Construction—Germany—Q&A guide

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Construction—Germany—Q&A guide
  • 1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?
  • 2. Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?
  • 3. Do local laws provide any advantage to domestic contractors in competition with foreign contractors?
  • 4. What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?
  • 5. If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?
  • 6. Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?
  • 7. Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?
  • 8. Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance rules as government employees?
  • 9. Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?
  • More...

Construction—Germany—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to construction in Germany published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2020).

Authors: Heuking Kühn Lüer Wojtek—Stefan Osing

1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

The first step should be choosing the most suitable corporate or non-corporate structure fitting the size of the operation and the expected business turnover. In Germany, the most frequently met form is a form of private limited company, comparable to a limited liability company or a limited company. For entities that need to set up a joint-stock company, the choice would be the AG form, which is a public limited company. These two corporate forms are more costly to establish than non-corporate structures (eg, civil law associations of entrepreneurs). Civil law associations are also advantageous in matters of compliance and publicity. However, non-corporate structures come with greater risk in terms of the partners' unlimited personal liability. Subsidiaries of foreign companies are also entitled to do business in Germany.

The next step that is required is registration with the companies' register.

The third step is choosing and appointing a managing director or supervisory staff with the required qualifications. When appointed, the name

Popular documents