When does a branch office in Germany have to be registered as a branch office?

A branch office of a company in Germany must be registered as a branch office in the commercial register if certain legal and factual criteria are met. The main prerequisites for the registration requirement are:

1. The concept of a branch office

A branch is a legally dependent but economically and organizationally independent entity of the main company. It must have the following characteristics:

• Independent management: The branch has its own management that makes decisions independently of the head office.
• Permanence: It is not only temporary, but established for a certain period of time.
• Appearance to the outside world: The branch office acts independently in legal and business matters, e.g. with its own address, name and business operations.
• Bookkeeping: The branch office keeps its own accounts, which are at least partially independent of the head office.

If these characteristics are not fully met, it is usually only a dependent branch or a permanent establishment that does not require entry in the commercial register.
 

2. Registration requirement

The registration requirement is based on the provisions of German commercial law, in particular the provisions of the German Commercial Code (HGB):

• § 13d HGB: Foreign companies that establish a branch in Germany are required to register.
• § 53 HGB: German trading companies (e.g. GmbH, AG) are also obliged to have their branches entered in the commercial register.

The entry is made in the commercial register of the local court responsible for the place where the branch is located.

3. Foreign companies

Additional requirements apply to foreign companies that wish to operate in Germany:

A branch office must be entered in the commercial register if it is classified as such under German law (see criteria above).

In addition, certified and translated documents from the head office must be submitted, e.g. commercial register extracts and articles of association.

4. Differentiation from a permanent establishment

A simple place of business or dependent branch (e.g. an office without independent management) does not require entry in the commercial register. Typical examples of this are:

• purely representative offices without operational business
• service offices that only perform supporting activities for the head office

These facilities remain relevant for tax purposes and may have to be registered with the tax office.

5. consequences of non-registration

Failure to register a branch office can have legal consequences, for example:

• fines imposed by the relevant commercial registry authorities
• problems in the legal enforcement of claims
• legal uncertainties in business transactions

6. Conclusion

A place of business in Germany must be registered as a branch if it acts independently and fulfills the above criteria. It is advisable to have the exact classification legally examined in order to fulfill both legal and tax requirements.

If you require further advice on this, we can help you structure the registration process and provide legal protection.