International Investments in Germany
Welcome to Germany!
You would like to set up a company in Germany, but your company is based abroad? Or you already have a company in Germany, and would like to review its tax structure and improve it, if possible?
As lawyers and tax consultants, we can support you by not only preparing a tax strategy, but also establishing and adjusting the structure you need.
The following questions often arise when it comes to addressing tax aspects while planning cross-border investments:
- Where in the group are specific profits generated and taxed?
- How can profits be transferred abroad in a tax-friendly manner?
- How will the sale of a German investment be taxed?
There are also operational considerations, such as the taxation of employees who are temporarily seconded from one country to another.
Every structure and every plan are so individual that we will review your unique case to identify what tax consequences your investment will have. We would also be pleased to conduct a comparative calculation of the tax burden for various alternatives to your intended investment in Germany.
Implementation pursuant to corporate law
We will be happy to explain the corporate-law and tax advantages and disadvantages of the various legal forms that are common in Germany – and help you choose the right legal form.
Of course, we will also set up the desired corporate structure for your investment in Germany. We can establish a company of any legal form for you – particularly a GmbH, AG, KG, or OHG – or acquire corresponding shelf companies. (A shelf company is a company that has already been established but has not yet initiated business activity. This is an established and accepted approach in Germany.)
In addition, we will draw up the articles of incorporation for companies in such a way that they meet your requirements and your customary corporate governance as closely as possible. And we can initially assist your managers who arrive in Germany and are not yet familiar with German corporate-law regulations.
We can also draft the agreements necessary to implement or improve your structure, such as licence agreements or financing agreements.
If you require operational support with other steps, we will gladly put you in touch with suitable partners who also have experience in cross-border activities. This may be a tax consultant who sets up accounting in Germany for you and oversees tax compliance; this may be a lawyer who negotiates a rental agreement for a property in Germany on your behalf, or drafts your employment contracts. It goes without saying that we will support them, if necessary.
Key characteristics of tax planning
With regard to the tax aspects of your investment in Germany, the following points should typically be considered:
Should the investment take place through your parent (or holding) company located outside of Germany, or instead through the company in a different country?
Capital gains tax
What withholding tax (capital gains tax) will your country impose on dividend distributions in Germany? What reductions or refunds are possible?
What is the most clever way to finance your investment in Germany? Should your financing structure rely on equity or outside capital? Or a mixture of both? If you opt for outside capital, should it be provided by the parent company or by a company in a different country?
Patents and trademarks
Is it more sensible to transfer patents, trademarks and other industrial property rights used by your German company to another German company? Or is it better to leave them abroad and merely licence them to Germany? In this context, the German licence barrier (Lizenzschranke) has recently played a major role.