Establish an asset-managing GmbH and benefit from the advantages

1. Profit retention: Profits can be retained in the GmbH at a lower tax rate. This enables accelerated asset accumulation compared to direct taxation for natural persons.
2. Distribution flexibility: Profits can be distributed in a targeted manner in order to optimise the personal tax burden of the shareholders.
3. Investment Tax Act: Certain income from capital assets is not subject to taxation in the GmbH, which can reduce the overall tax burden.
4. Loss offsetting: Losses from different types of assets can be offset more easily within the GmbH.

1. Separation of private and business assets: The assets brought into the GmbH are separated from the shareholders’ private assets, which offers effective protection from private creditors.
2. Limitation of liability: Liability is limited to the company’s assets, the shareholders’ private assets remain protected.
3. Risk minimisation: In the case of high-risk investments or property transactions, the shareholders’ personal assets remain untouched.

1. Centralised management: Various assets can be bundled and efficiently managed under the umbrella of a single company.
2. Professionalisation: The GmbH structure enables professional management by qualified managing directors or external experts.
3. Adaptability: The asset structure can be flexibly adapted to changing market conditions or personal goals.
4. Succession planning: The GmbH structure facilitates the orderly transfer of assets to the next generation.
5. International opportunities: The GmbH can serve as a platform for cross-border investments and asset management.

1. Formation costs: The formation of a GmbH incurs one-off costs for the notary, commercial register and, if necessary, legal advice.
2. Ongoing costs: Annual expenses are incurred for bookkeeping, annual financial statements and tax returns.
3. Managing director’s salary: External management incurs additional personnel costs.
4. Documentation obligations: The GmbH must keep extensive records and minute shareholder resolutions.
5. Time expenditure: The administration of a GmbH ties up time resources that could be lacking for other activities.

1. Strict formal requirements: The GmbH is subject to strict legal regulations, non-compliance with which can result in sanctions.
2. Publicity obligations: Depending on the size of the GmbH, annual financial statements must be published.
3. Complex decision-making processes: Certain decisions require shareholder resolutions, which can limit flexibility.
4. Legal grey areas: The distinction between asset management and commercial activity can be challenging in practice.
5. Management liability risks: Despite limited liability, managing directors can be personally liable for breaches of duty.

1. Double taxation: Distributions to shareholders result in double taxation at company and shareholder level.
2. Trade tax liability: If certain limits are exceeded, trade tax liability may arise, which reduces the tax benefits.
3. Loss offsetting restrictions: Losses of the GmbH cannot be offset against private income of the shareholders.
4. Complex tax planning: Optimising the tax structure requires continuous adjustments and professional advice.
5. Limited utilisation of personal tax allowances: Certain personal allowances cannot be utilised.

Before the actual formation, a thorough analysis of the asset structure and objectives is essential. Clearly define which assets are to be transferred to the GmbH and which strategy you wish to pursue.

Decide who should act as a shareholder. These can be natural persons or other companies. The number of shareholders influences the structure and decision-making processes of the GmbH.

The articles of association are the foundation of the GmbH. It regulates the rights and obligations of the shareholders, the management and the purpose of the company. In the case of an asset-managing GmbH, the agreement must clearly define the focus on asset management as the main activity.

The articles of association must be notarised. The notary checks the legality and advises on possible structuring options.

The statutory minimum share capital of EUR 25,000 must be paid in. In the case of an asset-managing GmbH, this can also be done by contributing assets (contribution in kind). Under certain circumstances, an entrepreneurial company (UG) with a lower minimum share capital can also be used.

At least one managing director must be appointed. In the case of an asset-managing GmbH, the managing director should have expertise in asset management and financial planning.

The GmbH must be registered in the commercial register at the competent local court. Various documents are required for this, including the notarised articles of association and the appointment of the managing director.

A separate business account for the GmbH is required to ensure a clear separation between company and private assets.

The GmbH must be registered with the tax office. Particular attention must be paid here to the correct presentation of the asset management activity in order to avoid categorisation as a commercial company.

