Why Opt for a Ready-made Company in Germany Instead of Registering a New One?

Shelf companies have been around for some time in Germany, as they are convenient if you want to launch a business as soon as possible. However, nowadays, registering an enterprise from scratch takes less time than a few years ago, for example. So, the question that arises is: is it still worth it to choose a German shelf company instead of going through the regular company incorporation procedure? Yes, it is, and below we also explain why.

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No bureaucracy

Even in countries where there is no bureaucracy, there are still some legal hurdles you need to go through, and you will meet most of them when first registering a business. If you buy a shelf company, on the other hand, you will skip requirements that may pose various problems, among which:

• the lack of certain documents;
• difficulties in reserving a trading name, as it is already taken;
• document translations and notarization;
• language barriers, as German is still a hard language to learn.

Even when these obstacles are easy to overcome, you still do not want to go through them, so buying a shelf company is the easy choice.

The business registration process is still not sufficiently streamlined

Even if simpler, the registration of a new company in Germany does not compare to how quickly you can purchase a ready-made business. With this said, a major advantage of aged companies is that you can buy them in just a few days, sometimes, as quickly as 2 days if you find what you need and move fast to seal the deal. By comparison, incorporating an entity from scratch can take up to 2 weeks, which may seem a lot for a person who wants to start operating sooner rather than later.

A shelf company is business-ready immediately

Yes, one of the benefits of buying a ready-made company in Germany is that you can start your activities right away. You can either initiate trading or enter into contracts and then complete the amendment phase with the Commercial Register. Either way, you will have a fully functional enterprise as soon as you buy it.

Ready-made companies offer credibility

If there is one thing everybody knows about Germans is that they can be sceptical about people and companies they do not know. This is a key advantage of a shelf company: as it was kept dormant and without debts, it will have that pristine background you need to start entering partnerships with German associates or even with the authorities, depending on your area of operations. 

Easier access to financing

With all the preparation, financial and business planning, entering the German market can still surprise you. The easiest course to follow is to access a loan. However, banks will favor older companies that have a clean track record. This is where a shelf company has probably the best advantage over a newly registered one. Even if it is not impossible to get financing for a new business, the conditions will probably be more stringent, in which case, it definitely makes sense to use a vehicle that helps you to an easier start.

Precautions to consider

Sometimes, shelf companies are surrounded by rumours that say you need to be careful when buying them. While it is true that you should check the seller, this is a simple process you can go through. For example, you can request professional vetting services, such as those provided by BridgeWest Germany, and verify both the seller and the desired company. Even if in most cases there are no hidden issues, it is still good to complete the due diligence.

Should you opt for a shelf company or register a new one? Ultimately, the decision is up to you, but ready-made entities can definitely open some doors more easily than others. Apart from this advantage, in Germany, you can choose between multiple sellers and businesses, and it feels good to have a variety of choices.

Disclaimer: the author(s) of the sponsored article(s) are solely responsible for any opinions expressed or offers made. These opinions do not necessarily reflect the official position of Helló Magyar, and the editorial staff cannot be held responsible for their veracity.

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