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Entrepreneurs who want to move their company headquarters abroad have a lot to consider and should therefore start planning early. As competent contact persons for relocating a business from Germany abroad are the Chambers of Industry and Commerce (IHK) and the German Chambers of Commerce Abroad (AHK).

Notification and reporting obligations at the new location
Notification and registration obligations and permits to be obtained depend on the regulations of the EU country in which the new business location is situated. In principle, commercial activities in Germany require an official business registration . For certain legal forms, your company must be entered in the respective national commercial register is required. For EU citizens, a valid passport is sufficient for business registration and, if applicable, a confirmation of registration.

Obtaining any necessary permits at the new business location

Certain industries and activities require special permits and licenses, such as trades that involve high-risk situations. The following are usually industries that require a permit or license include, for example

• Pharmaceutical industry
• Security industry
• Financial service providers
• Gambling industry
• Arms trade

Find out in good time which permits you may need in your destination country.

The following legal regulations in the respective destination country may need to be taken into account:

• Building law
• Business premises regulations
• Water law
• Waste legislation
• Nature and environmental protection
• Forestry law
• Telecommunications
• Roads and railroads

Other permits may also need to be taken into account, such as

• Zoning and development plans
• building permits
• Operating plant license
• Environmental impact assessment

Tax regulations for the transfer of assets to other EU countries

If you transfer assets, parts of the company or the entire company abroad, tax regulations apply.

Transfer of assets to other EU countries

For the cross-border transfer of assets, there are tax regulations that must be taken into account. For example, hidden reserves that have arisen in Germany must be recognized for tax purposes when transferring assets, parts of businesses or entire businesses abroad. The statutory unbundling standard which regulates the taxation of hidden reserves created in Germany in the event of relocation is set out in § Section 4 para. 1 sentence 3 EStG , § Section 16 (3a) EStG and § Section 12 (1) KStG codified.

The transfer of assets to a foreign part of the single entity is subject to immediate taxation in Germany. immediate taxation . Only in certain cases can the resulting tax burden be reduced by an adjustment item ( § 4g EstG ). According to § 4 para. 1 sentence 4 such an adjustment item in the amount of the hidden reserves to be disclosed. This only applies if the assets are transferred within the EU. One fifth of the adjustment item must be reversed in the financial year in which it is created and one fifth in each of the following 4 financial years, increasing profits. It can only be upon application be made and is separately for each asset separately for each asset.

The transfer of assets also means that neither (partial) operations nor rights of use can be the subject of a transfer.

When transferring assets from abroad to Germany the respective tax regulations of the country from which the assets are transferred must be observed.

Further information on tax issues can be obtained from the relevant tax office .

Relocation to another EU country

If a sole proprietorship is to continue operating in another EU country, it is advisable to close down the business and reestablishment in the target country. If you decide to close down your business, you must register it with the relevant public authorities deregister :

• Trade office
• tax office
• Local court (for companies entered in the commercial register)
• Social insurance
• Employer's liability insurance association
• IHK/HWK
• State Statistical Office

If you do not want to give up a sole proprietorship, you should convert it into a GmbH if the place of residence is also moved abroad.

Regardless of the legal form, when relocating German business operations abroad, the so-called relocation of functions according to § 1 (3) AStG and the regulation on disentanglement according to § 4 (1) EStG . The result is similar to a fictitious sale of your company in Germany. For shareholders of a corporation, the following also applies exit taxation according to § 6 AStG . The amount of exit tax depends in principle on the value of the company.

Regulations with regard to the cross-border transfer of employees

If a business is transferred, the employment employment relationships of the employees automatically in accordance with § Section 613a (1) sentence 1 of the German Civil Code (BGB) to the acquirer. This also applies if the transfer is a (partial) transfer of operations. Dismissals due to the transfer of business are therefore § Section 613a (4) BGB ineffective .

However, if the employer relocates production abroad and, in this context, makes redundancies it is necessary to check whether there is a transfer of business in which the employment relationships of the employees are protected. However, if it is a closure of operations, dismissals may be made for operational reasons. A transfer of business may exist, for example, if the distance between the new and old business is not too great. In the case of terminations in the context of a business closure, the statutory notice period of § 622 II No. 6 BGB must be observed and, if a works council exists, its rights must be respected.

Furthermore, the employer is not obliged to offer the employee a vacant position in a company located abroad. The Protection against Dismissal Act is based on the concept of an establishment. "Company" within the meaning of § 1 KSchG are only the organizational units or parts of a company located in Germany.

Entrepreneurs who transfer their companies from other EU countries to Germany can use the following legal forms for this purpose.

Founding a subsidiary

The formation of a subsidiary creates a legally independent company from the parent company. legally independent company . There are no special legal conditions or restrictions for the formation of subsidiaries by foreign companies in Germany. German regulations also apply exclusively to a foreign founder. exclusively German regulations The capital required to establish a company can be imported into Germany without restriction.

