registration ( VAT, CIT and Wage Tax (if needed))
