ultimate-guide
Registering a UG in Germany for Foreigners: 2026 Guide
Table of Contents
- What a UG Means for Foreign Founders
- Minimum Share Capital for UG: What You Must Deposit
- Step-by-Step: Registering a UG in Germany for Foreigners
- Opening a German Bank Account for Foreigners
- Visa, Residency Permit, and Business Plan Requirements
- Tax Registration, Compliance Calendar, and Dissolution
- Frequently Asked Questions
Last Updated: September 23, 2026
What a UG Means for Foreign Founders
A UG (Unternehmergesellschaft) is a German limited liability company foreign founders can register without travelling to Germany, provided they meet specific statutory requirements. This guide from German-Nominee.de covers the process, from share capital to visa-linked business plans.
UG vs GmbH: Which Legal Entity Fits Your Plan
The UG is a mini-GmbH: a limited liability company with a lower entry threshold and stricter capital rules. The GmbH requires a higher share capital deposit but allows more flexible profit payouts. The UG lets you start with a fraction of that capital but obliges you to retain part of your profit each year until your capital reaches the GmbH threshold, at which point you can convert.
| Feature | UG (haftungsbeschränkt) | GmbH |
|---|---|---|
| Minimum share capital | Lower deposit required | Higher deposit required |
| Profit retention obligation | Yes, mandatory annual retention | No |
| Liability protection | Limited | Limited |
| Typical fit | Lean startups, testing the market | Established businesses, VC-backed ventures |
| Conversion path | Can convert to GmbH | N/A |
Minimum Share Capital for UG: What You Must Deposit
The minimum share capital for a UG is set deliberately low by law, but the amount you must actually deposit before registration is a separate question. German law requires the share capital be paid in before the company is entered in the commercial register, and for a UG the statutory minimum is one euro. In practice, notaries and banks expect a realistic amount covering initial operating costs, because a company with one euro in the bank looks like a shell to every authority that reviews it.
How the 25% Retention Rule Affects Your Cash Flow
The 25% retention rule requires a UG to set aside a quarter of its annual net profit into a statutory reserve until that reserve, combined with the original share capital, reaches the GmbH minimum. Until then, you cannot distribute the full profit to shareholders.
Step-by-Step: Registering a UG in Germany for Foreigners
- Choose your company name and check availability at your local chamber of commerce
- Draft the articles of association and shareholder agreement
- Arrange notarisation of the founding documents
- Deposit the share capital into a business bank account
- File for entry in the commercial register (Handelsregister)
- Notify the trade office (Gewerbeamt)
- Complete tax registration with the tax office (Finanzamt)
- Register for VAT if your turnover requires it
Articles of Association and Notarization
The articles of association define your company's name, registered office, share capital, and the managing director's powers. German law requires the founding documents be notarised by a German notary, for foreign founders, the biggest hurdle.
Commercial Register Entry and Trade Office Notification
Once the documents are notarised, your notary files the application for commercial register entry electronically. If everything is in order, the company is entered, the moment your UG becomes a legal entity.
Opening a German Bank Account for Foreigners
Opening a German business account derails more foreign incorporations than any other step. Under the Money Laundering Act (Geldwäschegesetz, GwG), every bank must identify the beneficial owner, verify the source of funds, and confirm the stated business activity matches expected transaction flows. A founder with no domestic address, no local credit history, and a company not yet in the commercial register is a difficult customer to assess, and most relationship managers simply decline.
Route 1: Traditional Branch Banks
Sparkassen, Volksbanken, Commerzbank, Deutsche Bank and HypoVereinsbank all open business accounts for UGs, but their non-resident appetite varies by branch and region. Most branches expect:
- A certified copy of the passport of every shareholder and managing director, plus a certified German translation where the document is not in German or English
- A current commercial register extract (Handelsregisterauszug) or, before entry, the notarised articles of association and the notary's certification of the founding documents
- Proof of the company's registered office, a lease, a sublease, or a registered-office service agreement
- A written description of the business model, expected monthly turnover, main counterparties, and countries of incoming and outgoing payments
- A completed beneficial ownership declaration under the GwG transparency register rules
Route 2: Direct Banks and Neo-Banks
Direct banks such as Comdirect, DKB and ING, and business neo-banks such as N26 Business, Revolut Business, Wise Business and Kontist, are faster to onboard and more comfortable with remote founders. The trade-off: acceptance criteria are automated and opaque, and rejection is usually final.
What these providers typically require:
- A fully registered company, most will not open an account for a UG that is not yet in the commercial register
- A German or EU registered office address (a virtual office is often accepted, but not always)
- A German tax identification number or, at minimum, a VAT identification number
- A managing director who is resident in the EEA, or a nominee structure with a resident managing director
Route 3: Trustee-Bridged Account Opening
Where the founder cannot satisfy a bank's residency or identification requirements directly, a licensed German trustee can act as the initial managing director or nominee shareholder, open the account in the company's name, and step back once the founder has a residence permit and domestic address. This keeps the share capital deposit compliant, because the capital is paid into an account held in the company's name, not the founder's personal account.
What Actually Gets Accounts Approved
Across all three routes, approved files share the same features: a real, documented registered office; a business description matching the expected transaction pattern; a managing director identifiable in person or by video; and a clear explanation of why the company needs a German account rather than one in the founder's home country. Vague answers to "what will you use the account for" are the most common cause of rejection.
Visa, Residency Permit, and Business Plan Requirements
A registered UG does not give you the right to live in the country. The two processes are legally separate: the company is a matter for the commercial register and tax office, while your right to reside is a matter for the foreigners authority (Ausländerbehörde) under the Residence Act (Aufenthaltsgesetz, AufenthG). Foreign founders routinely conflate them, then discover a clean register entry does nothing for a permit application.