Establishment of an independent branch

A branch office is not a separate legal entity from the main branch. It is legally and organizationally part of the company of the main branch . German law also applies to the legal treatment of the branch office in Germany. This applies in particular to the entry in the commercial register.

According to §§ 13 ff. HGB (German Commercial Code) a branch office is a branch office that is physically separate from the main business and is entered in the commercial register must be entered in the commercial register. An independent branch office can only be established by a commercial company. A non-commercial company can only establish a permanent establishment set up a permanent establishment. Permanent establishments are dependent branches and are not entered in the commercial register.

Entry in the commercial register must be made in writing at the locally competent local court in writing. The signature and signature of the company must be a notary public notary public.

Required procedures

In addition to entry in the commercial register, the following requirements must be met in order to establish a subsidiary or branch office:

• Business registration All commercial activities of a subsidiary, a branch office or a permanent establishment must be registered with the competent trade licensing office of the municipality.
• Permits required In particular, the commencement of any craft business requires a permit. The business must be entered in the Register of Craftsmen of the regional Chamber of Crafts. A prerequisite for entry in the Register of Craftsmen is that the business is run by a master craftsman.

European cooperative

Another type of company is the European Cooperative Society (SCE). These can operate in the European Single Market with uniform regulations and a uniform structure. The information, consultation and co-determination rights of employees are safeguarded. An SCE must have have a minimum capitalization of EUR 30,000 at its disposal.

National cooperatives that are active in several member states can be converted into an SCE without prior dissolution. In Germany, this requires an entry in the register of cooperatives is required. This is done in accordance with the regulations applicable to public limited companies:

• To application the involvement of a notary or a notary public is required.
• The registration is made exclusively by electronically . A publicly notarized document is created for this purpose. Since August 1, 2022, the document can also be notarized via video communication.
• The declaration is provided with an electronic signature and sent to the electronic court and administrative mailbox of the registry court of the register court.

European Company

The European Company (SE) is a legal form for public limited companies . It enables companies to conduct their business activities in different European countries with a uniform set of rules.

To form a European Company, you must fulfill the following requirements fulfill:

• Registered office and head office in the same EU country
• Presence in other EU countries (via subsidiaries or branches), or all companies involved are subject to the law of at least two different EU countries
• Minimum capital of 120,000 euros
• Existence of an agreement between management and employee representatives on employee participation in company bodies and on employee consultation and information

A European company can be founded by

• merging existing companies
• a holding company is founded
• a joint subsidiary is founded by several companies or by an existing European Company within the EU
• a national public limited company is converted

The legal basis for the formation of an SE with registered office in Germany can be found in the European Regulation (EC) No. 2157/2001 (SE Regulation) and the corresponding German SE Implementation Act (SEAG), which in turn refers in many cases to the German Stock Corporation Act (AktG) and the German Transformation Act (Umwandlungsgesetz). participation procedure the European SE Directive (SE Directive) and the German SE Employee Involvement Act (SEBG) are decisive.

You can also transfer the registered office of a European Company to another EU country at a later date - without having to dissolve or re-establish it - as long as it is not the subject of bankruptcy, liquidation or insolvency proceedings. You must publicly announce your intention to move the registered office 2 months in advance, and the shareholders must approve the relocation.

Tax regulations

In the Merger Directive of the EC regulates the tax treatment with regard to

• Formation of the SE
• merger
• demerger
• Transfer of registered office to another country

In Germany, the requirements of this directive are primarily set out in the Reorganization Tax Act (UmwStG). Accordingly, the formation of an SE through a cross-border merger does not, as far as possible, trigger an acute tax burden at the level of the company or the shareholders. However, it must be ensured that the hidden reserves already held by the participating companies or shareholders are still available to the tax authorities for later taxation and are not permanently lost ( tax neutrality ). A transfer of the registered office of the SE is also treated according to the same principles.

European private company

The European Private Company (SPE) gives small and medium-sized enterprises (SMEs) the opportunity to operate throughout the EU. The subsidiaries of SMEs operating throughout the EU do not have to adopt the company form of the respective country. It is possible to set up an SPE with one euro of capital. Companies only need to submit a declaration of solvency to submit.

• § Section 12 (1) KStG
• Law on the taxation of foreign relations
• Income Tax Act
• § Section 613a of the German Civil Code (BGB)
• § 622 II No. 6 BGB
• § 1 KSchG
• §§ 13 ff. HGB (German Commercial Code)
• SE Implementation Act (SEAG)
• Regulation (EC) No. 2157/2001
• SE Directive (SE Directive)
• SE Employee Involvement Act (SEBG)
• Merger Directive of the EC
• German Reorganization Tax Act (UmwStG)