Branch Offices

Any foreign company with headquarters and business operations outside of Germany can establish a German branch office. A branch office is a suitable business form for a foreign company wanting to establish a presence in Germany for the purpose of initiating business and maintaining contacts with business partners.

A branch office has no independent or separate legal personality distinct from the head office itself. In legal and organizational terms, it is part of the head office business and is thus subject to the law governing the head office. A business branch forms part of the foreign company’s organization. The legal liability of the branch office depends on the liability of the legal entity of the head office.

An autonomous branch (selbstständige Zweigniederlassung) office can only be registered in Germany, if the foreign legal entity is registered with a foreign commercial register (or any corresponding institution).

The autonomous branch office has to display some degree of autonomy vis-à-vis the head office by having its own management with its own executive powers, separate bank accounts, separate balance sheet, and independent business assets. Only foreign commercial business persons, who are registered with a commercial register, can establish an autonomous branch office.

The decision to establish a branch office must be made by the managing directors of the head office. The autonomous branch office must be entered in the commercial register and registered with the local trade office.

The application for registration with the commercial register must include detailed information on the foreign company and generally be accompanied by a notarized copy of an excerpt of the commercial register showing the existence of the foreign company and the power of representation of the managing director(s) and the management board as well as from memorandum and articles of association. All documents should be in German certified translation and the notary’s certificate must be authenticated.

Due to the harmonized EC Law, the documentation effort for European companies is fairly modest. For non-European companies it can be extensive, the exact details depending on the foreign company’s residence. The application must be certified and submitted by a notary.

A dependant branch office (unselbstständige Zweigstelle) displays no autonomy vis-à-vis the head office of the company and is not entered in the commercial register. The only formal requirement for a dependant branch office is registration with the local trade office, for which certain documentation on the foreign company is also necessary.

Offices that purely serve to observe the market and pave the way for initial customer contacts are often described as "representative offices." However, this term does not exist in German commercial law. A representative office must usually be registered as a branch office in Germany.

Only an office managed by a self-employed external business person (e.g. a commercial agent authorized by the company) can be considered a case in which no independent business activity is conducted on behalf of the foreign company. In this specific instance, registration with the local trade office is not required.