Partial sale land

First of all, let’s start with the basics, for those who have only heard of the “partial sale of a property”.

What does partial sale mean? How does a partial sale work?

A small definition – The principle behind the partial sale, is based on the sale and a subsequent royalty that you pay to your new part owner. So from the understanding the “user fee” is simply explained, with the comparison to rent or lease.

Partial sale at a glance:

• You sell a share (usually 10% – 50%)
• Financial company becomes part owner
• You retain the full right of use
• For this you pay a usage fee

Still in operation, whether in NRW or elsewhere:

Differences in the user fee

When buying a plot of land, it basically comes down to one factor, how big is the usage fee? Should you not have to sell very quickly, due to liquidity, you should think about the alternative mortgage loan anyway. Because, the user fee (disadvantage) is usually between 3 and 5% in the partial sale of land.

• Usage fee depending on provider: 3-5% p.a.

Example:

• Sold share: 100,000 euros
• User fee: 3-5% p.a.
• Cost: 3.000 – 5.000 Euro / year

So you pay an annual fee of 3,000 to 5,000 euros for the share sold worth 100,000 euros.

How is the value of your property determined?

If you do not know the current value of your land, it still needs to be determined. Central to this are, among others, key figures (such as the land area), its use (undeveloped land or used agricultural land, forest, springs, etc.). Important is the standard land value, which you can find in the standard land value map, but also an expert opinion. This is ultimately the basis for the concrete valuation.

Read more about the topic here:

• Rate property

Of course, the most sought-after are plots of land in the urban area, but many also sell agricultural land.

Comparison: mortgage loan on land

Compared to the mortgage loan, where you pay only 1%, already a significant disadvantage of the partial sale. In return, you do not have to go through the credit check of the banks. Another advantage, they get the purchase price almost immediately transferred.

At 1%, the annual savings are already 2,000 – 4,000 euros. In 10 years, a considerable difference.

• Advantage: More favorable conditions
• Disadvantage: Credit checks

So, if you have a lack of liquidity, so that you are forced to sell a plot of land immediately, then a partial purchase is a possible option. Because you save many steps in the sale of land.

On the other hand, you have high follow-up costs. Therefore, a comparison is worthwhile! Sale? Partial sale? Mortgage loan on the property? My recommendation is clearly the mortgage loan, because with it you save 2/3 of the costs (comparison partial sale). If you need money fast, really fast, the partial sale is definitely an option.

So always consider both options, partial sale and real estate loan.

Step 2: Total sale from the plot

All partial sale providers also give you the direct option of selling your property in full in the foreseeable future. The buyer is then the previous part owner, who thus becomes the sole owner of the property.

Here I give in the guide partial sale property still 2 valuable tips:

1. Total sales and inflation
2. Agree usufruct

Quickly explained:

Total sales and inflation

Assuming you sell in 15 years, inflation (demonetization) has increased ~ 32%, at 2% / year. So if you are made offer below 32% appreciation, not even inflation is compensated. That’s why it’s worth taking a look at the provider comparison.

Agree usufruct

If you want to sell your property outright but continue to use it “until the end of your life”, agree on usufruct. The usufruct guarantees you a right of use until the end of your life (non-transferable).

Staying liquid.

How does the part sale of a plot of land?

Let’s briefly summarize the findings again:

Difference sale and partial sale

In the regular sale of land, you sell your entire property, which means 100% of the shares of land. In case of partial sale of a land plot, you sell only a part of the property (land plot).

Most partial sale providers buy between 10%, 20%, 25% or even 50%, that is half of your property. For this you usually get, quickly and easily transferred the purchase price. This is the great advantage of partial sale!

Usage fee after the partial sale

For the further, sole use, you have to pay a monthly usage fee, the so-called usage fee. Depending on which provider you choose for the partial sale of your land, the amount varies from 3% to 5% (of the purchase price per year). Compared to the mortgage loan on your land (only 1%), already a significant difference for land sales.

Conclusion: partial sale of land makes sense? 3 options

Partial sale – If you need money fast, really fast (within a few weeks), due to cash shortages, then partial sale of your property is an option.

Sell and lease – Should you have a little time (more than a few weeks) you should rather think about selling your property and then lease it. Because especially in terms of inflation (total sale in the second step), you have some disadvantages in the partial sale.

Mortgage loan on your property – Important, talk to your bank. Even at an older age you can get loans. Many people are afraid of this and say “I won’t get a loan from the bank anyway”. Wrong! Therefore, talk with your bank and with 2, 3 alternatives. This way you pay only 1% instead of 3-5% (at the current interest level).

Tip. Also an option for forest areas with further management:

Partial sale XL: speculation tax, community of heirs & Co.

Read more about partial sale here – A look at costs of use, advantages, disadvantages, taxes, sale from joint heirs, divorce and much more. My recommendations for sellers!

• Partial sale property
• Partial sale provider comparison

Selling land: Agricultural land, meadow, acre & Co.

You may have already read our great guide on selling land, or perhaps you have read more specific guides, for example on selling woodland land.

For those who are dealing with the matter of land sale for the first time, the question surely arises:

• How do I sell my agricultural land?
• Which step do I start with?
• Who advises me, prepares expert opinions & Co.

Here are a few pointers for selling farmland, agricultural land and other, more specific land. You can also read more about the process, mistakes and risks, as well as taxes when selling land.

Sell privately or with a professional?

The question is answered relatively quickly. There are various parameters that influence the selling price. These include, for example, the property valuation, as well as a solid and capital-strong buyer network, but also negotiating skills. After all, it is not “only” about a condominium, but about more complex, agricultural usable areas, with all the addition around soil expertise, forecasts and development possibilities.

Minimize effort, maximize profit

Selling agricultural land privately, for example through real estate portals, not the best idea.

1. What do you do with all the requests?
2. What documents, papers and expert opinions do you need?
3. Who sends info and makes phone calls for questions?
4. Who really has the credit rating and willingness to buy?
5. How many surveys do you want / need to do?
6. Who prepares and conducts the negotiations?
7. …

From credit rating (creditworthiness) to viewing appointments and negotiations: Time is money. Therefore, in this country 70% + sell with the help of professionals, such as an estate agent.

Sell privately?! Risk private sale

Time is of the essence. If you are not under pressure to sell, excellent. Then you may be able to make a mistake or two. But who wants to do that? Here is a recent example of a client who wanted to sell his property in Berlin. Private.

Example of agricultural land in the Berlin hinterland

Here is an example of a client who approached us, a typical case. It was an area in the Berlin area that was to be sold. The mistake in brief: private sale without sufficient credit check or financing confirmation from a bank. The result: months of delay and abandonment.

The seller has advertised privately on a known portal. Promptly came many messages, but almost all conversations ran into the void. Weeks passed.

Error: Insufficient creditworthiness and verification

After months, finally found a person who had the will and the credit rating – supposedly. So after the site visit talk about checking the financing, by the buyer’s bank and wait. Again, a few weeks pass.

