How to set up a company in Germany as a British business, even six years after Brexit

A British company or individual can set up a German GmbH or UG without German residence or nationality. Six years after Brexit, a German entity remains one of the most common ways for UK businesses to operate inside the EU single market. Specialist providers such as GmbH-UG.com coordinate the entire German company formation for UK founders, from notary appointment to commercial register entry.

Brexit did not stop British companies doing business in Europe. It did, however, make the mechanics rather less comfortable.

For decades, a UK company could treat Germany as part of its wider home market in many practical respects. Goods, staff and services moved within the EU framework, and although Germany was hardly famous for light administration, British companies at least operated inside the same single market.

That changed when the Brexit transition period ended. Great Britain and the EU became separate customs territories. Goods moving from Great Britain into the EU became exports into a third country, while shipments in the opposite direction became imports. The UK government’s own guidance on goods moving between Great Britain and the EU sets out the resulting VAT and customs treatment.

For British companies with substantial European business, one response has been rather pragmatic: establish an EU company. Germany is an obvious candidate.

Why should a UK company set up a subsidiary in Germany?

Germany offers something particularly valuable to a British company selling across Europe: an operating base inside the EU’s single market.

That does not magically remove every regulatory headache. A German subsidiary has German accounts, German tax obligations and German corporate formalities. Depending on what the company actually does, there may be VAT registrations, employment matters, product regulations and other compliance requirements to consider.

Still, the basic attraction is easy to understand. Instead of conducting all European business directly from a UK entity outside the EU, a company can establish a German subsidiary that is itself an EU company.

Germany also does not reserve its limited companies for German founders. Germany Trade & Invest, the federal economic development agency, states in its guide that the nationality and residence of shareholders and managing directors are irrelevant. A GmbH does, however, require a German business address.

For a London company looking east after Brexit, that combination is quite compelling. Germany is a large market in its own right, but a German entity can also serve a much broader European strategy.

GmbH or UG: which German company type suits a British business?

The Gesellschaft mit beschränkter Haftung, mercifully shortened to GmbH in almost every conversation, is Germany’s standard limited liability company. The shareholders generally benefit from limited liability. The formation process, though, is distinctly German.

A conventional GmbH has nominal share capital of €25,000, of which at least €12,500 must be paid in before registration. Incorporation involves articles of association, a German notary and registration with the commercial register. GmbH-UG.com describes the GmbH as the country’s most widely used corporate form and sets out the principal stages of incorporation on its website.

There is also the Unternehmergesellschaft, usually written as UG. It is sometimes casually described as the German equivalent of a £1 company, although that comparison can be misleading. A UG can technically be formed with very little share capital, but it is subject to special rules, including the requirement to retain a quarter of its annual profit until sufficient capital has accumulated.

A third option is a branch (Zweigniederlassung) of the existing UK Ltd. It is registered in Germany but is not a separate legal entity, so the British parent remains directly liable, and, in legal terms, the business is still conducted by a non-EU company.

In practice, the choice is not simply about finding the cheapest company to register.

How to set up a German company as a British business: step by step

The paperwork tends to be where enthusiasm meets reality. A British shareholder is perfectly possible, but a foreign corporate shareholder can add another layer of documentation. The German notary may require evidence concerning the existence of the British parent company and the authority of the people acting for it.

The typical sequence looks like this:

1. Choose the legal form: GmbH, UG or a branch of the UK Ltd.
2. Prepare the UK documents: a Companies House extract and proof of signing authority, apostilled by the FCDO and translated into German.
3. Notarise the articles of association before a German notary. Online notarisation by video is in 2026 only possible for German ID holders.
4. Open a German business bank account and pay in the share capital.
5. Register with the Commercial Register. The notary files the application.
6. Complete the follow-up registrations: trade registration (Gewerbeanmeldung), tax and VAT registration and the transparency register.

None of this is insurmountable. It is simply procedural, and procedures have an irritating habit of becoming expensive when tackled in the wrong order.

This explains part of the market for specialist formation services. British founders who do not know the German notarial and registration system frequently use providers that coordinate the process. Services such as GmbH-UG.com are used by foreign founders, including British companies and entrepreneurs, to handle the practical stages involved in establishing a German GmbH or UG.

The value in such assistance is less about filling in a form and more about knowing which form, document and certification will be required next. This saves time, money and avoids reminders and fines.

Does a German subsidiary solve post-Brexit customs and VAT issues?

There is an important distinction here. Incorporating in Germany does not somehow turn the British parent company into an EU business. The UK and German companies remain separate legal entities, and transactions between them have to be treated accordingly.

Nor does a German subsidiary eliminate customs questions whenever goods physically cross the UK and EU border.

The UK and EU Trade and Cooperation Agreement allows qualifying goods to benefit from zero tariffs, but zero tariffs are not automatic simply because goods are being shipped between Britain and the EU. Products must satisfy the applicable rules of origin. HMRC’s guidance on UK-EU rules of origin explains the requirements and the circumstances in which preferential tariff treatment can be claimed.

That distinction matters particularly for companies importing products from elsewhere in the world into Britain and subsequently sending them into the EU. Moving a box through a British warehouse does not necessarily make its contents British in origin.

So, the German subsidiary should be seen as an operating structure, not a Brexit loophole.

When is a German subsidiary worth it for a UK company?

Before Brexit, establishing a German subsidiary could look unnecessarily elaborate for a British SME. Why create another company when the existing Ltd could operate within the same single market?

That question now runs the other way.

If a company has occasional German customers, setting up a subsidiary may still be excessive. If Germany and the wider EU account for a substantial part of turnover, however, maintaining a permanent EU structure can become a straightforward commercial consideration. The cost of incorporation must be weighed against recurring customs administration, tax complexity, contractual requirements and the practical expectations of European customers and suppliers.

There is also a less measurable factor: familiarity. A German company with a German registration, address and corporate form is immediately recognisable to German banks, suppliers and business customers. GmbH-UG.com notes that foreign companies often find dealings with business partners, suppliers, public institutions and banks easier when a German company has been established.

Six years after Brexit, Europe is not closed to British business. A relatively seamless legal framework has been replaced by a border and a collection of formalities around it.

For companies doing serious business on the continent, establishing a German entity is therefore not an attempt to undo Brexit. It is something considerably more mundane. It is a way of reorganising the business around the rules that now exist.