Setting Up a GmbH or UG in Germany: Why Video Notarization Doesn't Solve the Problem for Most US Founders

Germany made GmbH formation possible entirely by video call back in 2022, and if you've read about that change, you might reasonably assume it eliminated the apostille question for U.S. founders entirely. It didn't, and understanding why is the first thing to get right before planning a German entity formation timeline.

Here is how GmbH and UG formation actually works for a U.S. company, what the notary requires from your side regardless of which formation route you use, and where the real bottleneck in this process tends to sit.

GmbH or UG: The Capital Structure Difference

A GmbH requires €25,000 in total share capital, with at least €12,500, half of it, actually deposited before the Handelsregister will register the company. A UG, sometimes called a mini-GmbH, can start with as little as €1 in nominal capital, but the full amount has to be paid in cash before registration, and the company must reserve 25% of its annual profit until accumulated reserves reach €25,000, at which point converting to a full GmbH is standard practice, mainly because the UG designation signals undercapitalization to banks and suppliers in a way that affects how the business is perceived.

For straightforward formations with up to three shareholders and one managing director, Germany offers a simplified standard template, the Musterprotokoll, which can speed up the notarial process compared to fully custom articles of association.

The Notary Requirement Cannot Be Avoided, Video or Not

Every GmbH and UG formation requires notarization by a German civil law notary, a Notar, who is a substantially more involved figure in this process than a U.S. notary. This requirement exists regardless of which formation route you use.

Since August 1, 2022, Germany's DiRUG legislation allows fully remote GmbH formation through a video notarization platform run by the Federal Chamber of Notaries, which sounds like it should eliminate travel and paperwork for U.S. founders entirely. In practice, most non-EU founders, Americans included, lack a compatible electronic identification credential the video system requires, which means most U.S. founders end up on one of two practical paths regardless of the 2022 reform: appearing in person at a German notary's office themselves, or granting a notarized, apostilled power of attorney to a representative in Germany who appears on their behalf.

There's a further wrinkle worth knowing even for founders who can use the video system. German notaries and authorities still require proof of a foreign entity's existence and authority to be apostilled or otherwise legalized, and the online notarization process has no digital pathway for submitting that proof. It still has to be mailed or couriered to the acting German notary in paper form, even when the notarization itself happens by video call. The 2022 reform streamlined the German side of the process. It didn't change what your U.S. documents need to satisfy before they reach that notary.

What Gets Apostilled, and What Doesn't

If your German entity is being formed as a subsidiary of a U.S. corporation rather than by individual founders, the parent company's Certificate of Good Standing and Articles of Incorporation are apostilled directly by the state that issued them. A board resolution authorizing the German formation, and the power of attorney appointing a representative to appear before the German notary, are private documents requiring notarization first, with the apostille issued by the state where that notarization actually took place, not necessarily the state of incorporation.

Worth knowing specifically: passports used purely for identity verification at the notary's office generally do not require apostille. Not every document that touches this process needs the same treatment, and confirming which ones actually do before authenticating everything indiscriminately saves real money.

One reassuring point for American founders specifically: Germany has bilateral treaties with a handful of countries, Austria, Belgium, Denmark, France, and Italy among them, exempting notarized documents from those countries from the apostille requirement. The United States is not among them, so there's no ambiguity here, U.S. documents need the standard apostille treatment, full stop.

The Bank Account Sequencing Problem

At least €12,500 has to be deposited into a German bank account held in the company's name, "in Gründung," before Handelsregister registration can be finalized. Opening that account is frequently the hardest single step for a non-resident founder with no existing German banking relationship, and it creates a genuine chicken-and-egg dynamic: the company needs the account before registration, but the account itself can be difficult for a foreign entity with no German presence yet to open. Plan for this specifically rather than assuming it's a formality that happens quickly once everything else is ready.

Your Home State's Apostille Turnaround Is Often the Real Bottleneck

Total formation timelines commonly run four to eight weeks, and the German side, notarization, capital deposit, and Handelsregister filing, is frequently not what determines that length. State apostille processing times vary enormously: some states turn around a document in two to three days, others can take up to six weeks depending on current volume. If your formation timeline is tight, confirming your specific state's current apostille turnaround before you're relying on it is worth doing early, since it's genuinely more likely to be the pacing factor than anything happening in Germany.

Translation

Foreign corporate documents generally need certified German translation, and the apostille certificate itself is typically part of what gets translated. Complete authentication first, then translate, since reversing the order means the translation has to be redone.

A Brief Note on U.S. Tax Compliance

Owning a German GmbH creates U.S.-side reporting obligations independent of anything covered here, including FBAR filing for signature authority over the company's German bank account and Form 5471 for the corporate ownership itself, along with GILTI considerations under U.S. tax law. None of this touches document authentication directly, but it's worth having your U.S. tax advisor involved from the start rather than treating German formation as a purely foreign legal matter.

Where German Entity Formation Loses Time

• Assuming video notarization eliminates the need for apostilled U.S. documents, when most American founders can't use the video system's ID verification anyway, and even those who can still need paper-form apostilled proof of the foreign entity

• Underestimating home-state apostille turnaround, when this is frequently the actual bottleneck rather than anything happening in Germany

• Waiting to address the German bank account until after other formation steps are complete, when it can be the slowest part of the entire process

• A board resolution or power of attorney with vague authority rather than one naming the specific formation and the specific representative

• State-issued documents sent to the wrong state, or private documents authenticated in the state of incorporation instead of the state of actual notarization

• Apostilling a passport used only for identity verification, when this generally isn't required

• Translation completed before the apostille is attached, requiring the work to be redone

Send Us Your Formation Documents

American Apostille handles authentication of U.S. corporate documents for German GmbH and UG formation, Certificates of Good Standing, Articles of Incorporation, board resolutions, and powers of attorney for a German notary appointment, from any U.S. state. We can arrange the U.S. notarization these documents require.

Tell us which formation route your German notary or counsel has confirmed, video notarization with an in-Germany representative, or an in-person appointment, and what they've specified for the power of attorney's wording. We will tell you which documents can be authenticated as they stand and how your specific state's apostille timeline holds up against your formation schedule.

American Apostille Email: Jared@ApostilleLLC.com Phone: +1-848-467-7740