Opening a Branch vs. a Subsidiary in Germany

A presentation brought to you byLawyersGermany.com

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Investing in Germany >>

• There are different types of companies in Germany and an entrepreneur can decide which one suits him better.

• A foreign investor interested in expanding his business in Germany can open a subsidiary or a branch office in this country.

• Our German lawyers can offer you details about each business form available here and can help you with the registration procedure.

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• A foreign company should take into consideration several factors when choosing between a branch or a subsidiary.

• Some of these factors are:

>> Investing in Germany

the German taxation system;

the purpose of the establishment;

the costs of opening a company in Germany.

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Branch Office in Germany >>

• The German branch office (Zweigniederlassung) is an establishment that will be connected to the parent company and it does not own assets nor does it handle its own accounting procedures on its own.

• A branch office in Germany is allowed to conduct the same type of activities as its head office.

• In Germany the branch office is not required to register with the Register of Companies.

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>> Branch Office in Germany

• German branches have to register with the local trade office.

• The branch office is considered part of the foreign company and will be subject to the German taxation system applicable to them.

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The Subsidiary in Germany >>

• A German subsidiary (Tochtergesellschaft) is usually considered a limited liability company and it must have its own share capital, management, and accounting system.

• The subsidiary is allowed to conduct business operations in name of the parent company.

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>> The Subsidiary in Germany

• A subsidiary in Germany is required to register with the local commercial register and the trade office.

• Subsidiaries are subject to the German taxation system as any other local business.

• If you are interested in establishing a subsidiary in Germany, our local lawyers are at your disposal. All you have to do is to contact us.

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Branch Office Versus Subsidiary in Germany >>

• Unlike subsidiaries, branch offices may find it more difficult to obtain a bank account in Germany and clients may be reluctant to entering a business with a branch office.

• In certain cases both a subsidiary and a branch office may need special certificates or licenses in order to conduct business operations in Germany.

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>> Branch Office Versus Subsidiary in Germany

• The subsidiary will have limited liability and if any changes occur in the parent company they will not affect the subsidiary’s activities.

• However, the fastest, easiest and most inexpensiveway to start a business in Germany is through a branch office.

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Legal Assistance in Germany

• Our German lawyers are specialized in various legal and company formation matters and can help you expand your business in Germany.

• You can contact our law firm in Germany for more details about the process of opening a branch office or a subsidiary in this country.

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Thank you for your attention!

• Please contact us for more information at:

  (+44)203-287 0408

office@lawyersgermany.com

http://www.lawyersgermany.com/

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