Tax advisors, accountants, auditors, lawyers in Germany
Ecovis is a leading global consulting firm with its origins in Continental Europe. It has almost 9,300 people operating in more than 80 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.
Supporting Hydroline Oy in establishing a company and expanding in Poland27.01.2023
Hydroline Oy is a leading manufacturer of world-class heavy-duty hydraulic cylinders. The company started as family business in 1962 in Vuorela, Finland. Hydroline Oy’s customers include the most renowned machine and device manufacturers in mining, construction, agriculture, maintenance, load handling, forestry, hoisting, recycling, defense, energy and other industries.
In 2012, company decided to expand its operations abroad and to enter the Polish market. The same year, Hydroline Poland was established in Stargard. The first production facility had an area of around 4,000 sqm and production was launched in 2014. Thanks to dynamic growth, a new production facility was built in Stargard in 2019, three times as large as the original one. Last year, Hydroline Poland enjoyed 60% growth.
Hydroline became a client of Ecovis Legal Poland in 2012, needing a partner to support them in their expansion to Poland. Hydroline received a lead to contact Ecovis Legal Poland from one of Ecovis Legal Poland’s other Finnish clients.
“It has been a great pleasure working with the dedicated professionals at Ecovis Legal Poland. Their support has been vital for our successful growth in the Stargard factory. I can wholeheartedly recommend cooperation with Ecovis Legal Poland to any other companies planning to start operations in Poland, as a brownfield or greenfield investment”.
During the cooperation, which has lasted for more than 10 years now, Ecovis Legal Poland has supported Hydroline in many interesting and challenging projects.
- Establishing the company, providing support and assistance with negotiations aimed at obtaining for the new company a decision on support under a new investment tax incentive scheme (CIT exemption based on the value of new investment);
- Supporting the acquisition of a land plot for the production facility;
- Drafting the general contractor agreement, project management contract and other legal documents in course of developing the facility;
- Supporting the company with the implementation of local employment law;
- Advising the company and leading negotiations in a sale and leaseback transaction involving the company’s real estate;
- Advising the company and leading negotiations in a BTS (Build-to-Suit) lease agreement for the new production facility;
- Providing the company with ongoing legal and tax advice during day-to-day operations, including restructuring of the company’s capitals and the tax aspects of such operations;
- Acting as a trusted advisor on a range of strategic and operational matters.
Our successful cooperation continues and new challenging projects are expected soon.
Company formation in Germany: Establishing a limited liability company online26.01.2023
In August 2022 it became possible to obtain an online appointment with a notary to establish a limited liability company (in German: GmbH). For foreign companies, for example from China, this brings numerous advantages. The Ecovis experts know how online formation works in Germany.
EU directive 2019/1151 obliges Member States to make online company formation possible. Germany has now complied with this directive.
The most obvious advantage is that there is no need to be present. There are therefore no travel costs and the process can be altogether more convenient. It saves time and money. In particular, foreign investors no longer need to enter the country. This is of great benefit to Chinese entrepreneurs, for example, due to the current political and pandemic restrictions. However, a German bank account is still required.
The disadvantages of online company formation
There are restrictions during the establishment process if it is handled online. With online foundation, it is not possible to deposit share capital by providing material assets. However, in practice, this does not play a major role. Only registered merchants (eingetragene Kaufleute) and limited liability companies can be established online. Furthermore, there is no major time saving with online foundations for foreign shareholders, as opening a bank account can still take some time. There is a charge of EUR 25 for online appointments.
We have many years of experience and would be happy to support you in founding a company in Germany.Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany
How does the process work?
The notarisation process is carried out by video conference. Only the notary association’s video communication system (for transmitting legal documents) is allowed here. The identity of the parties is verified using the identity card eID-function. The notary still carries out his/her essential duties, such as checking the capacity of the contract, reading out the wording of the contract, as well as his duty of checking the contract and instructing the parties. Sample transcripts can be used, but these do not reduce the costs of foundation. Representation by power of attorney is still possible. However, the notary can refuse the notarisation if he/she cannot verify the identity of the parties.
