Forming a German limited-liability company (GmbH) — notary and commercial register — costs about €900 by our calculation. The €25,000 of share capital, of which at least €12,500 is paid in before registration, is the company's money, not a cost. Running the company costs more: bookkeeping, financial statements, tax returns and contributions recur every year.
Share capital is not a cost but a condition of registration
A GmbH's minimum share capital is €25,000 (§ 5(1) GmbHG). Before the application to the register, at least a quarter of the nominal amount of each share must be paid in, and at least €12,500 in total (§ 7(2) GmbHG). A contribution in kind instead of cash requires a report on its valuation (§ 5(4) GmbHG). The money paid in remains at the company's disposal and can cover its expenses, including the purchase of a property.
The entrepreneurial company — the UG (haftungsbeschränkt) — allows capital from €1, but it must be paid in full and only in cash (§ 5a GmbHG). A UG must put a quarter of each year's profit into a statutory reserve until the capital is increased to €25,000. For a property costing millions, the size of the share capital decides little. The purchase money reaches the company as a payment into the capital reserve or as a shareholder loan (see Part 11 of the series German Prime Retail).
Formation costs about €900, but not everyone can form by video
Exhibit 1. The notary and the register charge about €900 to form a GmbH with €25,000 of capital
Notary fees are calculated on a value of at least €30,000 (§ 107(1) GNotKG). For the articles the notary charges a 1.0 fee (€125) with one founder, or 2.0 with several, and a 2.0 fee for the resolution appointing the managing director. Preparing the register application and the list of shareholders comes on top (Gordon Real Estate Group calculation). Simplified formation with the model protocol (Musterprotokoll) — at most three shareholders and one managing director — is cheaper but allows no departure from the statutory model (§ 2(1a) GmbHG; § 105(6) GNotKG).
A GmbH can also be formed by video link (§ 2(3) GmbHG), but only with an electronic ID the notary accepts (§ 16c BeurkG). These are the electronic function of a German identity card, an EU or EEA citizen's eID card or a German electronic residence permit, and a recognised eID means of another EU or EEA state. Everyone else must go to a notary in person or act through a representative with a notarially recorded or certified power of attorney (§ 2(2) GmbHG).
Running costs exceed formation costs because they recur every year
Exhibit 2. Five obligations recur every year, but a small GmbH needs no audit
A GmbH holding one €10 million supermarket exceeds only the balance-sheet threshold and remains small: no audit is required, and publishing the balance sheet and the notes is enough (§ 326(1) HGB). In our experience the largest annual item is the tax adviser's fee for bookkeeping, financial statements and returns; agree it in writing before the company is formed.
Implications for investors
1. Do not confuse share capital with costs. Once paid in, the €25,000 stays at the company's disposal and can go towards the purchase. The bulk of the purchase money arrives as a payment into the capital reserve or as a shareholder loan.
2. Decide early how the founders will sign the articles. Forming a GmbH by video link requires an eID from Germany, the EU or the EEA; everyone else needs a visit to a notary or a notarially recorded or certified power of attorney.
3. Agree the tax adviser's fee in writing before formation. In our experience it is the largest annual item, and financial statements not published within 12 months can draw a fine of €2,500–25,000.
What to check:
• shareholders, capital, managing directors and the release from the restrictions of § 181 BGB — in the articles;
• the company's German address and the bank that will open the account for paying in the capital;
• a power of attorney under § 2(2) GmbHG, if a founder cannot travel;
• the tax adviser's annual fee — in writing and in advance;
• a calendar of obligations: tax returns, publication of financial statements within 12 months, data in the Transparency Register.
See also: Do you need a GmbH to buy commercial property in Germany? · What taxes does a property-owning GmbH pay? · When is interest on a shareholder loan not taxed in Germany?
Sources: GmbHG §§ 2, 5, 5a, 7, 8, 13; BeurkG §§ 16a, 16c; GNotKG §§ 34, 94, 105, 107, 108, 110, Table B, KV 21100, 21200, 22110, 22111, 22114, 24102, 32005; HRegGebV, annex, nos. 2100, 2101; TrGebV, annex, no. 1; HGB §§ 238, 242, 264, 267, 316, 325, 326, 335; IHKG §§ 2, 3; Gordon Real Estate Group calculation, October 2026. Legal position as of 10 October 2026.
Photo: Jan-Philipp Thiele / Unsplash
This page is general information and not investment, legal or tax advice.