Why does a GmbH require €25,000 capital?
Under the GmbHG (Limited Liability Companies Act), the minimum share capital for a GmbH is €25,000, with at least €12,500 deposited in the bank at incorporation. This capital can later be spent on operating expenses — it's not "reserved", it's capital contributed to the company.
How long does GmbH formation take?
Typically 2–4 weeks across notary appointment + Handelsregister filing. After capital is deposited the Handelsregister entry completes in 1–2 weeks. During this period you can do limited operations as a "GmbH i.G." (in Gründung — in formation).
Does the Geschäftsführer (managing director) have to be an EU national?
No, they can be from any country. However, living in Germany makes banking onboarding and day-to-day operations easier. A Turkish-citizen Geschäftsführer is allowed; German formation can also be a basis for a residence visa.
GmbH vs UG — why pick a GmbH?
A GmbH (€25,000 capital) is preferred for corporate trust, B2B tenders and bank-loan applications. UG (€1 to start) is good for a fast start, but until you reach €25K you must allocate 25% of annual profit to capital — adding bureaucracy. For €100K+ annual turnover, go straight to GmbH.
What's the annual compliance cost?
DATEV-compatible monthly bookkeeping (€149/mo), VAT return (€149/mo monthly or €99 quarterly), annual corporate tax bundle (€890). Total compliance for an active GmbH typically runs €4,000–€6,000 per year.