Legal Structure: Acquisition of a GmbH vs. an UG for International Business Buyers
Legal Structure: Acquisition of a GmbH vs. an UG for International Business Buyers
For international business buyers, what are the advantages and disadvantages of acquiring a German GmbH versus an UG (mini-GmbH)?
2 Answers
Acquiring a German GmbH offers credibility, higher capital base, and easier access to financing, but involves higher purchase and maintenance costs. An UG (mini-GmbH) requires less capital and is simpler to set up, yet may face credibility issues and stricter profit retention rules, making growth slower.
For international buyers, a GmbH offers strong credibility, limited liability, and easier access to bank financing, making it ideal for established businesses, but it requires a higher minimum share capital (β¬25,000). A UG (mini-GmbH) is cheaper to start (β¬1 minimum capital), quicker to set up, and allows testing a new market, but it can feel less stable to partners, may face banking hurdles, and often needs to retain profits until it builds equity. Emotionally, choosing between them is about balancing security and credibility versus speed and affordability the GmbH feels solid and reassuring, while the UG feels agile but requires careful management to gain trust.