Which Permit Applies to You
The relevant route is the residence permit for self-employment under Section 21 AufenthG. It covers two distinct activities, and the documentation differs:
- Gewerbe (trade): commercial activity, e-commerce, agency work, consulting through a UG, retail, software resale. This is the category most UG founders fall into.
- Freiberufler (liberal profession): independent professional activity in a catalogue of fields such as law, tax advice, medicine, engineering, architecture, translation, journalism, teaching and certain IT consulting roles. If your activity is genuinely freelance in nature, you may not need a UG at all, and forming one can actually complicate the permit file.
The Business Plan Is the Decision Document
Section 21 AufenthG requires the authority to find an economic interest in your venture, a positive effect on the economy, and secured financing. In practice, the business plan is where that finding is made or refused. A plan that reads like a pitch deck will be rejected; one that reads like a bank credit memo will be approved.
What a working plan contains:
- A one-page executive summary stating the legal form (UG haftungsbeschränkt), the registered office, the managing director, and the activity
- A description of the product or service, the target customers, and the market, with named competitors and a realistic assessment of your position
- A founder CV showing relevant education, employment history and any prior self-employment, with certificates attached
- A three-year financial plan with monthly detail for year one: revenue by customer or channel, cost of goods, rent, salaries, insurance, tax adviser fees, and the founder's own draw
- A capital and financing section showing the paid-in share capital, any shareholder loans, and personal funds available for living costs
- A statement of how many jobs the venture is expected to create, including the founder's own position
- Evidence of secured financing, bank statements, a signed loan agreement, or a letter from an investor
Health Insurance and the Age Threshold
Two requirements are frequently overlooked until the appointment:
- Health insurance. You must show coverage from a statutory or private insurer. Private expat policies are often rejected for the self-employment permit because they are not considered equivalent to full coverage. Budget for a proper private or voluntary statutory policy.
- Age. Applicants over 45 are typically required to demonstrate adequate retirement provision, which in practice means a pension or life-insurance product with a defined contribution. This is a hard requirement, not a discretionary one.
How the UG Fits Into the Permit File
A registered UG strengthens the application, but only if documented properly. The foreigners authority will want the commercial register extract, articles of association, shareholder list, bank confirmation of paid-in capital, and tax registration. A UG that exists on paper but has no bank account, registered office agreement, or tax number looks like a shell and will be treated as one.
Tax Registration, Compliance Calendar, and Dissolution
Tax registration happens automatically once the trade office notifies the tax office, but the obligations that follow are ongoing. Every UG must file corporate tax returns, trade tax returns where applicable, and annual financial statements. VAT registration is required once turnover crosses the statutory threshold, and you must issue compliant invoices from your first sale.
A practical compliance calendar for your first year:
| Timing | Obligation |
|---|---|
| Immediately after registration | Trade office notification, tax registration |
| Ongoing monthly or quarterly | VAT returns (if registered) |
| Annually | Corporate tax return, trade tax return, financial statements |
| Annually | Retain 25% of net profit into the statutory reserve |
Dissolving a UG: What the Process Involves
Dissolving a UG requires a shareholder resolution, a notarised filing, and a formal liquidation period during which creditors can raise claims. You cannot simply stop filing and walk away; the company continues to exist in the register and accrues obligations until formally struck off.
Frequently Asked Questions
What are the steps to register a UG in Germany?
You draft articles of association, have them notarized, deposit the share capital, and file for entry in the commercial register (Handelsregister). After registration you notify the trade office (Gewerbeamt), register with the tax office for a tax identification number, and handle VAT registration if required. Foreign founders can complete the notarization remotely through a licensed trustee, which removes the need to travel.
Can a non-resident open a UG without traveling to Germany?
Yes. A licensed German nominee shareholder and trustee can hold your shares during formation, allowing the notary to certify the incorporation without your physical presence. Once the commercial register entry is complete, the shares transfer to you. This structure complies with German notary requirements and avoids unreliable workarounds such as apostilled foreign documents that notaries often reject.
What is the minimum share capital for a UG?
The legal minimum is 1 EUR, but you must retain 25% of annual profit until the share capital reaches 25,000 EUR, at which point you can convert to a GmbH. Many founders deposit a higher amount upfront to strengthen their position with banks and landlords. Check the current statutory requirements with the official source before you commit to a figure.
How does opening a German bank account for foreigners work?
Most German banks require the managing director to appear in person for identity verification, and non-residents often face rejections. Prepare your commercial register extract, articles of association, and proof of business activity. Some founders use a trustee-supported formation to present a complete, compliant file, which improves approval odds. Compare banks carefully; digital banks may accept remote verification for some business models.
What happens if I don't register my UG in Germany?
Operating without registration means your business has no legal entity status, so you cannot open a business bank account, issue compliant invoices, or sign enforceable contracts. German authorities can treat unregistered commercial activity as an administrative offence, and you risk personal liability for business debts. Registering the UG before you trade protects both your legal standing and your personal assets.
What are the tax obligations for a UG once registered?
After registration you receive a tax identification number from the tax office. A UG pays corporate tax (Körperschaftsteuer) on profits and may owe trade tax (Gewerbesteuer) depending on the municipality. If you sell goods or services across borders, VAT registration is usually required. File annual accounts and tax returns on time; late filings trigger penalties. Confirm current rates and deadlines with the tax office.
How long does UG registration take for foreigners?
Timelines vary. Notarization can be scheduled quickly once documents are ready, but the commercial register entry often takes several weeks depending on court workload. Bank account opening adds further time, particularly for non-residents. Working with a licensed trustee who prepares a complete, compliant file reduces back-and-forth.