Distribution and agency—Germany—Q&A guide

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

  • Distribution and agency—Germany—Q&A guide
  • 1. May a foreign supplier establish its own entity to import and distribute its products in your jurisdiction?
  • 2. May a foreign supplier be a partial owner with a local company of the importer of its products?
  • 3. What types of business entities are best suited for an importer owned by a foreign supplier? How are they formed? What laws govern them?
  • 4. Does your jurisdiction restrict foreign businesses from operating in the jurisdiction, or limit foreign investment in or ownership of domestic business entities?
  • 5. May the foreign supplier own an equity interest in the local entity that distributes its products?
  • 6. What are the tax considerations for foreign suppliers and for the formation of an importer owned by a foreign supplier? What taxes are applicable to foreign businesses and individuals that operate in your jurisdiction or own interests in local businesses?
  • 7. What alternative distribution relationships are available to a supplier?
  • 8. What laws and government agencies regulate the relationship between a supplier and its distributor, agent or other representative? Are there industry self-regulatory constraints or other restrictions that may govern the distribution relationship?
  • 9. Are there any restrictions on a supplier’s right to terminate a distribution relationship without cause if permitted by contract? Is any specific cause required to terminate a distribution relationship? Do the answers differ for a decision not to renew the distribution relationship when the contract term expires?
  • More...

Distribution and agency—Germany—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to distribution and agency in Germany published as part of the Lexology Getting the Deal Through series by Law Business Research (published: January 2021).

Authors: Taylor Wessing—Dr. Benedikt Rohrßen; Dr. Martin Rothermel

1. May a foreign supplier establish its own entity to import and distribute its products in your jurisdiction?

Yes. However, specific restrictions may apply if (foreign or domestic) investors do business in the defence, pharmaceutical or financial sectors.

2. May a foreign supplier be a partial owner with a local company of the importer of its products?

Yes. There is no specific investment legislation and no minimum percentage of German shareholders required.

3. What types of business entities are best suited for an importer owned by a foreign supplier? How are they formed? What laws govern them?

The types of business entities that are best suited are:

  1. limited liability companies (GmbH and UG);

  2. stock corporations (AG); and

  3. limited partnerships (KG).

The criteria for the choice of entity used are liability, taxation, financing, personal involvement and control, and flexibility. For larger companies, a GmbH or an AG are typically best suited. Their shareholders' liability is limited to the respective share capital.

The minimum share capital varies between €50,000 (AG), €25,000 (GmbH) and €1 (for the GmbH subtype, UG). The transfer of shares in a GmbH or a UG typically has to

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