Then you get after further weeks a feedback from the buyer and/or prospective customer that the financing was rejected with the first bank, therefore now with a second house bank one inquires. You wait.

After another few weeks passed, he still had no confirmation of financing from a bank, no preliminary purchase agreement, and no notary appointment.

Conclusion – pressure and frustration:

Suddenly there is more and more pressure to sell, and at the same time frustration rises.

You wouldn’t believe how many private sellers have this exact story happen to them.

That’s why over 2/3 of the properties are sold with professionals on the side (brokers and the like).

Professional land trading for agricultural land

Preparation is the key so that you do not lose months in the sale of A and B locations, and even years in C locations.

Preparation is the key: even with agricultural land

However, the work starts much earlier, which is another reason why working with a broker is advantageous.

Tip on the broker’s commission! Privately, the law currently provides that 50/50 is shared (buyer, seller). In commercial trade you can also put 100% on the buyer.

So, in principle, in the commercial trade it does not even cost you money. For this you get the network when it comes to a reputable real estate dealer.

• What documents and papers do you need?
• Which groups of buyers are you addressing with this particular property?
• Do you want everyone to know you want to sell your farmland?
• Should everyone know the value (your asset growth)?

Discretion: neighbours, envy and competition

In addition to the time factor (= money), for many sellers of agricultural land is also important that your property is made discreet, anonymous. From competition in the region to family, the neighbors or even receiving large sums of money. There are several reasons why a majority of sellers want to sell anonymously and discreetly.

Personal network: buyers and investors

Professional property trading looks quite different, of course. Here it is not about marketing in real estate portals, personal buyers are adressed, investors, funds but also foreign investors groups.

Investors from abroad: Profitable business

Foreign investors for a farmland? Yes! Many are looking for good returns and capital investment in this country. Due to the attractive returns in this country, but also the good soil quality and water quality (groundwater and water sources) in general, there are also very many investors from near and far abroad looking for land.

The big advantage for you as a seller, here the money sits a little looser than in the country – simply said.

Central for this is of course again a renowned real estate agency.

Exclusive is fast: supply and demand

Another strong advantage for you on the seller side:

Deals are being closed much faster.

Why? The properties are traded exclusively and the offers are made only to individuals. This exclusivity ensures the scarcity of supply and thus increases the demand on the customer side.

Time is money! Especially wealthy customers do not want to waste time

Wasting time, in which, for example, several interested parties are at one property. Business should be done quickly.

Find a real estate agent: Renowned office or from the region?

Therefore, consider working with a regional real estate agent who does what everyone does: Posting your farmland widely on all real estate portals. After that, hundreds of people will write, there will be many conversations, emails, plus phone calls. Very much time passes, few really have the creditworthiness, the will, as described before.

The process of finding a farmland takes months, sometimes even years.

Time is money! Addressing investors

Here is another psychological aspect that gives you advantages in off market trading:

When professional investors or their employees see that properties are listed on real estate portals, the question immediately arises: Why? Why has the property not found a buyer? No one would even continue to deal with this object. After all, there are thousands of advertisements. Who is supposed to see through all of them?

Family offices, real estate funds, etc.

Family offices, real estate funds and others therefore speak directly with renowned real estate offices and have only exclusive properties presented to them. Then everything goes very quickly.

In the off-market area, you will find the big family names, i.e. family offices, real estate funds, other institutions, which are approached individually and specifically, depending on the purchase profile.

This is all called off market trading.

Selling farmland: Procedure, taxes and tips

Would you like to learn more about selling agricultural land? Then take a look at our detailed guide on the subject of selling land. Here we talk about the concrete procedure, in all the individual phases of the sales process. You will learn more about the typical mistakes that are made when selling and of course everything about taxes when selling land.

• Sell land

Agricultural land / field with spring?

Selling a water well – appraisals, brokers, negotiations, process and taxes, there are also many questions when selling a water well. Is now the right time for you to sell? And if so, what is the most effective way to sell? Water is a scarce resource. Even though over 71% of our planet’s surface is water, there are fewer and fewer productive, clean water sources. Low supply, high demand: don’t just think regional buyers, think mutual funds and yes, food companies too. For that, you need a broker with an exclusive network. Whether a sole proprietor or a water cooperative, learn about the matter of selling here.

• Sell field with spring

Villa, property, new building & Co. – risk and mistakes

Important, this article refers to the sale of:

• Exclusive properties like villas
• Large properties such as new buildings
• Special projects such as land, forest land, agricultural land & Co.

If you “just” want to sell a condo or “just” a house, then read on here: the 15 most common real estate selling mistakes.

Everyone tells you about the typical mistakes, here are the additional real insights for selling real estate!

Preface: Mistakes are human and (!) avoidable

There are the typical mistakes that exist when selling apartments, houses and land. Mistakes that you will also find on all websites!

You may have come across lurid headlines like “Avoid these 7 mistakes” or even “10 mistakes you should avoid” and of course even better “the 11 biggest mistakes when selling real estate” when researching the sale of your property. These “typical” mistakes when selling real estate, you already know from the article “15 mistakes you should avoid”.

Errors are quite normal, because as mentioned in the introduction, only a little over 271,000 properties are sold per year, let’s look at the German real estate market. A significant proportion of these are also purely B2B (i.e. from company to company). So hardly any private sellers know about the risks.

Checklist: 15 mistakes summarized

These really typical mistakes are also quickly enumerated:

1. Too little time planned for sales – Little time? Already comes pressure
2. The wrong time to sell – Situation and economy
3. Inaccurate description of the property – Exposé is written unprofessionally
4. Unfavourable photos in the exposé – Just like exposé, hardly any demand
5. Wrong target audience and strategy – For example, student apartment in newspaper instead of social media.
6. Value of the property is incorrectly assessed – properties do not find buyers
7. Documents and proofs are missing – Documents are not available
8. Property is not prepared for viewings – Does not convince prospective buyers on site
9. Underestimated effort of the sales process – So many get under pressure, e.g. if the new property is already financed
10. Sale and negotiation are considered easy – preparation is then only half-hearted and leads to purchase price losses
11. Selling phase is designed alone – selling privately without estate agent and expertise
12. Prospects stall too long – Valuable time is lost, property is burned by long listing time
13. Proof of financing (buyer) – creditworthiness of buyer not checked
14. Defects in the purchase contract are overlooked – rights but also deadlines
15. Burn property – Large or exclusive properties in mass portals

For small objects that are in private sale, certainly always a nice, first overview. But as soon as it is no longer “only” about 100,000 euros, but perhaps even about 1 million, 3 million or even 10 million, there are completely different factors that are important.

Golden rule for real estate: exclusivity as a sales factor

Rule number one:

The most important thing, exclusivity in the sale, when it comes to objects > 1 million euros.

Why? You can find out here, in this article.

