Foreign investors have two possibilities of establishing a company in Germany
: by incorporating a new business or by purchasing a shelf company
. A shelf company in Germany
is a legal entity that is already incorporated and has no previous business activities. According to the German Company Law,
foreing investors have the same rights for registering a company. What's more, the Government encourages foreign businessmen by providing them several types of companies they may register. Among these the most preferred are:
The shelf company has the advantage of being already incorporated, with all of the needed documents up to date and submitted according to the current regulations. This offers a distinct advantage of significantly shortening the time needed for the investor to be able to actually engage in business activities with the legal entity. This is why the shelf company is largely preferred by those investors who with to start trading as soon as possible.
Below, our team of agents who specialize in company registration in Germany answer some of the common questions about this company and highlight its main advantages. It is always recommended to discuss a purchase with an expert in company formation in order to make sure that the company’s details are indeed those presented by the seller. Our team can address any concerned and can provide investors with assistance for company verification.
Why purchase an already made company in Germany?
A German shelf company offers the following benefits:
Faster engagement: the owner of the company will be able to engage in business activities much quicker than when starting a company from zero.
Credibility: one of the top advantages of a shelf company is that its seniority offers more credibility to other business partners and even banks, for credit purposes.
Customization: our specialists in company formation in Germany can help customize the company according to the client’s needs.
Saved time: the company owner will not need to invest much time in the transfer process, compared to when he would have to open an entirely new company.
One of the greatest advantages of German shelf companies
is that being already registered, an investor will no longer waste time with the incorporation procedure. Aged German shelf companies
allow the incorporation of any previous history and thus will provide more credibility to its owner when going into business. Our specialists in company formation in Germany
can also customize the company according to the client’s needs.
Among the advantages of purchasing shelf companies in Germany is also the exclusion from accountability compared to registering a new company. Depending on where a businessman buys a shelf company from, our agents in Germany may conduct an extensive due diligence procedure before the purchase is concluded.
How can an investor buy a shelf company?
Purchasing a shelf company in Germany
is quite simple. The only requirement is to transfer the shares from the company to the new owner. The transfer must be completed before a public notary in Germany. Also, when purchasing a German shelf company
, all documents must be authenticated by the notary and the buyer must provide his or her identification documents. Once the transfer is completed, the new owner may bring the following changes to the company:
- change the name of the company,
- change the main business activity,
- change the registered address,
- appoint a new board of directors or management.
Once all modifications are in accordance to the new owner’s requirements, one must notify the German Trade Register
When buying a shelf company in Germany, investors need to be well aware of the fact that they must perform a thorough verification of the company. This is recommended in order to avoid the situation in which the seller of the company claims that the legal entity was not involved in business transactions when, in fact, the legal entity was previously used and can even have debts. In order to avoid a most unfortunate scenario, we recommend reaching out to our team of agents who specialize in company registration in Germany. They are able to verify the company information and confirm the status of the legal entity.
In summary, the information that is generally provided when purchasing a ready made company is the following:
- the company type: this can be a private limited liability company or a public limited liability company.
- the name: the company has a unique name which also includes the abbreviation for the legal entity type.
- the incorporation date: this is the date on which the company was registered with the German trade register.
- the capital: the share capital of the company as well as the value of the shares.
- the tax status: this must reflect the true financial situation of the company and the VAT registration.
The usual costs for buying a company will include those for the actual purchase of the legal entity as well as the notary fees and the costs for submitting the company changes with the trade register. Investors have the option to keep the existing name or to change it if they wish to do so. In some situations, the seller of the company will allow the buyer to keep the existing registered address for the company, however, this will imply additional costs.
The costs associated with buying a ready-made company can be higher in some cases compared to the incorporation of a new legal entity. This is due to the fact that companies that have been incorporated for some years, for example three or four years, will be substantially more expensive than companies that have only been incorporated for one year. However, for most investors interested in this option, the costs are well worth their business goals. A company that has seniority will have more credibility both in front of other business partners and for the possible clients in Germany.
A shelf company, or a dormant company, is ideally incorporated for a number of years and it is not used for any previous business purposes. This way, the new buyer is free to engage in the desired business activities with no bad debt and by using a legal entity that has a credibility guaranteed by the fact that is was present on the market for some time, with no liabilities or issues. The main reason why foreign investors choose to purchase a shelf company remains saving the time needed to incorporate a new business entity. For those entrepreneurs for which the name of the company is not important, the process is even simpler as they will not need to make any other subsequent changes to their acquired legal entity.
When purchasing a shelf company, we do recommend performing the needed verifications in order to make sure that the company is legitimate and that it will meet the business needs.
If you are interested in setting up a company in Germany
, our team can help you. Moreover, our consultants in company formation in Germany
will provide you information about corporate requirements for companies. You can also contact us
if you need accounting services such as registration for taxation purposes or preparing annual financial statements.