Establishing a limited liability company online in Germany
With the new directive 2019/1151, EU members have committed been obligated amongst others to make the online foundations of companies possible. By now, Germany has complied with this directive. Since August 2022 it is possible to have an online appointment at the notary for establishing your limited liability company (in German: GmbH). Would you like to know about the process and its pros and cons? Then please have a look at the following article!
Why online?
The most obvious advantage is that there is no need for being present. Hence, there are no travel costs and the foundation process altogether can be more convenient. It saves time and money. Especially foreign investors do not have to enter the country anymore. For Chinese, wanting to open a company in Germany, this might come in quite handy as there will be no need to travel (in regards to the political and pandemic restrictions at the moment). Still, a German bank account is required. In general, support during the whole process of company establishments (especially Chinese clients) is one of our main specialties.
On the other hand, there are restrictions during the establishment process if it is handled online. Via online foundation, you can not deposit share capital by providing material assets. However, it does not play a major role in practice. Only merchants and companies are allowed to establish online. Furthermore, saving time during online foundations for foreign shareholders is not major, as opening a bank account can take some time. Unlike in presence, online appointments charge 25€.
How does the process work?
The notarization process is done by video conference. Only the video communication system (for transmitting the legal documents) of the notary association is here allowed. The identity of the parties is verified using the eID-function of the own identity card. Essential duties of the notary are maintained, 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 unlike in presence they do not reduce the costs of foundation. Representation by power of attorney is still possible. The notary can refuse the notarization, if he cannot identity of the parties.
Can you do everything at the notary by now?
By now, only limited liability companies can be established via an online meeting. Capital increase and other corporate actions outside the foundation process are not possible. The same applies to shareholder meetings and resolutions. Nevertheless, in the future there will be more possibilities available. As of August 1st, 2023, establishing a limited liability company with material assets, changing the articles of association as well as the foundation of non-commercial associations are supposed to be possible. Other contracts that require a notarization, e. g. contracts regarding family law and law of succession probably must be done in presence.
Expertise of Ecovis Germany / Heidelberg
If you have any questions regarding tax, accounting, or legal advice, please feel free to contact Ecovis Richard Hoffmann in Heidelberg or the team of ECOVIS Ruide China in Shanghai. Through years of experience and specific knowledge of the German, international, and Chinese business environment, Richard Hoffmann and his team has successfully supported several hundred companies to navigate through the complexity of legal, tax and compliance issues in Germany.