Real estate in comparison

Let’s first look at the different types of buyers and how they review and value properties. The word “ETW” stands for condominium. We look at 4 groups of buyers:

1. Group: ETW / house 80sqm ~ 200.000 rather indifferent; means also the buyer side is mostly inexperienced, it is less examined
2. Group: 150sqm ~ 900.000 / critical buyer
3. Group: 200sqm ~ 1.200.000 / researching buyers
4. Group: 250sqm and over 1.5 M / examining buyer
5. Group: large properties, new construction, agricultural land, etc. – special real estate / very experienced buyers, mostly with their own real estate office

Group 1-3, i.e. properties up to 200sqm, are mostly in the regular property market, in which “only” private individuals are interested. The typical marketing strategy here is: A lot, helps a lot. Often 2, 3 brokers are commissioned and the property is already in 4, 5 portals, newspapers, maybe even on social media networks.

Group 4 buys properties over 200 sqm, but still private. Who buys in this segment, is usually already experienced and knows, with building fabric, appraisers and so on. At the latest here it needs the help of a broker in negotiations.

Group 5 buys properties in the flow. 50 units (i.e. apartments) a quarter or even a month. Some investors buy 1,000 units directly, whether in A-location, B-location or even C-location. Properties in need of renovation, former hotels that are converted into condominiums or even forest land, agricultural land, old prefabricated buildings, etc.

Rule number 2, from group 5:

Time is (usually) more important than money

Group 4 and 5 need exclusive intermediaries, anonymous real estate sales, instead of “broad” mass and marketing, with direct line to investors, real estate funds and family offices.

Family offices (investors) and funds, rather than private individuals

If you want to achieve a high purchase price when selling real estate, you have to consider a few things, especially rule number 1: Exclusivity!

Real estate investors, family offices, any kind of “institution” check real estate offers and they prefer anonymity when buying and selling real estate. It is not only about exclusive villas, but especially about new construction, apartment buildings, neighborhoods, building plots and much more.

So to be separated are individual units like apartment, house, row house, duplex, etc. from:

1. Real estate with several units (terraced house, neighbourhood, street…)
2. Exclusive real estate of wealthy and or well-known persons

Such objects should not appear in public portals, because ideally, only 1 interested party should exist, who quickly and immediately becomes a buyer. For objects over 5 million euros (read our purchase profile here), time is the most valuable factor.

Buyers must have a solid financial background, capital proofs should not be a problem. Knowing these specific real estate investors, private individuals and investment groups is our job. Accordingly, over 99% of our properties never show up anywhere!

Thus, the placement does not take months, but sometimes only 7 to 10 days.

The big advantage of off market real estate and selling to private individuals, family offices and others:

• Anonymity of buyers and sellers
• Good purchase prices, through exclusive offers

Apartment house in A-location with development potential.

Real estate burn – 10 portals, 10 brokers, … Danger

Real estate agent and real estate portal have risks? Yes, exactly.

Too many advertisements – Error 1

The big danger is this, your property is in portal 1, portal 2, portal 3, so solid buyers will be wondering:

Why is this property listed in so many portals?

Why. Real estate buyers compare offers (see group 1-5 above). So as soon as duplicates show up, people start to get skeptical:

• Why does real estate need so much marketing?
• Are there any drawbacks to the property?
• Is the purchase price way too high?

If your offer now stands between thousands of others, the probability to find interested parties decreases, as well as with the typical mistakes when selling real estate.

Too many brokers – mistake 2

Accordingly comes the 2nd fatal mistake that drives many private sales down in price: Because the object was not sold quickly, a second broker is called in, perhaps even a third, fourth and fifth broker.

You wouldn’t believe how often that happens. Even with high-priced properties from 10 million.

Danger: The object is burned.

Factors for the sale: buyer and psychology

Real estate is subject to 2 factors:

• Number-based
• Emotion-based

Emotions are quickly explained: everyone likes to buy nearby, they know their way around here. If it were purely a matter of numbers, there are usually always interesting alternatives (locations) with better returns. This means that emotional factors also play a role.

Of course, a “burnt property” does not mean that you lose 70%, 80% of the purchase price, but it delays the sale of real estate, sometimes even in the years. Especially in the case of houses. Often private sellers then have to accept a lower offered price.

After all, at some point it will have to be sold, especially if a new property has already been financed, whether the move is done or the new love lives in another city.

Anonymity, exclusivity: off market to known buyers

Selling anonymously isn’t just important for construction companies, these two groups usually don’t want to attract attention either:

1. Wealthy individuals and public figures
2. Disposal before inheritance

Wealthy individuals and public figures – In addition to price, there is the notoriety of the owners described earlier. In particular, wealthy individuals and public figures do not want their properties to be open to view. Whether fans or members of the press, anonymity is considered very, very important in millionaire circles.

Then there is another group that prefers to sell anonymously and thus at the same time benefit from the effect of the exclusive sale, a higher purchase price.

Sale before Inheritance – Even on the subject of selling property before death, there are many people who do not want their own children or closer relatives, often even neighbours to know about the property sale. This could lead to disputes before a sale is completed.

Tip. Are you still thinking about whether to sell or bequeath? Learn how to do it here: Bequeath correctly. Also for your children and loved ones: Inherit correctly.

Scarcity effect due to exclusivity: influence purchase price

This shortage (i.e. the targeted approach of individual investors) also has a positive effect on the selling price that can be achieved.

As long as the offer is only available to one person, it is extremely exclusive and accordingly, higher sums are accepted in order to secure this offer.

Another advantage, this ensures an accelerated buying process.

After all, the prospective buyer then knows that he or she is the only person to whom the property has been offered so far.

Conversely: If a property is on five portals and it hasn’t sold yet, why push it? So far, it doesn’t seem to be going well either.

Now imagine using that knowledge as a savvy real estate agent (buyer and seller) when you sell your property, maybe even for the very first time. So good tips are worth a lot, as is experience. Especially when it comes to negotiations.

Negotiation risk: price corrections and renegotiation

Even in the preliminary negotiations, people like to play the supply / demand card. In the real situation, sellers quickly become uncertain. Some buyers negotiate until the last second.

It’s the same with real estate agents when they know that three other agents have the property. Suddenly you can make a lot on the price with skillful negotiations, I could call somewhere else.

In short, the more exclusive the sale of a property, the smaller the asking price, the faster and more profitable land, exclusive and large properties are sold.

Real estate portals clearly offer the wrong target group here. Private buyers have no interest in such costly and also elaborate projects. But for project developers, regardless of whether they are private individuals, property developers or large investment funds, such offers can be very interesting. At least if you have the right network.

How many people in Germany do you think would buy a plot of forest land in, let’s just say, Bavaria? How many people would buy a stake in a mine that extracts metals, for example? That’s exactly what you need very exclusive and financially strong investors for. Water source, ore mine, forest property, it becomes even more interesting with real estate and investment objects, which do not correspond to the typical condominium or the terraced house. Such things are e.g. water sources, mines for copper, iron ore or forest land, as well as agricultural land.

You can already see how diverse the things are that are taught. The A&O is always a sound value.

Valuation and expert opinion – Well-founded… !!!!

How much is your property worth? Believe me, a majority of real estate agents will figure in a great total! You’ll think to yourself:

How much is my property worth?

