Globalization Partners

Why Expanding a U.S. Business to Germany is So Challenging

by Globalization Partners
February 2018
Reading Time: < 1 minute

Germany is a top destination when it comes to global business expansion. But due to strict laws, it can be extremely difficult for U.S.-based companies to compliantly hire even one employee.

As Globalization Partners sales associate Kathrin Koedderitz explains, it can take several months to set up an entity, and there are many financial filings to make along the way, so a tax advisor is strongly recommended.

In addition, Germany has a capitalization requirement of 25,000 €, which means these funds would need to be deposited in a German bank before any work were to begin.

This can be a significant burden, especially if a company only needs to hire one or two people.

This is where the Global Professional Employer Organization (PEO) model comes in. Globalization Partners helps companies expand internationally without having to set up a subsidiary overseas, by putting their employees on our payroll and assigning them 100 percent back to the client company.

We follow the absolute letter of the law. That means that we carry an AUG license, which is a requirement for Global PEOs.

For more information on expanding to Germany, check out our GlobalPedia page or get in touch with us directly.

 

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