In principle, a real estate purchase contract does not only have to be in writing, but also has to be notarised, i.e. the contract is read out in the presence of both parties. If you speak little or no German, you will usually need a person to interpret. However, you can have someone represent you at the acquisition and may even save the translator's costs. The power of attorney or declaration of approval then requires - in order to be able to implement the contract completely - also with increased formal requirements.

We offer complete and comprehensible service packages especially for people not resident in Germany who wish to purchase real estate and take care of both the legal and the formal side of the acquisition for you. Our advice is specifically tailored to people with no previous experience or knowledge of the German legal system, offering you comfort and security.

Theoretically this is possible, but foreign banks are usually not familiar with the system of collateral under German law, so they will not usually lend on the property in Germany.

In principle, the profit from renting real estate must be taxed in the same way as other income. When determining the profit, high deductions are made by deducting depreciation and usually also loan interest, which considerably reduce the taxable profit. However, the "tax-free subsistence minimum" is generally only available to persons resident in Germany.

We will be happy to advise you on the taxes to be expected from renting.

In principle, the profit from renting real estate must be taxed in the same way as other income. When determining the profit, high deductions are made by deducting depreciation and usually also loan interest, which considerably reduce the taxable profit. However, the "tax-free subsistence minimum" is generally only available to persons resident in Germany.

We will be happy to advise you on the taxes to be expected from renting.

In principle, the profit from the sale is also taxable. However, important exceptions are granted here to private investors. The best-known exception is the so-called "10-year rule", according to which private investors are granted tax-free profits if they acquired the property more than 10 years ago. It is important to distinguish between private investors and commercial investors. It is always advisable to seek expert advice before looking for a buyer.

There are also exceptions for owner-occupied properties - including holiday homes. Please do not hesitate to ask us about this.

No, in Germany ownership of real property is not proven by a deed but by the owner's entry in the land register. Even if everything is lost, we can prove ownership at any time by requesting an extract from the land register from the Land Registry.

In the German system, the parties and the land registry only receive notarised copies of the purchase contract, while the contract document remains with the notary. If necessary, a certified copy of the lost copy of the purchase contract can be requested there.

First of all, the owner: The house money (also called "Wohngeld") is the monthly amount owed by the condominium owner to the condominium association (WEG).

The largest part of the housing benefit is the operating costs. In the tenancy agreement, these operating costs can be passed on to the tenant. However, even then the tenant pays the owner; the owner pays the WEG, even if the tenant is in default.
The house money also includes maintenance and administration costs, which cannot be passed on to the tenant under residential tenancy law. When renting, the owner covers these costs from the net cold rent.

The declaration of division is the notarial deed by which the owner of a property declares how the property is to be divided into several units.

Units can be residential (=residential ownership unit) or non-residential (=partial ownership unit), such as commercial premises. Residential and partial ownership together form the condominium ownership of the property.

Each condominium unit receives its own land register and can belong to someone else. This creates a condominium community (WEG).

Each declaration of division contains a list of the condominium units, the partition plans and provisions on which parts of the property belong to the condominium and which belong to the common property. It also contains community rules that regulate the rights and duties of the condominium owners among themselves and of the manager. The declaration of division is therefore like a constitution of the condominium community.

In most cases, it is the founders themselves who provide their newly founded company with initial financial resources. In this first phase of a company, it is often still in the development stage. Product development, market analysis and strategy planning are in the foreground. Market entry has often not yet taken place.
A first round of financing with outside funds is then often provided by family members, friends or early-stage investors such as business angels or venture capital investors (so-called "seed financing" or "early stage financing"). Investments in the seed phase are often structured as so-called convertible loans. In this case, a loan with a fixed interest rate is initially made available to the start-up, which is then converted into equity capital of the start-up at predefined conditions within the framework of the first larger financing round, including the accrued interest.

After market entry and the generation of the first sales, the first large-volume financing (so-called Series A financing) takes place, which is then followed by Series B-/C-/D- etc. financing. etc. will follow.