Why do most real estate agents do this? Of course, private sellers usually get one or two comparative offers. So if agent A says your house is worth €900,000, agent B says €920,000 and agent C says €950,000, it’s clear who you’re going to choose.

The danger: overvaluation by brokers

Caution. This is a false valuation that ultimately leads to the very mistakes mentioned above: 10 portals, 10 brokers. In the end, your condo, house or apartment building is on countless portals and worse, maybe even with countless brokers.

Why? Because the first broker has not achieved a sale, due to the overvaluation.

Another essential source of danger:

Credit check of interests: Proof of capital

Credit checks are extremely important for real estate sellers. After all, you don’t want to be negotiating with one, two or even three people who can’t even afford your property or their land! The higher the value of a property, the more thorough this check and valuation of the property needs to be.

Such properties (20, 30 or more units) are of course no longer bought by private individuals, but usually by companies, institutions or said investment funds. Accordingly, the complexity of checking creditworthiness also increases. It becomes even more complex with foreign investors.

If you work with off market, because here, as with us, a large part of the buyers are already known from the history. Accordingly, capital evidence can be provided quickly, communication is good and accordingly, information, documents and evidence are also available quickly.

Societas Europaea (SE) – Forms of incorporation, legal basis & Co

In the German-speaking world, the Societas Europaea – or SE for short – can also be found under the names European Company, European Stock Corporation or casually: Europa AG and describes in the legal sense a corporation and thus a legal entity with its own legal personality. As its German name suggests, the chapter of this corporate legal form is divided into shares. The legal introduction of the Societas Europaea as a transnational legal form came in 2004 within the framework of the so-called Law on the Introduction of the European Company – abbreviated: SEEG.

The background to the introduction of the Societas Europaea is, on the one hand, the possibility of merging companies from different EU member states or establishing a holding company. On the other hand, the aim of the SE was to establish joint subsidiaries between economically active companies and legal entities from different countries of origin in the EU by subscribing to shares.

Other typical corporations in Germany:

• Stock corporation (AG)
• Partnership limited by shares (KGaA)
• Entrepreneurial company / UG (limited liability)
• Limited liability company (GmbH)

Primary formation of an SE – merger, conversion, holding, subsidiary

A European Company is not founded “just like that” out of thin air. The formation process is – as already mentioned – bound to certain requirements… moreover, the Societas Europaea can only arise from certain situations. According to the numerus clausus of the forms of formation mentioned in the Societas Europaea Regulation – in short: SE Regulation – the formation of a Societas Europaea can primarily take place in four different ways: by merger, by transformation, by formation of a holding company or by formation of a subsidiary.

• Merger for inclusion/start-up
• Conversion foundation
• European holding company (Holding-SE)
• European subsidiary (subsidiary-SE)

Secondarily, it is possible to establish a European Subsidiary through a parent SE. However, the SE Regulation does not provide for the formation by natural persons or a spin-off from existing companies under national law.

Option 1 – Merger for incorporation or for new incorporation: 2+ public limited companies

You can form a European Company classically by merging – that is: merging – several existing companies. For the formation, at least two national public limited companies are required, which have a so-called cross-border European element. In a nutshell: the companies must either come from different member states of the European Union or, if their respective registered offices are in the same country, they must have had subsidiaries in other EU countries for at least two years. The latter is also referred to as a multi-country relationship.

The merger can be established either for the purpose of absorption or for the purpose of new formation. In the former case, the acquiring company takes the legal form of an SE, while the transferring company is absorbed into the SE at the time the merger takes effect. A new formation means that both merging companies cease to exist as soon as the merger becomes effective. The new legal entity can then also be established in a third EU country, since the multi-nationality requirement is already covered by the registered offices of the two founding companies. In this case, the merger is also referred to as a third-country merger.

How exactly does the merger of two public limited companies into one Societas Europaea work?

In the case of a merger, two legally independent companies come together and thus form a single entity in both an economic and a legal sense. For this purpose, at least one company must cede its legal independence, which is why the merger represents a typical form of corporate takeover. The purchase price for the takeover of the company can be paid elegantly in shares of the acquiring company.

The merger between companies is legally subject to the so-called Merger Directive 90/434/EEC as well as the European Merger Directive 2005/56/EC. Within Germany, the German Transformation Act (Umwandlungsgesetz, UmwG) also applies, while antitrust law is governed by the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkung, GWB), which, however, only uses the term “merger” for mergers.

Variant 2 – Conversion foundation: Joint stock company + foreign subsidiary

Ultimately, a stock corporation existing at the national level can also be converted into a transnational stock corporation – i.e. an AG into an SE – provided that the stock corporation has maintained a subsidiary or branch in another EU country for at least two years. A conversion to a Societas Europaea is comparable in nature to a change of legal form under the German Transformation Act (Umwandlungsgesetz, UmwG).

However, in contrast to the change of the legal form, the Societas Europaea Regulation – in short: SE Regulation – provides for the preparation of a conversion plan, whereby it is unclear which legal basis must be used with regard to the scope and, above all, also the content of this plan. A transfer of the previous registered office of the national stock corporation is in principle not permissible on the occasion of the conversion into a Europa AG.

Reverse conversion: Europa AG into conventional AG

The conversion of a conventional public limited company into a Societas Europaea is no problem if all the necessary requirements are met in advance. But what about the reverse case? Can you reverse the conversion and turn your Europa AG back into a normal public limited company on a national level? In fact, it is possible to convert an existing European Company into a classic AG. Provided that the Europa AG has existed in its European legal form for at least two years, a conversion plan can be drawn up to return the company to its original form. However, the approval of the general meeting is mandatory.

You can find out more about the national public limited company (AG) here:

• Stock corporation (AG)

Variant 3 – European holding company/SE: 2+ public limited companies/GmbHs

Alternatively, two or more companies from different EU member states may form a European Holding or Holding-SE together. This applies to any combination of stock corporations (AG) and limited liability companies (GmbH), whereby at least two of the companies must be from different EU countries. Alternatively, two or more participating corporations from the same member state each maintain a subsidiary or branch in another EU country for a minimum of two years and thus satisfy the multiple nationality requirement.

In concrete terms, the participation of companies in a holding SE means an exchange of shares: the companies buy shares in the European holding company and in return contribute their existing company shares, whereby their shares in the holding company must thereby convey more than 50 percent of all voting rights of the respective founding company.

You can find out more about national public limited companies (AG) and limited liability companies (GmbH) here:

• Stock corporation (AG)
• Limited liability company (GmbH)

How exactly does the formation of a European holding company work?

A holding company – short for: Holding company, holding organization or umbrella company – is created when several companies are hierarchically structured in a certain way and therefore does not describe a legal form in its own right, but rather a form of structuring companies that are related to each other. The individual companies hold shares in each other, which creates an economic dependency. Central tasks are usually performed by the parent company, which is at the top of the hierarchy of the holding structure.

