MarketwireFRANKFURT,GERMANY(November11,2011)MeantimewireBenefitax,GermancharteredaccountantsinFrankfurtamMain,recommendspurposefulpreparationfortheGermanmarkettocompani

eswhowanttoselltheirproductsinGermany.Taxationandorganizationaltrapscanbeverycostly.

AccesstotheGermanmarketisusuallyaccomplishedviaarepresentativeoffice,abranchorasubsidiary.Thosewhoonlydesireasmallin

vestmentwillfoundarepresentativeoffice.SincearepresentativeofficedoesnotexistunderGermanlaw,itistreatedasadirectinvestmen

toftheparentcompany.DisadvantagesoftherepresentativeofficeincludemoredifficultorimpossiblereimbursementofinputVATandth

elackofacceptanceamongGermancustomers.OliverBiernat,managingpartneratBenefitaxGmbH,warns:"Whenarepresentativeoffi

cepursuescertainactivitiesinGermanyforlongperiodsoftimeortheGermanemployeeshavefar-

reachingpowertocontract,apermanentestablishmentisinvoluntarilyfounded.Inthiscase,thefiscalauthoritieswilldemandbookkeepin

gunderGermanlawandthetaxationofprofitsallocatedtoGermany."

Abranchregisteredinthecommercialregisterisanalternative.Brancheshavetomaintainaccountingrecords,determineprofitsandpay

taxonthesame.Intermsofincometaxation,thereislittledifferencecomparedtoaGermansubsidiary.However,the"standing"ofbranche

sislessfavorable.Theparentcompanyalsohasdirectandunlimitedliabilityforobligations.ThisiswhycharteredaccountantBiernatadvi

sesfoundingasubsidiary.

ThelegalformofGmbHisalmostalwaysrecommendedforsubsidiaries.Priortofounding,itisnecessarytoverifywhetherthecompanyna

meispermissible.ThefoundingshareholdersshouldcometoGermanyforthefoundation.Sincetheexistenceoftheforeigninvestorsfro

mcertaincountries

(e.g.India),duetothelackofanofficialcompanyregister,arenotrecognizedinGermany,theGermanembassyshouldbecontactedtoclar

ifywhethertheregistrationcourtcanentertheGmbHintotheGermancommercialregister.Otherwisedetoursarerequired.

Banksareobligatedtoexaminenewcustomersforsuspicionofmoneylaundering,andsometimesrefusenewcustomersfrom"critical"co

untries.Thisiswhyvariousbanksshouldbecontacted,sincetheentryinthecommercialregistercanonlytakeplaceifatleast50%

oftheminimumsharecapitalofEUR25,000hasfirstbeenpaidintoabankaccount.

BasedonbadexperienceswithVATcarouseltransactions,thefiscalauthoritiesexaminethetaxregistrationoftheforeigninvestorindetail

beforeissuingataxnumber.Invoicescannotbesentoutwithoutataxnumber.Ifalldocumentsareissuedimmediately,aGmbHcanberegis

teredandreadytooperatewithintwoweeks.Formoreinformationandtoorderour"LawandTaxGuide",visit:www.benefitax.com.Tobeco

ntinued.

BenefitaxisataxconsultingandpublicauditcompanyinFrankfurt,Germany,focussingonfinancialadministrationofforeignownedGerm

anentitiesandinternationaltaxation.

ContactInformation

BenefitaxGmbH

Attn.Mr.OliverBiernat

ManagingPartner

Phone:+49(0)69-25622760

E-Mail:[email protected]">[email protected]

Internet:www.benefitax.com