Germany's two main limited-liability structures are the GmbH (requiring €25,000 share capital, minimum €12,500 paid in at formation) and the UG (haftungsbeschränkt) — a 'mini-GmbH' startable with as little as €1, but required to retain 25% of annual net profit as reserve until reaching €25,000, at which point conversion to a full GmbH is possible. Both offer limited liability and full foreign ownership with no restrictions. Every GmbH/UG is legally required to use double-entry bookkeeping from day one, with no revenue-based exceptions (unlike sole traders, who only face full accounting obligations above €800,000 revenue or €80,000 profit/year).
GmbH: €25,000 share capital required, minimum €12,500 paid in at formation.
UG (haftungsbeschränkt): startable with as little as €1, but must retain 25% of annual net profit until reaching €25,000 reserve, then can convert to GmbH.
Both structures permit 100% foreign ownership with no restrictions.
Double-entry bookkeeping is mandatory from day one for both GmbH and UG, with no revenue-based exemption (unlike sole traders).
Choosing a UG purely for the low starting capital without planning for the mandatory 25% profit-retention requirement until reaching €25,000.
Assuming small UGs get a bookkeeping exemption similar to small sole traders — double-entry bookkeeping is mandatory for GmbH/UG regardless of size or revenue.