Similar to the formation of a partnership under civil law (GbR), holding companies are formed for a specific operational purpose, in this case the holding of equity investments or company participations in other companies. As a holding company, you therefore organise the acquisition and management of shareholdings and thus form the capital provider or shareholder through which the subordinate companies finance their equity.

You can find out more about civil law partnerships (GbR) here:

• Civil law partnership (GbR)

Variant 4 – European Subsidiary/Subsidiary-SE: 2+ legal entities

Legal entities – companies, firms, etc. – may also jointly form a European Subsidiary or Subsidiary-SE. This is possible provided that at least two legal entities are governed by the law of different EU countries or at least two of the legal entities involved have maintained a subsidiary or branch in another EU country for a period of two or more years at the time the formation becomes effective.

This flexibility makes it possible for both civil law companies and commercial law companies – including for-profit cooperatives – to establish a joint subsidiary SE. Furthermore, legal entities under public and private law – irrespective of profit-making purposes – can establish an SE subsidiary if at least two of the founding companies originate from different EU countries or meet the multiple nationality requirement via subsidiaries or branches in other EU member states.

In addition to the option of also involving companies without limited liability in the formation process, probably the most decisive difference to the formation of a holding SE is that the individual companies do not form a joint SE umbrella company, but rather a joint subsidiary in the legal form of an SE.

How exactly does the formation of a European Subsidiary work?

In general, a subsidiary is a corporation that is directly dependent on its parent company. A parent company is in turn defined as a corporation that owns the majority of shares in other companies. The establishment of a parent company with subsidiaries offers the advantage that different business areas can be managed by different companies and individual areas of activity can be clearly and transparently distinguished from one another.

If the parent company establishes its own subsidiaries, this is referred to as affiliation: a term that originates from Middle Latin and can be translated as adoption – i.e. adoption as one’s own child – or takeover in the sense of appropriation. If external companies are acquired on the basis of synergy potential or potential increase in market power and subordinated to the parent company, this procedure is referred to as affiliation. In Germany, the formation procedure of a subsidiary SE is largely subject to German stock corporation law; in other countries, the respective national legal bases apply.

Secondary establishment of SE subsidiary: SE by SE

A Societas Europaea can indeed also come into being as a result of a one-man formation, namely SE by SE. This is of particular interest to providers of shelf companies where multi-nationality is not or only insufficiently present. Moreover, the shares of a shelf SE can also be acquired by natural persons. As with the subsidiary SE, the formation procedure of an SE subsidiary is also subject to the national law of the country in which the company has its registered office. Thus, for the formation of an SE subsidiary in Germany, the information in the German Stock Corporation Act must be followed.

The SE is formed by establishing an SE subsidiary through an existing European company, which then acts as the parent SE. As the establishing SE itself already has a cross-border European element, the multi-nationality requirement generally does not apply to the subsidiary, which in a sense “inherits” the multi-nationality. At the same time, there is no need for the involvement of other companies in the secondary formation.

Legal basis: directives, regulations & laws

Since the Societas Europaea is a legal form under European law, various EU and national legal bases must be taken into account. Primarily, there is Regulation (EC) No. 2157/2001, also known as the Societas Europaea Regulation (SE Regulation), which takes over the introduction of the new legal form and creates a common legal framework between the EU member states and the countries of the European Economic Area (EEA). With regard to employee involvement, Directive 2001/86/EC was introduced as a complementary measure to ensure that the regulations and practices in place prior to the establishment of the SE do not simply disappear.

• CouncilRegulation (EC) No 2157/2001 of 8 October2001 on the Statute for a European company (SE)
• CouncilDirective 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees

Based on the Treaty establishing the European Community, Regulation (EC) No. 1435/2003 was introduced, which enables and organises the establishment of European Cooperatives – in short: SCEs. In the course of this, Directive 2003/72/EC was introduced, which regulates employee participation in European cooperatives.

• CouncilRegulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE)
• CouncilDirective 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees

As a result of the COVID 19 outbreak, a new regulation was introduced in 2020, under which the general meeting of a European Company or general meeting of a European Cooperative Society required for 2020 can be postponed until the end of the year, taking into account exit restrictions and social distancing measures.

• CouncilRegulation (EU) 2020/699 of 25 May 2020 on temporary measures in respect of general meetings of European companies (SEs) and general meetings of European cooperative societies (SCEs) (Text with EEA relevance).

In addition to the ordinances and directives already mentioned, there are also some at national level in Germany:

• Law on the Introduction of the European Company (SEEG) of 22 December 2004
• Law on the Implementation of CouncilRegulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE) (SE Implementation Act – SEAG) of 22 December 2004
• Law on the Involvement of Employees in a European Company (SE Employee Involvement Act – SEBG) of December 22, 2004
• German Stock Corporation Act (AktG) of 6 September 1965
• Commercial Code (HGB) of 10 May 1897

Measures for SMEs – Societas Privata Europaea & Societas Unius Persona

Capital companies for small and medium-sized enterprises – in short: SMEs – were also provided with a largely uniform European legal form, namely the Societas Privata Europaea – in short: SPE; with German name: European Private Company. A first draft for the introduction of such a company was initiated in 2009, but ultimately failed just a few years due to ongoing criticism from other EU member states regarding its design.

As an alternative measure, the project to create a so-called Societas Unius Persona – in short: SUP; with German name: Europäische Einpersonengesellschaft – was launched. This European variant of a conventional limited liability company (GmbH) pursues the goal of enabling single-member companies with legal capacity to act for cross-border business activities, which can be organised and managed by a single managing partner. As with the national Unternehmergesellschaft (haftungsbeschränkt), a single symbolic euro is to be set as the minimum capital. The concept of the SUP has also met with widespread criticism so far, which is why it is currently not foreseeable whether and when the Societas Unius Persona will be available as a company form.

Legal form variant SE & Co KGaA – KGaA with general partner SE

Sometimes the Societas Europaea also appears in combination with a partnership limited by shares (KGaA). Family businesses, for example, occasionally organise themselves as Societas Europaea & Compagnie Kommanditgesellschaft auf Aktien – in short: SE & Co KGaA. In this case, they form a stock corporation in the legal sense – however, the general partner as personally liable shareholder is not just any natural person, but specifically a Societas Europaea (SE). If the general partner is embodied by an AG, one speaks instead of an AG & Co KGaA, in the case of a general partner GmbH of a GmbH & Co KGaA.

• AG & Co KGaA – see stock corporation (AG)
• GmbH & Co KGaA – see limited liability company (GmbH)

Companies operating under the legal form variant of the SE & Co KGaA have only existed since the end of the 1990s, after open legal questions were clearly explained by a court ruling of the Federal Supreme Court (BGF). The well-known health care group Fresenius SE & Co KGaA, which is one of the largest private hospital operators in Germany, has decided to establish an SE & Co KGaA, as have many other companies from a wide range of industries: Sound carriers and multimedia products, outdoor advertising, plant breeding and biotechnology, pump technology as well as thermal insulation composite systems, to name but a few.

