Country Desks — Western Europe
Germany
Legal System
Civil law based on the BGB (Civil Code) and HGB (Commercial Code); pandectist tradition. Federal structure, fully aligned with EU law.
Principal Arbitration Centre
DIS — Deutsche Institution für Schiedsgerichtsbarkeit (German Arbitration Institute). Governed by ZPO Book 10, §§ 1025–1066 (UNCITRAL Model Law based). DIS Arbitration Rules 2018.
Corporate Tax
Federal corporate tax 15% + solidarity surcharge + municipal trade tax (Gewerbesteuer); effective total typically ~30%. VAT (USt) standard 19%.
Partner Office
Served together with our German partner office across M&A, corporate structuring and energy/industrial projects.
Country Desk Brief
Legal System, Investment, Trade & Regulation
A civil-law jurisdiction rooted in the pandectist tradition, with the BGB (Civil Code) and HGB (Commercial Code) forming the principal legislative framework — operating within a federal structure in full alignment with EU law. Mermeroglu Legal advises on market entry, investment structuring, foreign trade and dispute resolution in Germany, working in coordination with our local partner office across M&A, corporate structuring and energy/industrial projects.
The most common entry structure for foreign investors is the GmbH (limited liability company; minimum capital €25,000, at least half paid up) or the lighter UG (haftungsbeschränkt) startup vehicle. Larger or publicly listed structures use the AG (joint-stock company). Typical foreign-entry routes include direct export, partnership arrangements, GmbH/UG subsidiary, or acquisition of a local company.
Germany offers equal treatment to foreign and domestic investors with no ownership limits — however, acquisitions of 10% or more of voting rights in critical sectors (health, AI, semiconductors, robotics, defense and others) are subject to investment screening by the Federal Ministry for Economic Affairs (BMWK) under the AWV/AWG framework.
At a Glance — 2024
Investment & Trade Indicators
Establishment
How to Form a Company
The GmbH is the preferred vehicle for most foreign investors — minimum capital €25,000 (at least half paid at incorporation). The UG (haftungsbeschränkt) is a lighter startup form with lower capital requirements. The AG is used for public or large corporate structures requiring share capital of at least €50,000.
Foreign ownership: equal treatment for foreign and domestic investors; no ownership cap. However, acquisitions of 10%+ voting rights in sectors such as health, AI, semiconductors, robotics and defense are subject to BMWK investment screening under the Außenwirtschaftsverordnung (AWV) and Außenwirtschaftsgesetz (AWG).
Process: the total timeline including research and compliance typically runs 3–6 months.
Typical steps — GmbH
Investment Climate
Investment Models & Where Capital is Flowing
Germany recorded ~$36.7 billion in FDI inflows in 2024 — a ~34% year-on-year increase — alongside 1,724 project investments tracked by GTAI. The USA was the leading source country by project count (229 projects), while the EU leads as a source region. One in five international companies uses Germany as a manufacturing or R&D base, reflecting its position as Europe's largest economy and a gateway to the EU single market.
- Digitalisation — the leading sector by project count (~22% of new projects), reflecting Germany's push to modernise its industrial base and public infrastructure.
- Electronics & Robotics — ~16% of new projects; significant investment in automation, semiconductor supply chain and advanced manufacturing.
- Clean energy & semiconductors — high-profile targets, though some large projects (including Intel Magdeburg) have been delayed to 2026 or beyond.
- Mobility & logistics — automotive transition, EV infrastructure and logistics modernisation are active investment themes.
- FDI stock — inbound stock ~€739B at end-2024; finance & insurance (~€263B) and manufacturing (~€169B) account for the largest shares.
- Regulatory & legal framework — complex but transparent, aligned with developed-market standards; the legal system provides strong investor protections.
Foreign Trade — 2024
Recent Trade & Principal Partners
Germany is one of the world's leading export economies: ~€1.555 trillion in goods exports and ~€1.316 trillion in imports in 2024. Principal export sectors are automotive (~16.8%), machinery (~13.9%), chemicals and pharmaceuticals. In 2024 the USA displaced China as Germany's largest single trading partner for the first time since 2015 (~€252.8B volume); China regained the top position in 2025. The Netherlands consistently ranks third.
Top Export Partners (2024)
- United States (~largest)
- France
- Netherlands
- China
- Poland
Top Import Partners (2024)
- China
- Netherlands
- United States
- Poland
- Italy
Principal Export Sectors
- Automotive (~16.8%)
- Machinery (~13.9%)
- Chemicals & pharmaceuticals
- Electrical equipment
- Aerospace components
Regulatory Developments
Notable Legislative Changes
Reform restarted 27 January 2026 — not yet enacted
Arbitration — ZPO Book 10 Modernisation
Reform of the arbitration framework in ZPO §§ 1025–1066: process began with April 2023 principles and a February 2024 draft bill; Federal Cabinet approved the draft on 26 June 2024. Key proposals include removing the written-form requirement for commercial arbitration agreements and permitting English-language documents in court proceedings. Process stalled at the end of the 20th legislative period; the Federal Ministry of Justice restarted the reform on 27 January 2026.
Progressive tightening — ongoing
Investment Screening — AWV / AWG
The Außenwirtschaftsverordnung (AWV) and Außenwirtschaftsgesetz (AWG) have been progressively tightened in recent years for critical sectors; the 10% voting-rights threshold applies. The government is pursuing plans to consolidate control rules into a single new law introducing three types of procedure (sectoral / security / cross-sectoral).
Note: in energy, construction and banking, no single landmark primary-law change has dominated the past three years; the framework operates through EU directives and existing sectoral legislation. Project-specific verification against current official sources is recommended.
Our Approach
How Mermeroglu Legal Engages in Germany
Germany mandates typically combine GmbH or UG structuring with investment screening advice under AWV/AWG for critical-sector transactions, and frequently engage the law of the investor's holding jurisdiction for tax and financing purposes. Our practice is structured to coordinate across those systems through a single point of accountability, working in close coordination with our partner office in Germany.
Each mandate is led by a single matter principal at the firm, supported by an internal team and local counsel — covering company formation, investment licensing, investment screening, foreign trade, M&A and dispute resolution before the DIS and German courts.
INITIAL ENQUIRIES
Market entry and cross-border matters in Germany are handled through coordinated internal and alliance teams.
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