GmbH vs UG: which structure fits your scale?
Share capital works differently in Germany. Here is how to think about the choice as a US or LATAM founder.
Share capital and formal requirements
The GmbH is Germany's standard limited liability company and requires €25,000 of share capital, half of which must be paid in at incorporation. The UG (haftungsbeschränkt) is a lighter variant that can be founded with as little as €1 in capital, at the cost of certain reserve obligations.
When each structure fits
For most funded startups entering Germany the GmbH is the right long-term structure. The UG is useful as a fast market-entry vehicle when speed and cost dominate the decision — for example when a US parent needs a signing entity for a first pilot contract.
A UG can later be converted into a GmbH once retained earnings reach the €25,000 threshold, so choosing UG first does not lock you out of the standard form.
Frequently asked questions
Can I found a GmbH remotely from the US or LATAM?
Does a UG signal a smaller company to German buyers?
Full Launch — fixed price German entity setup
GmbH or UG incorporation, notary coordination, and core commercial contracts.
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