Examples of SE & Co KGaA companies:

• AURELIUS Equity Opportunities SE & Co. KGaA
• Edel SE & Co. KGaA
• Fresenius SE & Co. KGaA
• KWS SAAT SE & Co. KGaA
• KSB SE & Co. KGaA
• Mutares SE & Co. KGaA
• Sto SE & Co. KGaA
• Ströer SE & Co. KGaA

CEWE Stiftung & Co. KGaA is a special case: In this company, the general partner is embodied by a foundation. In principle, the partnership limited by shares is possible in all conceivable combinations, as GUB Investment Trust KGaA points out as an example.

Continue reading here on the topic of setting up a family foundation:

• Establish a family foundation

SE formation in detail – registered office, company name, management & Co.

You would like to set up a European Company and become active in the Single Market in an uncomplicated way? To do this, your company must first meet a few requirements: Here you can find out everything you need to know about multi-nationality, minimum capital, co-determination and more, so that you can set up your European Company in a correct and informed manner. First things first: Your company must be a legal entity and have its own legal personality. In addition to the status as a legal entity, the so-called multi-nationality principle must also be complied with and a cross-border European element must be demonstrated.

Further regulations concern the company’s registered office and head office, the minimum capital required, the proper company name and registration, the management and company bodies and, last but not least, the accounting requirements and the right of co-determination of the workforce.

• Principle of multiple nationality
• Registered office & head office
• Minimum capital
• Company name & registration
• Management & corporate bodies
• Accounting
• Co-determination rights of the workforce

Multi-nationality principle as a cross-border element

The multi-nationality principle requires that at least two of all participating founding companies of a Societas Europaea have a cross-border, European element. In plain language, this means that at least two companies must be governed by the laws of different EU member states or, alternatively, must be able to prove a cross-border element through a subsidiary or branch that has been maintained in another EU country for two or more years.

Registered office & head office of a European company

The registered office and the head office of your company must be located in the same EU member state for the formation of a European Company. The choice of the country of incorporation is of decisive importance, since in addition to EU law, the respective applicable national law forms the legal basis of the European Company. In principle, it is possible to subsequently relocate the company’s registered office and head office to another EU member state, should the situation require it or should the company gain advantages as a result. The Association of German Chambers of Industry and Commerce (DIHK) describes this advantage as follows:

“Figuratively speaking: Europa AG is a legal form that comes in 25 colors. The choice of the domicile of the Europa AG therefore opens up interesting design possibilities.”

Some countries have stricter requirements for the formation of a European Company: for example, the member states Bulgaria, Denmark, France, Greece, Latvia, Austria and the Czech Republic require that the registered office and the head office of the company have the same address.

Financing of an SE: 120,000 euros minimum capital

Another requirement concerns the minimum capital required: For a European Company with its registered office and head office in Germany, for example, you need at least 120,000 euros, i.e. more than twice as much as the share capital of 50,000 euros required for a conventional German public limited company. The capital requirement – as well as the other requirements – may vary in the different EU member states. A higher subscribed capital can in principle be agreed in the articles of association.

As a rule, the minimum capital of a Europa AG should be denominated in euros. If the official national currency for a country of domicile is not the euro, the company may request that its annual financial statements and consolidated financial statements be prepared and published in its own national currency.

• Minimum capital: 120,000 euros (Germany)

Europa AG as a trademark: Company name & registration

The company name includes the legal form suffix “SE”, which either precedes the company name as a prefix or follows it as a suffix. Registration is mandatory in the register of the country of incorporation – in Germany, therefore, in the commercial register – and is also published in the Official Journal of the European Communities. If the registered office is moved to another EU member state at a later date, the registration of the Europa AG can be adjusted easily and without complications.

The existing Societas Europaea does not have to be dissolved for this reason and does not need to be re-established at its new location. Only an entry is made in the register there and a notification is sent to the original EU country, whereupon the latter makes a deletion of the entry in its own register. All entries and deletions in the registers of the various EU member states are listed in parallel in the Official Journal of the European Communities.

Structure of an SE: Management & Corporate Bodies

With regard to management, a distinction is made between a dualistic and a monistic system – the new German two-tier/one-tier model. They differ primarily in the different type and number of SE bodies that are appointed in the company. However, the term of office for the members of the appointed bodies is a maximum of six years in both cases, although reappointment is not ruled out.

• Dualistic system
• Monistic system

Dualistic system (two-tier model)

The structure of the German supervisory board constitution serves as the basis for the dualistic system, which is sometimes also referred to as the two-tier model. It represents the traditional division of management into three bodies, according to which, in addition to the general meeting, the supervisory board is appointed as a control body and the management board as a management body.

If the Europa AG has a share capital of more than three million euros, at least two persons must be appointed to the management board. Smaller European stock corporations may limit the executive board to only one person in accordance with the articles of association, provided that the company is not a co-determined company. Supervision of the management body is the responsibility of the supervisory board, the size of which is directly conditioned by the amount of share capital. In the case of a co-determined Societas Europaea, the supervisory board members must also be representatives of the shareholders and representatives of the employee workforce.

Monistic system (one-tier model)

The so-called one-tier model, on the other hand, is based on the Anglo-American board system. It stands for a monistic system, according to which only a single-member board of directors is appointed in addition to the general meeting, which is composed of the shareholders of the stock corporation.

In principle, three members of the Board of Directors are provided for, one of whom must be an executive director. However, it is possible to appoint a different number of persons to the board of directors, with the maximum number of members permitted being related to the company’s share capital, and European public limited companies with a share capital of more than three million euros being allowed by law to appoint no fewer than three members.

Within Germany, monistic Societas Europaea also demand that the participation of employee representatives on the board be as high as would be required for the traditionally dualistic supervisory board.

Accounting rules

With regard to accounting, the European Company is subject to the laws of the country in which the registered office and head office of the company are located – in a form that is largely standardised under European law. Apart from taxation and accounting, it is obliged to adopt the annual financial statements together with the notes and the balance sheet, profit and loss account (P&L) as well as to prepare the report on the course of business and the situation of the company.

• Annual accounts
  • Balance
  • Profit and loss account
  • Notes to the financial statements
  • Report on the course of business and the situation of the company

Co-determination rights for SE employees

Since the European Union has not formulated any legal formulation of co-determination in a European Company, there is either a binding agreement between the employer and employee sides or the valid co-determination right for the company is determined depending on the form of formation of the Europa AG. You can find out more about the individual forms of formation below.

Special negotiating body: employers & employees

In principle, it is possible for employers and employees to set up a so-called “special negotiating body”, where they can jointly reach a suitable agreement on corporate co-determination and set this down in writing. The members of the body are elected secretly and directly on the basis of a certain country key and are limited to a maximum of 40 members.

The “special negotiating body” must be established within ten weeks of the announcement by the company’s management of the planned formation of a European Company. A decision must be taken within six months – or within twelve months in the case of a request for an extension of the deadline.