Convertible loans are usually concluded solely between the company and the lending investor. This is the great advantage of this form of financing: contract negotiations and conclusion are considerably simplified and shortened by the two-party principle. In order to avoid the risks of a delay or even refusal of the later conversion of the loan by the existing shareholders, it has become established practice to obtain a corresponding approval resolution as well as a declaration of consent and commitment by the shareholders already within the framework of the loan agreement and thus in advance.
The convertible loan is provided with a moderate interest rate and the maturity is chosen in such a way that, given the expected development, a further financing round and thus the conversion can take place beforehand.
This conversion, in turn, is structured as both a right and an obligation. Because of the low interest rate, the investor has no risk-adequate remuneration if the conversion does not take place and thus does not participate in the increase in value of the company. In this respect, one should also not forget that it is still venture capital, since the investor cannot expect repayment of the loan in the event of insolvency.
Of particular importance here is the determination of the conversion price.
A simple possibility is to convert the conversion loan, including the accrued interest, into equity at the conditions of the next equity financing. However, an investor will only accept this in the case of bridge loans or brige financing.
In cases where the financing via a convertible loan represents an independent financing, i.e. is not only intended to serve as a bridge loan, a discount on the issue price of the next financing round is usually agreed. A valuation cap can also be agreed.

In a milestone investment, the payment of certain parts of the committed total investment is made dependent on the achievement of certain goals or milestones. These can be economic goals, certain development progress or market entry. Milestone investments are to be distinguished from so-called "ratches", which grant investors further shares if targets are not reached, without them having to make a contribution.

A milestone investment is therefore particularly useful for investors if they want to encourage the start-up to achieve certain goals as quickly as possible in order to then receive further funds. For start-ups, this can be a way to convince investors and minimise the risk for them. If the start-up does not reach the agreed milestones, no further money has to be paid out.

With the agreement of a second closing, investors can extend their investment within an agreed period of time after the initial contribution of financial resources (contribution) - but usually without being obliged to do so. The conditions under which the second closing can take place are already set out in the original investment agreement, so there is no need for renegotiation.

Investors do not just invest in a company or in a product. In most cases, the founders themselves are of crucial importance to the investors. The basic idea of a vesting agreement is to bind the founders to the company for a minimum period. Since this is legally only possible to a very limited extent in Germany, vesting creates a financial incentive. If the founders leave the company or stop or limit their work for the company, their shares in the company lose value or they do not profit from the increase in value or even lose their shares altogether, depending on the contractual arrangement. The concrete design is very variable.

The participation of employees in the company or in its turnover and profits is becoming increasingly popular. The basis can be a so-called ESOP, an employee share ownership programme. An ESOP must be concluded between the shareholders, as they thereby waive the profit-sharing to which they are entitled from their shares in favour of the employees. ESOPs are a relevant selling point in attracting good employees and are therefore highly relevant.

There are basically two types of company in Germany. Partnerships such as the GbR (Gesellschaft bürgerlichen Rechts), the OHG (offene Handelsgesellschaft) or the Kommaditgesellschaft (KG) and corporations such as the GmbH (Gesellschaft mit beschränkter Haftung) or the AG (Aktiengesellschaft). In the case of partnerships, the focus is on the persons involved and their activities for the company. They manage the business, must contribute capital in case of doubt and are personally liable. In the case of corporations, the partners make a capital contribution and are only liable to a limited extent for this capital contribution. A managing director takes over the management. This makes corporations attractive for investors and for founders who value limited liability.

The choice of the right form of company depends on many factors. Founding a corporation is usually more cost-intensive and requires share capital (for example, at least €25,000 for a limited liability company). In the continuation phase, accounting and tax consultant costs are added. At the same time, however, a corporation and especially a GmbH offer many advantages such as good entry opportunities for new partners and investors, an often important limitation of liability or also better tax opportunities.

Partnerships can be set up quickly and easily or even come into being partly automatically with the decision to work together (GbR). They do not require capital reserves and are flexible. But one has unlimited liability with one's private assets.

The subsidiary is a legally independent company. It is founded by the existing parent company, which is the owner (usually the sole shareholder). It then operates independently of the parent company.

The branch office is a largely independent part of a company that is spatially and organisationally separate from the main branch office. It is not an independent enterprise. A German branch of a foreign company must be entered in the commercial register in the national language of the foreign company. Foreign additions to the legal form may be continued, even in abbreviated form, if this is not confusing.

The establishment of a branch of foreign companies must be notarised. This must include details of both the foreign parent company and the branch to be established. In addition, proof of the existence of the parent company and a publicly certified and translated copy of the articles of association must be submitted.

Another possibility is the establishment of a permanent establishment. Such a dependent branch is dependent on the parent company in every respect, as it is actually only physically separate from the parent company. It bears the same name and invoices are issued exclusively by the main branch of the enterprise. They do not have to be entered in the commercial register, but a business registration is required. It is important for foreign companies to know that profits must be taxed in Germany. The taxes incurred depend on the legal form of the foreign head office. They correspond to the taxes that a company with the corresponding German legal form would have to pay.  In particular, income tax or corporation tax, solidarity surcharge, wage tax, trade tax and turnover tax are due.

Yes, as a managing director of a limited liability company you have an employment service contract with the company. In such a constellation, you can either apply for a residence permit for the purpose of self-employment in accordance with Section 21 (1) of the Residence Act. This would be possible if you are also the majority shareholder of the company. If you do not own any or less than 50% of the shares in the company yourself, you can apply for a residence permit for the purpose of employment.

The articles of association essentially regulate the legal relationship between the shareholders as well as the formal procedures and specifications of the company. In the case of a GmbH, the articles of association are publicly accessible and can be inspected by anyone in the commercial register. For this reason, there are often still internal contracts and agreements between the shareholders that are not intended for the public.

The formation takes place before a German notary. There, the articles of association are adopted and the management is appointed. The management then registers the company with the commercial register. There is usually some time between the formal notary appointment and the actual registration, as the company still has to open a business account through the future managing director and the shareholders have to pay in the share capital. Only then can the registration be submitted by the notary.

For foreign clients, we offer special service packages that enable the formation to be carried out even without being present in Germany. Please do not hesitate to contact us.

In principle, the presence of the partners and the future management is required at the notarial formation meeting. For foreign clients we offer special service packages which enable the formation to be carried out without presence in Germany. Please do not hesitate to contact us.

It is becoming increasingly difficult to open a bank account in Germany, as many banks are rather reluctant to accept foreign entrepreneurs due to the new legal regulations, especially regarding the fight against money laundering. However, there are several banks with which we have good experience. Only in a few exceptional cases were we unable to find a bank for our clients. In these cases, however, we were then able to find other solutions so that they could still start their business in Germany.

As a rule, a subsidiary is founded via a limited liability company (GmbH). The parent company is then the sole shareholder. The formation itself follows the usual procedures for founding a GmbH (see: FAQ How does the formal process of founding a GmbH work?). Only the proof of the existence of a foreign parent company, if any, must be considered separately here. This proof depends on the country in which the parent company has its registered office.

We have many years of experience in obtaining suitable proof and will be happy to answer any further questions you may have.

The costs of founding a GmbH depend on the share capital. As a rule, you have to reckon with approx. 700 EUR notary fees plus 200 EUR fees for the commercial register. After registration, membership in the Chamber of Industry and Commerce and tax registration are required.

We offer our clients various packages for the formation of companies. Please contact us for a cost overview.

After incorporation, the company can generally start its business. This also applies to the period between incorporation and registration of the company. In this case the company must bear the suffix i.G. (in formation) in its name. It should be noted that the liability of the parties involved changes during this period, as the limitation of liability does not yet fully apply.

After the formation, the initial tax registration must be carried out promptly, which we always recommend to have carried out by a tax adviser.

A GmbH has relatively high administrative costs. In particular, the costs for bookkeeping and tax advice should be mentioned here, which of course also vary considerably from one individual to another.

Regular costs are also incurred for membership of the Chamber of Industry and Commerce.

In order to relocate the registered office, the articles of association of the GmbH must be amended. This is only possible with a shareholders' resolution to be notarised. If not all shareholders can appear at the notarial appointment, representation arrangements are possible. We will be happy to advise and represent you here.

In most cases, the sale of partnership shares is regulated in the partnership agreement, so this must always be clarified in advance. Shares can then be transferred within the framework of a purchase and transfer agreement. The price is freely negotiable. The contract must again be notarised. If not all shareholders are able to attend the notary appointment, representation arrangements are possible. We will be happy to advise and represent you in this regard.

The change of managing director is effected by a shareholders' resolution in which the old management is dismissed and the new one is appointed. This resolution must then be submitted to the commercial register by the new management through a German notary.

GTC and terms of use can be defined as framework conditions that are to apply to a variety of contracts. For example, a company can stipulate that all business transactions are to be carried out only on the basis of these GTC.

First of all, the possibilities are manifold. Legally, they must stand up to the so-called AGB control. In particular, they must not be surprising or unreasonably disadvantage one side.

B2C means business to customer and defines the legal relationship between companies and consumers. Here, considerable narrower limits are set by German and European laws, which must be observed.

B2B means Business to Business and defines the legal relationship between entrepreneurs. Here, there are more and more far-reaching possibilities for regulation.

The online shop GTC regulate the sale of goods and services via the internet. In the B2C area in particular, the many consumer protection rights must be observed. In particular, there are narrow limits to the possibilities for regulating revocation, warranty and liability.

An imprint is a mandatory requirement on every website in Germany. It must name a responsible person or company. Correct contact details must be given and, in the case of companies, the registration numbers.

Copyright protects a work of an artist, it comes into existence with the creation of the work and does not require registration or anything similar. A trade mark can be registered for terms, signs, images, logos and many other variations. Registration of the trade mark is a prerequisite for protection. This distinguishes it from copyright. The same applies to designs and patents. While designs protect the shape of objects, patents are only possible for technical inventions.

Copyright protection in Germany is automatic. It cannot and does not have to be applied for separately. Problems often arise in the context of proving who did what first and how. It is therefore advisable to take evidence of one's works, in particular the time at which they were made.

In addition to the classic and most important trademark forms of the word mark, word picture mark and figurative mark, there are a variety of other trademark forms. For example, colours, holograms, multimedia signs and sounds can be protected as trade marks.
From a territorial point of view, in addition to national trade marks, there is also the Union trade mark, which covers the entire territory of the EU, and the possibility of international registration, with which national trade marks can be extended to other national territories. This is possible in all countries that have signed the so-called Madrid Protocol.

The cost of a trade mark application depends on the desired scope of protection. Trade marks are always divided into so-called Nice Classes. The Nice Classes essentially cover all areas of goods and services, so that you can have your trade mark protected specifically in the areas in which it is to be used. Each Nice Class you choose will cost additional fees.

The official fees for a German trade mark start at 290 EUR and for an EU trade mark at 850 EUR.

Data protection regulates the use of personal data. Since 2018, data protection in the European Union has been largely uniformly regulated by the GDPR. In Germany, further regulations from special laws must be observed in addition to this and the Federal Data Protection Act.

As a general rule, personal data should be processed as sparingly as possible. There always needs to be a reason and justification if you want to process data.

We are happy to provide comprehensive and goal-oriented advice on data protection.

Protecting one's own know-how is a difficult task in companies. With regard to third parties, the signing of so-called NDAs (Non Disclosure Agreements) is both necessary and sensible. Internally, technical and organisational measures should be taken to ensure good protection. Legally, in the event of a breach of confidentiality, one can rely on the law on the protection of business secrets.
We advise companies both preventively on the possible measures to safeguard their know-how and we represent them in proceedings in the event of infringements.

No, an employment contract can also be concluded orally or tacitly, in which case it can of course be difficult to prove the content of the contract. However, fixed-term contracts must be agreed in writing, usually before the employment contract begins. Termination agreements or notices of termination must also be in writing.

Under the Verification Act, companies are also obliged to confirm the essential terms of the contract to the employee in writing.

In principle, an employment contract can be terminated subject to the statutory minimum notice period. However, for companies that usually employ more than 10 employees - after the expiry of a 6-month waiting period - the Employment Protection Act (Kündigungsschutzgesetz) is usually applicable, which imposes additional requirements for termination by the employer.

Unless severance pay is already offered in the employment contract or with the notice of termination in the event that no action is brought, there is usually no entitlement to severance pay. If a dismissal is contested by means of an action for protection against unfair dismissal, however, a severance payment is often agreed by way of a settlement in order to end the dispute over the right to dismissal.

The notice period for employee terminations is regulated in § 622 of the German Civil Code (BGB). As a rule, it is 4 weeks (unless otherwise agreed in the employment contract) to the 15th or to the end of a calendar month.

In contrast, the notice period for employer-side terminations is staggered according to how long the employment relationship existed; here the notice period is extended after 2 years to 1 month to the end of a calendar month, after 5 years to 2 months to the end of a calendar month, and so on. The exact periods of notice are regulated in § 622 BGB.

In principle, the notice periods for employee terminations cannot be shortened. Longer notice periods may also be agreed for employee-side notices of termination, but these may not be longer than for employer-side notices of termination.

During a probationary period of a maximum of 6 weeks, the notice period may also be reduced - for both parties - to at least 2 weeks. However, this must be agreed.

The statutory minimum holiday entitlement per calendar year is usually 24 working days, which is regulated in the Federal Holiday Act. Working days are Monday to Friday, so this is 4 weeks. If 5 days are worked, this is to be quota accordingly, i.e. the statutory minimum leave is 20 working days, which is also 4 weeks. Less than 4 weeks of leave per calendar year cannot be agreed.

Additional leave (also called "contractual leave entitlement") is regularly agreed and can often be found in company agreements or collective agreements.