Starting a business in
🇩🇪Germany
Checked November 4, 2026 · How we score
Corporate tax
15%
Top income tax
45%
Setup from
$2,500
all-in, first year
Time to form
21 days
can be done remotely
Taxes in Germany
| Corporate income tax | 15% 15% corporation tax plus 5.5% solidarity surcharge on that tax (15.825%) and municipal trade tax (Gewerbesteuer) of about 7%–17%, giving about 30% combined. Rate falls by 1 percentage point per year from 2028 to 10% in 2032. |
|---|---|
| Personal income tax (top) | 45% Progressive 14%–42%, plus 45% above about EUR 278,000 ('rich tax'), and solidarity surcharge of 5.5% for high earners. Church tax 8%–9% may apply. Self-employed freelancers (Freiberufler) are exempt from trade tax. |
| Tax system | Worldwide income |
| Capital gains tax | 26.38%Flat 25% withholding tax plus 5.5% solidarity surcharge (26.375%) on capital income; shares in your own company can be taxed under the 60% partial-income rule. |
| Dividend withholding (non-residents) | 26.38% |
| VAT / GST | 19% |
| Social security | Employee and employer each about 20%–21% (pension, health, unemployment, care) with ceilings. Dividend WHT 26.375% for non-residents, reducible to 15% by treaty or 0% for qualifying EU parent companies. |
Forming a company in Germany
| Usual entity | GmbH (limited liability company) |
|---|---|
| Minimum capital | $14k |
| Setup cost (all-in) | $2,500–$6,000 |
| Annual running cost | $4,000–$10k |
| Time to incorporate | 21 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | No |
| Business banking for non-residents | Hard |
Residency and visas
No digital nomad visa; freelancers can obtain a Freiberufler or self-employment visa, and skilled workers can use the Chancenkarte (Opportunity Card) points-based job-search permit. The stated capital for a GmbH is EUR 25,000 with at least EUR 12,500 paid in; a UG can be formed with EUR 1.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 4/5 (1 = easiest) |
Special tax regimes
Research allowance (Forschungszulage)
25% (up to 35% for SMEs) of qualifying R&D personnel costs as a refundable tax credit.
UG (haftungsbeschränkt)
Mini-GmbH that can be formed with EUR 1 in capital but must retain 25% of profits until it reaches EUR 25,000.
Chancenkarte
Points-based Opportunity Card for skilled job-seekers from outside the EU.
Pros and cons
Why founders pick Germany
- Highest credibility in Europe
- Strong R&D credits and engineering talent
- Online notarisation now possible for GmbH
- Falling corporate tax from 2028
Watch out for
- About 30% combined corporate tax
- EUR 25,000 GmbH capital (EUR 12,500 paid in)
- Heavy bureaucracy and notary costs
- High payroll costs (about 21% each side)
- Personal taxes up to 47.5% with soli
Best for: Businesses selling to the German market · Deep-tech and manufacturing startups · Founders needing top-tier credibility
Germany: common questions
Can a foreigner open a GmbH in Germany?
Yes. A notary must certify the articles of association, and online notarisation by video is now allowed. You need EUR 12,500 paid in (EUR 25,000 stated capital), a German business address and a bank account for the capital; registration takes 2–4 weeks.
What is the corporate tax in Germany?
15% corporation tax plus 5.5% solidarity surcharge and municipal trade tax of about 7%–17%, roughly 30% in total. The corporation tax will fall by one point per year from 2028 until 10% in 2032.
Does Germany have a digital nomad visa?
No. Non-EU freelancers apply for a self-employment or Freiberufler residence permit; skilled workers can use the EU Blue Card or the Chancenkarte.
What is a UG in Germany?
A UG (haftungsbeschränkt) is a mini-GmbH that can be created with as little as EUR 1 capital, though it must reserve 25% of annual profit until reaching EUR 25,000.
How much tax do dividends pay in Germany?
Company profit is taxed at about 30%, and dividends to individuals face a 26.375% flat withholding tax (or 60% partial-income taxation for 1%+ shareholders who opt). Non-residents pay 26.375% unless treaty relief applies.
Sources
- Federal Central Tax Office (BZSt)
- German Federal Ministry of Finance
- PwC Worldwide Tax Summaries – Germany
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.