Negotiations on employee participation

The “special negotiating body” can decide on employee participation in Europa AG, whereby a qualified majority decision must be reached for this. Agreements leading to a reduction in co-determination require a two-thirds majority representing at least two-thirds of the employees in two or more EU countries. However, this only applies under special conditions:

The special majority in favor of a reduction of the right of co-determination only applies if, in the case of a merger, at least 25 percent of the total workforce or, in the case of the formation of a holding SE or subsidiary SE, at least half of the total workforce is subject to co-determination. In the case of the formation of an SE by way of conversion, in principle, no reduction of the right of co-determination can be resolved.

• Merger: at least 25 % AN representation
• Holding/subsidiary: at least 50 % employee representation
• Conversion: no reduction possible

Termination of ongoing negotiations & waiver decision

In the case of a two-thirds majority, however, it can also be decided to break off ongoing negotiations or not to enter into negotiations at all. In this case, the Europa AG is registered without a co-determination model. In the case of the transformation of corporate form, however, which is based on a stock corporation with co-determination, such waiver resolution is generally excluded.

Failure of negotiations & standard rules

If agreement cannot be reached between the employer and employee sides, the negotiations fail and the standard rules automatically apply. The aim is to safeguard the existing co-determination rights of the workforce from the time the Europa AG is entered in the national register. Depending on the form of incorporation, corporate co-determination is absorbed differently:

In the case of formation by transformation, the existing co-determination rights of the national AG are continued. In the case of the other forms of formation, the highest standard of participation of a founding company can be transferred to the European Company – but only if in the relevant company, prior to the registration of the Societas Europaea in the national register, regulations on participation were already effective which cover a certain percentage of all employees. In the case of a merger formation, a coverage of 25 percent is required, in the case of SE holding companies and SE subsidiaries even twice as much.

• Conversion: Transfer of the previous right of co-determination
• Merger: 25 % of total workforce covered
• Holding/subsidiary: 50 % of total workforce covered

Advantages of Europa AG – Uniform, international & flexible

The European Company is a relatively new legal form of enterprise and can only be established in accordance with European regulations since 8 October 2004. It is therefore not very widespread and, in the view of many entrepreneurs, has yet to prove itself. However, especially with regard to the transnational business transactions of large companies, the Societas Europaea already offers a number of advantages that have a significant impact on cross-border cooperation between different EU member states and countries of the European Economic Area (EEA).

• Uniform set of rules
• International reputation
• Strengthening co-determination rights for employees
• Cross-border merger
• Flexible relocation
• Streamlined administrative structure
• Cost reduction through branch offices
• Establishment of SE subsidiaries

Uniform set of rules in EU & EEA

A uniform set of rules in favour of cross-border cooperation between several European countries is characteristic of the European Company. By establishing a Societas Europaea, you can do business under a trading name that is effective in all EU Member States and EEA countries, and you do not need to set up a large number of subsidiaries to your company in order to develop an effective international business network.

International reputation & strengthening of employee co-determination

Another plus point is that the name Societas Europaea expresses the internationality of your company and generates public prestige. Last but not least, the establishment of a European Company also has a positive effect on the company’s employees: The EU-wide uniform regulations create a personnel policy framework that strengthens the co-determination of your employees if they work for your company in several countries.

Europe-wide merger formation for AGs

The merger form of incorporation allows entrepreneurs for the first time to merge their public limited company with a public limited company from another EU Member State. The granting of cross-border mergers for all corporations is currently under discussion and could offer an attractive alternative for national public limited companies, limited liability companies and other corporations that conduct business across borders but do not want to give up their legal form in favour of a European Company.

Flexible relocation of the registered office

The flexible and uncomplicated relocation of the registered office is another decisive advantage of the Societas Europaea: although the SE registered office and the head office must initially be located in the same EU member state… the registered office of your company can later be easily relocated to another EU country. In this way, you can react flexibly to changes in the market and make clever use of the European competition between legal systems.

Streamlined administrative structure

In the case of the Europa AG, it is possible to choose between two tried and tested management models: the dualistic system, as is customary in this country, and the monistic system based on the Anglo-American model. In this way, European public limited companies with their registered office in Germany can nevertheless take advantage of a streamlined administrative structure, which makes a uniform form of management possible, especially for multinational corporations.

Branch & SE Subsidiaries

Instead of subsidiaries, a Societas Europaea can also maintain branches throughout Europe, which can mean a significant reduction in costs with regard to the administrative and management apparatus. Should the establishment of subsidiaries prove to be useful at a later date, you as the owner can also establish them in the legal form of a Societas Europaea.

Taxes for Europa AG shareholders: corporate income tax, trade tax, VAT, capital tax & income tax

In all countries of the European Economic Area (EEA), Europa AG is subject to the regulations applicable there with regard to the taxes and fees incurred. Accordingly, no special regulations are provided for current taxation. For permanent establishments and branches in other EU member states, it is subject to limited tax liability and must comply with the regulations applicable there. This concerns, among other things, the determination of profits for tax purposes.

In Germany, stock corporations are usually subject to corporate income tax and trade tax. In addition, sales tax is payable on the performance of non-exempt transactions. Profit distributions to the shareholders of an AG are generally subject to capital gains tax, whereas natural persons in the company must pay income tax. Wage payments to the workforce – for example, the remuneration of members of the management board – are subject to wage tax.

• Corporate income tax (KSt)
• Trade tax (GewSt)
• Value added tax (VAT)
• Capital gains tax (KapESt)
• Income tax (ESt)
• Wage tax (LSt)

You can find out what taxes you can expect with a real estate corporation here:

• Save taxes on real estate

Double Taxation Agreements (DTAs) – Germany, EU & EEA

Between Germany and the other member states of the European Union (EU) and the European Economic Area (EEA), the so-called double taxation agreement – in short: DTA – applies. This agreement ensures that double taxation of income earned abroad can be avoided by granting one participating state the right to tax and, in parallel, denying or at least limiting the right of the other state to tax. The concept of this is sometimes also referred to as the barrier effect or barrier function.

Model agreement OECD-MA & OECD transfer pricing guidelines

An example of this is the model convention of the internationally active Organisation for Economic Co-operation and Development (OECD), whose Model Tax Convention on Income and on Capital (OECD-MA) is recognised worldwide and serves as the basis for over 3,000 intergovernmental double taxation agreements.

The OECD also adresses the well-known problem of transfer pricing when maintaining foreign permanent establishments. The prestigious organisation publishes regular transfer pricing guidelines for multinational companies and tax administrations in order to ensure a proper deferral of profits to the parent SE. They can serve as a guideline for cross-border companies to set the agreed prices at an arm’s length level in accordance with the arm’s length principle.

Parent-subsidiary directive: taxation of dividend payments

By revising the outdated Directive 90/435/EEC – the so-called Parent-Subsidiary Directive – and introducing Directive 2003/123/EC, it was possible to eliminate the previously existing double tax burden on dividend payments. According to the new regulations, the full tax revenue of the subsidiary is due to the member state in which the subsidiary is domiciled. However, capital gains tax (KapSt) may not be levied there in context.

The parent company may use either the exemption method or the imputation method to avoid double taxation.

