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Establish a Branch in Germany

Updated on Monday 03rd April 2017

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Characteristics of a German branch

Opening a branch in Germany is an option created for the entrepreneurs that wish to have a representative here, but without free liberty of action. A German branch is not considered a legal entity so the liability for its actions is taken by the foreign company. The name must be the same as the one of the foreign company, except that it has the termination “German division”. 

Foreign businessmen who want to extend their commercial activities in the country, must know that they can set up a business in Germany by establishing a branch office of their main company.

Types of branches in Germany

There are two types of branches (Niederlassung) that are available for registration in Germany are: the independent branch office (Zweigniedelassung) or the operational location (Betriebsstatte). The last one is often called depended branch office.

The independent branch office is part of the foreign company but it can keep its own accounts. The activities of this type of branch cannot be different from the ones of the foreign company.

Special licenses are necessary only in a few sectors of activities such as banking, investments, insurance, restaurants, transportation or telecommunication.

The dependent branch office established in Germany is separated from the headquarter only by its location. Its actions are unified with the ones of the foreign company and cannot perform any activity independently.

Opening a business in Germany as a branch office

Just like any form of business, it’s necessary to register the German branch in the commercial register (Handelsregister) before performing any activities. As a result, the branch receives its own commercial register number, its own registration location and it is designated to a jurisdiction.

The necessary documents for opening a branch in Germany are the following:

  • the notarized articles of association of the foreign company,
  • the proof of registration in the foreign country,
  • the name of the company and its address,
  • the reasons why it was incorporated,
  • the names of the directors (and the board of managers),
  • details regarding the capital of the company,
  • the address and objectives of the branch,
  • the sum of working capital available in the branch office,
  • the date when the decision of opening a branch was taken,
  • the availability period of the branch,
  • the name and addresses of the representatives,
  • license (only in special cases).

The application for registration of the German branch must be signed by the foreign company’s representative in front of a notary and all the documents must be accompanied by an authorized German translation.

If several branches are opened, the applicant can select the commercial register of one district and send all the above documents for registration.

The Trade Supervision Office must also receive:

  • proof of identity of the solicitant,
  • the requested state permit,
  • a residence permit (for the foreigners),
  • a proof of registration of the foreign company and its translation in German,
  • the name of the local representative and its address.

 

For any other question you might have in regards to the establishment of a German branch for your business, please feel free to contact our local company formation specialists. We are specialized in offering qualified consultancy for foreign investors interested in setting up a company in Germany.

 

 

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