Once the company has been founded, the planned assets are transferred to the GmbH. This step requires careful tax and legal planning.

Implement efficient processes for ongoing administration, accounting and reporting.

Natural or legal persons can act as GmbH shareholders.

EUR 25,000 (less than EUR 25,000 for UGs) is required as share capital. This can be provided in the form of cash contributions or contributions in kind (e.g. securities, real estate).

At least one managing director must be appointed, who does not necessarily have to be a shareholder.

The articles of association must clearly define asset management as the main purpose.

A registered office in Germany is required.

The activities must be clearly limited to asset management in order to maintain the status of an asset management company.

Rules on profit distribution, management and decision-making processes should be clearly defined.

The GmbH offers limited liability, but managing directors can be personally liable for breaches of duty.

There are different disclosure obligations depending on the size of the GmbH.

The tax treatment differs from normal commercial GmbHs and requires careful planning.

Trade tax is a critical point for asset-managing GmbHs:

1. Basic exemption: A purely asset-managing GmbH is generally exempt from trade tax as long as it exclusively manages its own assets.
2. Demarcation problem: The boundary between asset management and commercial activity is fluid. Certain activities can lead to commercialisation.
3. Extended commercial infection: Even low commercial income can lead to the entire activity of the GmbH being categorised as commercial.
4. Tax rate: If trade tax liability arises, the amount depends on the local tax rates, which vary from municipality to municipality.

The VAT treatment of an asset-managing GmbH is as follows:

1. Basic VAT liability: The GmbH is an entrepreneur within the meaning of the German Value Added Tax Act and is therefore generally subject to VAT.
2. Tax-free sales: However, many typical activities of an asset-managing GmbH are VAT-exempt, e.g. the letting of residential property or certain financial services.
3. Option for VAT liability: When letting commercial property, it is possible to opt for VAT liability in order to claim input tax deduction.
4. Inputtax deduction: Input tax deduction is only possible for activities subject to VAT.

The inheritance tax treatment of an asset-managing GmbH has some special features:

1. Valuation of the shares: In the event of an inheritance or gift of GmbH shares, the valuation is based on the fair market value.
2. No benefits for business assets: The benefits for business assets (relief discount, deduction amount) generally do not apply to an asset-managing GmbH.
3. Pooling agreements: Under certain circumstances, inheritance tax advantages can be achieved through suitable pooling agreements.
4. Allowances: The personal allowances of the heirs or donees can be utilised.
5. Tax rate: The tax rate depends on the tax bracket and the amount of the taxable acquisition.

An asset-managing GmbH is particularly worthwhile for individuals or companies who want to manage larger assets efficiently and optimise them for tax purposes. It is ideal for investors who want to diversify their investments, protect assets and take advantage of tax benefits, especially when it comes to large capital investments or property portfolios.

The costs for founding an asset-managing GmbH can vary, typically including notary fees, fees for entry in the commercial register and possibly consultancy fees. The one-off formation costs are often between 1,000 and 3,000 euros. There are also ongoing costs for bookkeeping, annual financial statements and any tax advice.

An asset-managing GmbH pays corporation tax on its profits and trade tax if it is commercially active. The exact tax burden can vary depending on the structure of the income and the tax structure. VAT is payable if the GmbH provides services that are subject to VAT.

An asset-managing GmbH may hold and manage assets such as real estate, securities and investments. It may also conduct transactions that are directly related to asset management, e.g. buying and selling property or other assets.

Yes, an asset-managing GmbH can buy and manage property. This is a common practice, as the GmbH structure offers the advantage that the shareholders’ private assets are protected from liability claims and tax advantages can be utilised.

An asset-managing GmbH has a broader base and can manage different types of assets, not just property. A real estate GmbH, on the other hand, concentrates exclusively on the property business. Both types of company offer advantages in terms of tax and liability law, but the asset-managing GmbH offers greater flexibility in terms of the types of assets managed.