• CouncilDirective of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (90/435/EEC)
• CouncilDirective 2003/123/EC of 22 December 2003 amending Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States

Merger Directive: taxation of cross-border changes of ownership

Under certain circumstances, a European Company with cross-border incorporation can be managed without affecting profit or loss and be exempted from the taxation of hidden reserves. It then falls within the scope of Directive 90/434/EEC – the so-called Merger Directive – which was later modified by Directive 2005/19/EC. Over the years, the Merger Directive has repeatedly undergone minor amendments, so that the substantive aspects are nowadays also applicable to a cross-border transfer of the registered office, the conversion of permanent establishments into subsidiaries and spin-offs from the parent company.

In Germany, the EC Directive was initially implemented in the Reorganisation Tax Act (UmwStG) and later also in the Act on Tax Measures Accompanying the Introduction of the European Company and on the Amendment of Other Tax Regulations (SEStEG).

• CouncilDirective of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (90/434/EEC)
• CouncilDirective 2005/19/EC of 17 February 2005 amending Directive 90/434/EEC on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States

Societas Europaea (SE) – For whom is it worthwhile?

The Societas Europaea is particularly suitable for large public limited companies with cross-border business within the European Union and the European Economic Area. For those who are not deterred by the considerable minimum capital of 120,000 euros, there are many opportunities to become active transnationally and to realize their entrepreneurial goals with reduced effort and cost savings. Cross-border mobility enables you to set up your company in accordance with the legal system that suits you best and, if necessary, to flexibly relocate your registered office and head office to another EU country.

For whom exactly is the European Company worthwhile? Large international companies and fast-growing companies with an IPO can particularly benefit from the advantages of a European Company and strengthen their external image, because the Europa AG enjoys a high reputation and respect throughout Europe. Even if you are dissatisfied with the typical German management model and the rigid structure of your public limited company, the conversion formation of a Societas Europaea can be particularly attractive for you, because here you can switch to a monistic system and streamline the corporate bodies.

Alternatives to the Societas Europaea (SE): Legal forms in Germany

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

Cryptocurrency explained: Blockchain, Investments & Co.

Cryptocurrency is nothing more than digital money. Here, all the important data around the holder and transaction is encrypted and stored. Instead of storing all this on just one server, the transactions are found in a decentralized network – also called: The Blockchain. This technology makes transactions faster, more secure, and less expensive than they would be otherwise. Sounds like the future? Read our analysis here: cryptocurrency development.

No investment advice or purchase recommendation!

All information provided here does not constitute investment advice or a recommendation to buy. All statements are my general published opinion. I have obtained the information from my experience as a private investor. This experience report cannot and is not intended to replace personal investment advice from professionals.

Owning and trading cryptocurrencies brings many advantages. Transactions take place directly between the buyer and seller. It is a decentralized network. So, unlike a bank transfer, exchange and bank fees are eliminated, as are transfer limits and unnecessary waiting times. Bitcoin trading is therefore not only uncomplicated, but also anonymous and secure. Instead of the own name, all crypto assets are managed with an identification code. The blockchain technology also ensures that transactions are constantly checked in advance, making any manipulation and forgery almost impossible. Learn more about the technology, course and trade explained here: BitCoin, cryptocurrency & blockchain.

Reading tip: Which app do I use to buy and sell shares, cryptocurrency & Co. Here is the answer! My recommendation: Trading App.

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Trading with Bitcoin, Ethereum, Litecoin & Co.

The cryptocurrency Bitcoin is now a household name. It is the most popular, but by far not the only one. In the meantime, several new creations have emerged. Some of the others are Bitcoin enhancements. Thus, there are now over 4,500 cryptocurrencies. While that sounds like a large amount, only just under 100 of them achieve a daily trading turnover of $1,000 or more. Other popular cryptocurrencies are Ethereum, Ripple and Litecoin.

Cryptocurrencies – List

Here you can find a selection of interesting digital currencies:

Binance Coin (BNB)

• Binance Coin (BNB)

Bitcoin Cash (BCH)

• Bitcoin Cash (BCH)

Bitcoin (BTC)

• Bitcoin (BTC)

Cardano (ADA)

• Cardano (ADA)

Dash

• Dash

EOS

• EOS

Ethereum

• Ethereum

Ethereum Classic (ETC)

• Ethereum Classic (ETC)

IOTA (MIOTA)

• IOTA (MIOTA)

Litecoin (LTC)

• Litecoin (LTC)

NEO

• NEO

Ripple (XRP)

• Ripple (XRP)

Stellar (XLM)

• Stellar (XLM)

Tezos (XTZ)

• Tezos (XTZ)

TRON (TRX)

• TRON (TRX)

ZCASH (ZEC)

• ZCASH (ZEC)

Questions and answers: cryptocurrency

So now you know what the blockchain technology is, what cryptocurrencies there are and what advantages trading Bitcoin and Co. brings with it. Finally, you will get all the important questions about trading with cryptocurrencies answered:

Which is the best cryptocurrency?

The best cryptocurrencies include the classic Bitcoin, as well as IOTA, Ripple, EOS, Litecoin, Binance Coin and Tether.

Which cryptocurrency has a future?

According to forecasts, Bitcoin, Ethereum, Ripple and NEO have the most potential to increase in value in the future.

Are gains from cryptocurrencies tax-free?

The speculation period for cryptocurrencies is one year. If a profit of 600 euros or more is made during this period, the total profit must be taxed. So if the coins are left in the wallet for at least 12 months and only paid out after the speculation period, no taxes are due.

Should you invest in cryptocurrency?

Only invest in cryptocurrency if you are familiar with blockchain technology, different currencies and wallets. After all, this is a decentralized network based solely on demand. So always be aware of the risks and only invest if you are really sure and familiar with cryptocurrency trading.

Cryptocurrency: reading tips

1. Trading App: Recommendation
2. Trading strategies

Trading App: Recommendation

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• Trading App

Trading strategies

Whether it’s crytocurrency, currency trading, stocks, commodities or precious metals, these 3 strategies will help you understand the basic stock market game. I developed these 3 strategies to help beginners and novices understand the mechanics in a nutshell. Since I grew up with Bitcoin rather than stocks, here in particular a strong reference to digital currencies. But the mechanisms or strategies are the same for these 5 investment types: crytocurrency, currency trading, stocks, commodities or precious metals. I would exclude ETFs and index funds, as the risks and price fluctuations are significantly lower here.

• Trading strategies

Did you already know? Open transactions in the blockchain

Cryptocurrency itself is, simply put, a coded chain of data. The so-called blockchain.

How does cryptocurrency work?

Everything is set up as a P2P network (peer-to-peer). Data is therefore stored in a decentralized manner. All data blocks are linked to that of the predecessor. Within this distributed database, all transactions are actually known!

The whole thing is therefore a network in which cryptographically signed messages are published – technical term: blockchain. You want to have a look at these transactions? Here you can see live how individual trades sometimes sell up to 100 Bitcoins and how sums in the millions go over the table:

• Bitcoin transactions – live on blockchain.com
• Ethereum transactions – live on blockchain.com