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I have been living and working in Germany for about four years. Now I have decided it is time to take the step to start a company here. Together with my partner who is located in Spain, we are planning on setting up operations Europe-wide. Head-office will be either in Barcelona or in Germany. In case, we set up headoffice in Spain, what legal form would I need to set up to work directly from Germany only paying taxes in Germany. Would a subsidiary be an option legally, and what need of initial capital is needed? In that case, I would be employed by the subsidiary directly paying taxes directly to Germany. Or is there a form of employment in which I would be contracted by the Spanish company without needing Spanish NIE and social security number and paying my taxes in Germany only? All advice is much appreciated.

Antwort

Generally, a Spanish company can be the shareholder of a German company (subsidiary). Also German and Spanish individuals can set up a German company. Another option for a Spanish company is to establish a branch office in Germany. For detailed information on different types of German companies (including share capital requirements) and branch offices, please refer to Germany Trade & Invest’s “Investment Guide to Germany”: www.gtai.com/investment-guide

Whether personal income tax of an employee is to be paid in Germany or Spain generally depends on the place of residence or habitual abode of the employee. The German Federal Tax Office provides information on the general situation for individuals resident in Germany as well as for individuals not resident in Germany (www.germantaxes.info). Among other things, the German-Spanish Double Taxation Agreement is of importance in this regard.

Social security is coordinated to a large extent within the EU. In general, social insurance contributions for an employee are due in the country where he/she actually works. However, there are numerous exceptions to this basic rule, e.g. in cases of posting of employees or if an employee works in two countries. The European Commission provides extensive information on this topic online.

Source: Germany Trade and Invest
- Gesellschaft für Außenwirtschaft und Standortmarketing mbH
Headquarters
Oktober 2017

Tips from the editor:

• English version of the business start-up portal
• Europe Enterprise Network (EEN): Advice at local Network contact point
  
• Bundesnotarkammer (Chamber of German civil law notaries)
  
• DStV - German Association of Tax Advisers: Adviser-Search
  
• Federal Chamber of Tax Advisers: Adviser-Search