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: