Doing Business in Germany

Published 25 August 2026

In short

To start a business in Germany, choose your legal form (GmbH, UG, or branch), check name availability with the Chamber of Commerce, notarize Articles of Association and shareholder list, open a bank account and deposit share capital (GmbH: 25,000 euros minimum; UG: 1 euro), register at the Handelsregister, file tax forms, and register with local trade and employment authorities.

Key facts

Capital: Berlin
Currency: Euro (EUR)
Trade with India: US$ 34.58 billion in goods in FY 2024-25, an all-time high (Embassy of India, Berlin, as on 15 July 2025): India's exports US$ 15.73 billion and imports US$ 18.85 billion. Services trade added US$ 16.65 billion in FY 2024-25, with India's services exports at US$ 10.13 billion. German federal statistics office data cited by MEA put calendar year 2023 goods trade at US$ 33.33 billion.
Indian community: Around 2.75 lakh (about 275,000) Indian passport holders and persons of Indian origin as of December 2024, including more than 50,000 students, per the Embassy of India in Berlin. The MEA brief of October 2024 gave 2.46 lakh as at December 2023, of which about 1.93 lakh were NRIs and 52,864 were PIOs.

The market

Germany is the largest economy in Europe and India’s most important European trading partner. Goods trade reached an all-time high of US$ 34.58 billion in FY 2024-25, with India’s exports at US$ 15.73 billion and imports at US$ 18.85 billion, per the Embassy of India in Berlin as on 15 July 2025. Services trade added US$ 16.65 billion in the same year, up 12.44 percent, of which India exported US$ 10.13 billion. Germany is India’s ninth largest foreign direct investor, and the Indo-German Chamber of Commerce counts more than 2,000 German companies active in India.

Why Indian businesses go there

Germany buys quality and pays for it. For an Indian auto component, machine tool, speciality chemical or pharmaceutical manufacturer, a German customer validates you for the rest of Europe. The Mittelstand is a deep base of mid sized industrial buyers that are less price driven than volume retailers. Germany is also where Indian IT services firms hold some of their largest European contracts, and it is the main European destination for Indian engineering graduates. The India EU free trade agreement, whose negotiations concluded on 27 January 2026, will remove duty on over 99 percent of Indian exports into the EU once it is in force, including about US$ 33 billion of labour intensive exports such as textiles, leather and marine products.

The diaspora and business community

Around 2.75 lakh Indian passport holders and persons of Indian origin lived in Germany as of December 2024, including more than 50,000 students, per the Embassy of India in Berlin. The community is concentrated in professionals, researchers, scientists, nurses and IT and finance staff rather than in trading. That shapes what it can do for you. It is an excellent recruitment and technical network in Munich, Frankfurt, Stuttgart, Berlin and the Ruhr, but it is not a ready made distribution channel the way the Gulf diaspora is. The Indo-German Chamber of Commerce is usually the more productive commercial door.

Sector strengths

Electrical products and auto components, textiles and garments, chemicals and pharmaceuticals, electronics, metals and metal products, leather goods, optical and medical apparatus, and IT and engineering services. Germany sells back machinery, vehicles and parts, aircraft and aviation components, chemicals, data processing equipment and electrical equipment.

The honest difficulties

Tax and cost are the first hurdle. Corporation tax is 15 percent plus a 5.5 percent solidarity surcharge, giving 15.825 percent, and municipal trade tax adds roughly 8.75 to 20.3 percent depending on the city, so the total burden is about 30 percent in Berlin, 32 percent in Frankfurt and 33 percent in Munich. Corporation tax is legislated to fall to 14 percent in 2028 and 10 percent by 2032, but that is years away. Second, incorporation is formal and slow by Indian standards. A GmbH needs a notarised deed, share capital of 25,000 euros with at least 12,500 euros paid in, and entry in the Handelsregister at the local court, which takes weeks rather than days. A UG can be founded with as little as one euro but must retain profits until it reaches GmbH capital. Third, chamber of commerce (IHK) membership is compulsory and carries an annual levy. Fourth, technical and documentation expectations are high. CE marking, REACH registration for chemicals, machinery directive conformity, German language datasheets and full traceability are routinely demanded, and a German buyer will audit you. Fifth, labour law strongly protects employees, works councils have real power in larger firms, and dismissal is difficult once probation ends. Sixth, German is still the language of contracts, tax filings and much day to day business outside Berlin and the large IT firms.

How to apply

Choose the legal form. A GmbH is the standard limited liability company; a UG (haftungsbeschraenkt) is the low capital variant; a branch (Zweigniederlassung) of the Indian company is an alternative where you do not want a separate entity.
Check the company name for availability and acceptability with the local Chamber of Industry and Commerce (IHK), which reviews name suitability before notarisation.
Draft the Articles of Association and have them, plus the shareholder list and the appointment of managing directors, notarised by a German civil law notary. Founders can appear in person or by notarised and apostilled power of attorney.
Open a bank account for the company in formation and pay in the share capital. A GmbH needs 25,000 euros with at least 12,500 euros paid up before registration; a UG can start from one euro but must retain 25 percent of annual profit until it reaches GmbH capital.
The notary files the company for entry in the Handelsregister (commercial register) at the local Amtsgericht. The company acquires legal personality only on registration.
File the ultimate beneficial owner details in the Transparenzregister.
Register the business with the local trade office through the Gewerbeanmeldung, which also notifies the tax office and the chamber.
Complete the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) with the responsible Finanzamt to obtain the tax number, and apply for a VAT identification number (USt-IdNr) from the Bundeszentralamt fuer Steuern if you trade within the EU.
Become a member of the local IHK, which is compulsory for most businesses and carries an annual contribution.
Register with the relevant Berufsgenossenschaft, the statutory accident insurance body for your industry, within a week of starting operations.
Obtain a company operating number (Betriebsnummer) from the Federal Employment Agency and register employees for statutory health, pension, unemployment and long term care insurance before the first payroll.
Apply for an EORI number from German customs if you import or export goods, and set up your customs and import VAT process.
Complete product compliance before shipping. This typically means CE marking and a declaration of conformity, REACH registration or an Only Representative for chemicals, and German language documentation and safety data sheets.
Set up German compliant bookkeeping and e-invoicing, appoint a Steuerberater, and put an intercompany agreement and transfer pricing documentation in place with the Indian parent.

What the trade actually looks like

→ India sells

Electrical products and auto componentsNamed first among India's major exports to Germany in the MEA India-Germany brief; feeds directly into German automotive supply chains.
Textiles and garmentsA long standing export line that stands to gain most from the India EU FTA concluded in January 2026, which covers about US$ 33 billion of labour intensive exports.
Chemicals and pharmaceuticalsBoth intermediates and finished formulations, subject to REACH registration and EU GMP requirements.
Machinery, metals and metal productsCastings, forgings and engineered components supplied to Mittelstand manufacturers.
Leather and leather goodsFootwear and leather accessories, another sector expected to benefit from EU duty removal.
IT and engineering servicesIndia's services exports to Germany were US$ 10.13 billion in FY 2024-25, larger than several goods categories combined.

← India buys

Machinery and machine toolsThe single largest German export category to India, supporting Indian manufacturing capacity.
Vehicles and auto componentsComplete vehicles, powertrains and high value components.
Chemical productsSpeciality chemicals and intermediates for Indian processing industry.
Data processing equipment and electrical equipmentIndustrial automation, control systems and instrumentation.
Aircraft and aviation partsListed by MEA among Germany's major exports to India.
Pharmaceutical products and medical apparatusPatented medicines, diagnostics and optical and medical instruments.

Treaties and agreements with India

Double Taxation Avoidance Agreement Signed 19 June 1995, in force 26 October 1996

Prevents the same income being taxed in both countries and caps withholding tax on dividends, interest, royalties and technical service fees. It also sets the permanent establishment test, which matters for Indian IT and engineering firms placing staff at German client sites, since an extended on-site presence can create a taxable presence in Germany.

Comprehensive Agreement on Social Security In force from May 2017

Indian employees posted to Germany and their employers can stay in the Indian social security system and be exempted from German pension contributions for a defined detachment period, on a certificate of coverage. It also allows totalisation of contribution periods for pension eligibility. This removes a large payroll cost from postings.

India EU Free Trade Agreement Negotiations concluded 27 January 2026, not yet in force as of August 2026

When it enters into force, over 99 percent of Indian exports will get preferential entry into the EU including Germany, with about US$ 33 billion of labour intensive exports such as textiles, leather and marine products moving to zero duty on implementation. Until then EU most favoured nation duties apply, so do not price on preference yet.

India Germany Migration and Mobility Partnership Agreement (MMPA) Concluded December 2022

Eases legal movement of students, researchers and skilled professionals between the two countries and sets up cooperation on returning people who have no right to stay. Practically it supports easier visa handling for Indian professionals and underpins Germany's active recruitment of Indian skilled workers and nurses.

India Germany Inter-Governmental Consultations (IGC) Launched 2011

A whole of government summit format led by the Prime Minister and the Chancellor, with fifteen joint working groups covering agriculture, automotive, energy, vocational education, standards and product safety, water and waste, railways and more. It is the route through which industry level standards and market access problems get escalated.

Which company type to use

GmbH (Gesellschaft mit beschraenkter Haftung)	The standard limited liability company. Minimum share capital 25,000 euros with at least 12,500 euros paid up. Requires a notarised deed and Handelsregister entry. Fully foreign owned is permitted.
UG (haftungsbeschraenkt)	The mini GmbH, foundable from one euro of capital. Must retain a quarter of annual profit as reserve until it reaches 25,000 euros and can convert to a GmbH. Cheap to start but seen as less substantial by German buyers and banks.
Branch office (Zweigniederlassung)	A registered dependent branch of the Indian company, entered in the Handelsregister. No separate legal personality, so the Indian parent carries liability, but it can trade and invoice in Germany.
Representative office (unselbststaendige Zweigstelle)	A liaison presence for market observation and contact. It cannot conclude contracts or generate revenue independently, and it is registered only with the trade office rather than the commercial register.
AG (Aktiengesellschaft)	A stock corporation with minimum capital of 50,000 euros, a management board and a supervisory board. Used for large ventures or eventual listing, and rarely appropriate as a first step.
GmbH & Co. KG	A limited partnership whose general partner is a GmbH. Combines limited liability with partnership tax treatment and is common in family owned German industry, but it adds structural complexity.

Visas and tax

Getting yourself there

Founders use the residence permit for self employment under Section 21 of the Residence Act, which requires the local authority to be satisfied that the business serves an economic interest and is viably financed, usually evidenced by a business plan and a chamber opinion. Employees move on the EU Blue Card, a national skilled worker visa, or the ICT Card for transfers from the Indian parent. The Opportunity Card is a points based job seeker permit.

What you will pay

Corporation tax is 15 percent plus a solidarity surcharge of 5.5 percent on that tax, giving 15.825 percent, and municipal trade tax adds roughly 8.75 to 20.3 percent depending on the municipality. The overall corporate burden is about 30 percent in Berlin, 32 percent in Frankfurt and 33 percent in Munich. Corporation tax is legislated to fall to 14 percent in 2028, then step down to 10 percent from 2032, and a minimum trade tax rate of 9.8 percent applies from 2027. VAT is 19 percent standard. A Double Taxation Avoidance Agreement with India exists, signed on 19 June 1995 and in force from 26 October 1996, and a Comprehensive Social Security Agreement has been in force since May 2017.

Indian government support for this market

Engineering Export Promotion Council of India (EEPC India)

The Department of Commerce sponsored council for engineering goods, India's core export strength in Germany. It runs the India Pavilion at Hannover Messe and other German trade fairs, helps members with CE marking and machinery directive conformity, and publishes technical market reports on German procurement practices. Membership is the standard route into German industrial buyer networks.

Basic Chemicals, Cosmetics and Dyes Export Promotion Council (CHEMEXCIL)

The Department of Commerce council for chemicals, dyes and cosmetics. It advises members on REACH registration, appointing an EU Only Representative, CLP labelling and safety data sheet requirements, which are the practical barriers to selling chemicals into Germany, and runs buyer seller meets at European chemical fairs.

Federation of Indian Export Organisations (FIEO)

The apex export body under the Department of Commerce. It issues Registration cum Membership Certificates, organises German and wider EU delegations, and is the main channel for official guidance to exporters on the India EU FTA concluded in January 2026 and how to prepare origin documentation ahead of its entry into force.

Market Access Initiative (MAI) Scheme, Department of Commerce

A central scheme that reimburses part of the cost of participating in international trade fairs, market studies, product registration and testing charges abroad, and setting up showrooms and warehouses. It is the main way an Indian MSME can afford a stand at a large German fair or fund REACH and CE certification costs.

Frequently asked questions

What is the minimum capital required to start a GmbH in Germany?

A GmbH requires 25,000 euros share capital, with at least 12,500 euros paid in before registration. A UG, the low-capital variant, can start with as little as one euro but must retain 25 percent of annual profit until it reaches GmbH capital.

How long does it take to register a company in Germany?

Incorporation is formal and takes weeks rather than days by Indian standards. The process involves notarization, bank account opening, share capital deposit, and entry in the Handelsregister at the local court, which causes the delay.

What are the tax rates for companies in Germany?

Corporation tax is 15 percent plus a 5.5 percent solidarity surcharge (15.825 percent total), plus municipal trade tax of 8.75 to 20.3 percent depending on the city. Berlin totals about 30 percent, Frankfurt 32 percent, Munich 33 percent.

Is Chamber of Commerce membership compulsory in Germany?

Yes, IHK (Chamber of Industry and Commerce) membership is compulsory for most businesses and carries an annual contribution. You must also register with the relevant Berufsgenossenschaft, the statutory accident insurance body.

What documents must be notarized to start a German company?

Articles of Association, shareholder list, and appointment of managing directors must be notarized by a German civil law notary. Founders can appear in person or by notarized and apostilled power of attorney.

Do I need an EORI number for my German business?

Yes, you must apply for an EORI number from German customs if you import or export goods. You must also set up your customs and import VAT process before trading internationally.

Before you apply: confirm every date, fee and eligibility rule on the official website linked on this page. Public and Policy is an independent portal, not a government body, and details change without notice.