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Founding a Company in Cologne

Founding a company is a great endeavor, yet very challenging. This holds especially true for migrant founders as the bureaucratic hurdles are even higher. We put together the most important steps for you to start your own business:

  • Choose the right legal form for your company

  • Get in touch with a tax advisor for legal and financial help. They help and support throughout the whole process

  • Come up with a company name and define the business purpose of the company (Unternehmensgegenstand). Tip: The Chamber of Commerce and Industry (IHK) can help you check your company’s name and purpose completely for free, so make sure you take advantage of this. Likewise, it can provide you with relevant information on entering your company into the Commercial Register (Handelsregister)

  • Draft the company’s articles of association Tip: You can use either standardised templates (Musterprotokoll - in German) or tailored-made versions

  • Arrange a formal notary appointment to certify all documents

  • Open a bank account

  • Deposit at least 50% of the share capital (Stammkapital) into your newly-opened bank account

  • Tip: Your notary will subsequently arrange for your company to be entered into the Trade Register (HR)

  • Submit your trade registration (Gewerbeanmeldung) to your local trade office (Gewerbeamt)

  • You are all set!

If you would like to have a deeper dive into the German regulation concerninc taxes and insurance and business plans, be sure to check the IHK’s guide: Setting up a business in Germany


Legal Structures

Are you looking to establish a limited liability company (UG or GmbH) in Germany?

GmbHs are the most widely used legal forms for corporations in Germany. They combine high flexibility with relatively few obligations. Another main advantage of GmbHs is their limited liability to its corporate assets. GmbHs require a minimum share capital of 25,000 Euros. For UGs, this is reduced to 1 Euro.

Here is an overview of the most common company forms for setting up business activities in Germany as a foreigner:

Subsidiary

  • Establishment of a new legal entity

  • Different legal forms available (e.g. GmbH, AG)

Branch Office

  • No establishment of a new legal entity

  • Registration of a German physical business presence

Note: The decision as to which legal structure you want to use to run your business has far-reaching consequences - for example, in terms of how much equity you need and whether you are personally liable for your business. It is highly recommended that you consult a lawyer or tax advisor before making your decision. We are happy to help you find one in Cologne.


A German subsidiary (Tochtergesellschaft or Tochterunternehmen) is a company that is dependent on a parent company (Muttergesellschaft). Its assets are legally independent and separate from the personal assets of the shareholder. The natural person representing the company or managing its transactions are therefore relieved of personal liability.


GmbH, KG or AG are the most commonly used legal forms when establishing a subsidiary. Many foreign companies opt for an UG or GmbH due to their relatively low capital expenditure and simple formalities.


Use the startup ecosystem

So the formalities are all set? But there is another thing that is also very important when you start your business – the network! The good news is – Cologne has a very active and supportive ecosystem for founders, this not only holds true for organizations like the IHK and KölnBusiness, but also for coworking places, accelerators and associations like Startplatz, entrepreneurs club cologne or webdecologne but also for the founders themselves! Have a look at www.startup-map.cologne to get an overiew of our ecosystem and visit the events and pitch your idea to the world!


Dr. Antje Lienert Startup Unit

KölnBusiness Wirtschaftsförderungs-GmbH Börsenplatz 1 50667 Köln www.koeln.business Explore the Cologne Startup Ecosystem: www.startup-map.cologne

+49 (0) 221 99501-223 +49 (0) 1522 2538917 antje.lienert@koeln.business

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