Currently, only limited liability companies can be established online. Increasing capital and other corporate actions outside the foundation process are not possible. The same applies to shareholder meetings and resolutions. However, in future more will be possible. Establishing a limited liability company with material assets, changing the articles of association as well as the foundation of non-commercial associations are planned to become available by 1 August 2023. Other contracts requiring notarisation, e.g. in the areas of family law and the law of succession will most likely still require attendance in person.
For further information please contact:
Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany
Moldova France tax treaty: New partnership starting soon24.01.2023
On 15 June 2022, France and Moldova signed a tax treaty. The treaty will come into effect once the legislative processes for approval and ratification in both countries have been finished. This eliminates double taxation for companies and individuals doing cross-border business and strengthens the economy. The Ecovis experts know the details.
France is one of the leading investor countries in Moldova with EUR 124 million of French investments in 2019. This bilateral tax agreement is an important step forward in strengthening French economic and financial ties with Moldova. The bilateral agreement will provide a treaty framework for the elimination of double taxation for both companies carrying out cross-border operations and individuals. It will also strengthen the possibilities for fighting tax abuse, tax evasion and tax fraud.
These are the main features of the bilateral tax treaty
- Taxes concerned:
- For France: Corporate income tax and additional contributions, personal income tax and social security contributions (CSG and CRDS) – it does not cover wealth tax, inheritance duties and donation duties
- For Moldova: Income tax
- Permanent establishment (Article 5): A construction or assembly site constitutes a permanent establishment only if its duration exceeds nine months in any twelve-month period.
- Dividends (Article 10): The withholding tax rate is limited to 10% of the dividend gross amount (reduced to 5% if the beneficial owner is a company resident in the other contracting state which holds at least 10% of the capital of the company paying the dividends throughout a period of 365 days including the day of payment of the dividends). The concept of dividends covers disguised or hidden distributions. Specific rules apply when the dividends are derived from income or gains from immovable property by an investment vehicle established in a contracting state.
- Interest (Article 11): The withholding tax rate shall not exceed 5% of the gross amount.
- Royalties (Article 12): Royalties are considered as the remuneration paid concerning a literary, artistic or scientific work, a patent, trademark, design or model, a secret plan, formula or process and for information concerning industrial, commercial or scientific experience. The withholding tax rate shall not exceed 6% of the gross amount.
- Capital gains (Article 13): Capital gains on the sale of immovable property may be taxed in the state where the property is situated. The same applies to capital gains on the disposal of securities of companies (or trusts or any other entity) with a predominance of real estate, such preponderance being assessed over the 365-day period preceding the disposal in question. Capital gains on the sale of securities of other companies are taxable in the state of residence of the seller.
- Elimination of double taxation (Article 21): With regard to France, application of the generalised tax credit method, equal to, depending on the nature of the income, either the amount of tax paid in Moldova up to the limit of the French tax corresponding to the income, or the amount of French tax, provided that the French resident is effectively subject to Moldovan tax on the said income.
The tax treaty between France and Moldova facilitates and strengthens economic relations.Vanessa Raindre, Tax partner, MD Legal, Paris, France
Unless the relevant authorities specify otherwise, a residency certificate must be provided to benefit from the reduced withholding tax rates (Article 28).
Other provisions of the agreement
The tax treaty also includes provisions for non-discrimination (Article 22), for the exchange of information (Article 24) and for tax recovery assistance (Article 25). A general anti-abuse clause is provided in Article 27 to ensure that the granting of an advantage provided for by the treaty is not one of the main purposes of a scheme or transaction that has made it possible, directly or indirectly, to obtain it.
For further information please contact:
Vanessa Raindre, Tax partner, MD Legal, Paris, France