International Practice

# India-Germany Cross-Border
Legal Advisory

Germany

## Comprehensive Legal Counsel for the German Market

Germany is India's largest trading partner in the European Union and the fourth-largest economy in the world. Bilateral trade between India and Germany exceeds EUR 24 billion annually, spanning manufacturing, automotive engineering, pharmaceuticals, chemicals, renewable energy, and information technology. Over 1,700 German companies operate in India, while a growing number of Indian enterprises have established a presence in Germany through subsidiaries, joint ventures, and acquisitions. The India-Germany Strategic Partnership, reinforced by regular intergovernmental consultations, provides a stable framework for deepening economic ties.

ESB Global Law Advisory, based in Mumbai, provides specialised cross-border legal services for Indian businesses entering or expanding in the German market. Our practice combines Indian legal expertise with a thorough understanding of German commercial, corporate, and regulatory law to deliver practical, jurisdiction-aware counsel.

### Business Formation & Corporate Law

Establishing a legal entity in Germany is the first step for most Indian businesses seeking a permanent market presence. The most common corporate form is the GmbH (Gesellschaft mit beschrankter Haftung), a limited liability company requiring minimum share capital of EUR 25,000. For larger enterprises, the AG (Aktiengesellschaft) or stock corporation offers a structure suitable for public capital raising and listing on German exchanges. We advise on the entire formation process, including drafting articles of association, notarial requirements, Handelsregister (commercial register) filings, and post-incorporation compliance. Our guidance also covers the German Commercial Code (HGB), corporate governance obligations, management board duties under the GmbH Act, and structuring of branch offices or representative offices where a full subsidiary is not required. For Indian companies pursuing strategic partnerships, we structure joint ventures and consortium arrangements that balance control, liability, and profit-sharing between Indian and German partners.

### Employment & Labour Law

Germany has one of the most comprehensive and employee-protective labour law systems in Europe. Indian employers must navigate the Works Constitution Act (Betriebsverfassungsgesetz), which mandates the establishment of works councils in companies with five or more permanent employees. The Termination Protection Act (Kundigungsschutzgesetz) imposes stringent requirements on dismissals, including mandatory social selection criteria and notice periods that increase with tenure. For companies with more than 500 employees, codetermination rules under the Codetermination Act (Mitbestimmungsgesetz) require employee representation on supervisory boards. We advise Indian businesses on drafting compliant employment contracts, managing collective bargaining obligations, structuring executive compensation, handling workforce restructuring, and navigating the social security system including statutory health insurance, pension contributions, and unemployment insurance.

### International Trade & EU Compliance

As an EU member state, Germany operates within the European Union's regulatory framework. Indian businesses exporting goods to Germany must comply with EU customs regulations, product safety directives, CE marking requirements, and sector-specific standards. The REACH Regulation (Registration, Evaluation, Authorisation and Restriction of Chemicals) applies to Indian chemical and pharmaceutical exporters. Competition law compliance is governed by the GWB (Gesetz gegen Wettbewerbsbeschrankungen, or the Act against Restraints of Competition), which aligns with EU competition rules but also contains unique German provisions, particularly regarding abuse of market dominance. We guide clients through import licensing, trade compliance programmes, anti-dumping proceedings, sanctions screening, and the regulatory approvals required for operating in regulated sectors such as healthcare, financial services, and telecommunications.

### Intellectual Property Protection

Germany is recognised globally for its strong intellectual property protection regime and efficient IP court system. Patents, trademarks, utility models, and designs can be registered through the German Patent and Trademark Office (DPMA) or, for EU-wide protection, through the European Patent Office (EPO) and the EU Intellectual Property Office (EUIPO). The German Trade Secrets Act (Geschaftsgeheimnisgesetz), enacted in 2019, provides a modern framework for protecting confidential business information, requiring businesses to demonstrate that reasonable protective measures are in place. German courts, particularly the specialised patent chambers in Dusseldorf, Munich, and Mannheim, are known for their expertise and relatively swift adjudication of IP disputes. We assist Indian businesses with patent and trademark filing strategies, technology licensing agreements, trade secret protection programmes, and IP litigation in German courts.

### Tax & Transfer Pricing

The Indian and German governments maintain a Double Taxation Avoidance Agreement (DTAA) that allocates taxing rights and provides relief on dividends, interest, royalties, and capital gains. German corporate taxation comprises federal corporate income tax at approximately 15%, a solidarity surcharge, and municipal trade tax (Gewerbesteuer), resulting in an effective combined rate of roughly 30%. Indian businesses must carefully manage permanent establishment (PE) risks, particularly where employees, agents, or dependent representatives operate in Germany. Transfer pricing documentation is mandatory for intercompany transactions and must satisfy both German and OECD standards, with the German tax authorities known for rigorous audit practices. We advise on tax-efficient structuring, PE exposure analysis, transfer pricing policy design, withholding tax optimisation, and compliance with both Indian and German reporting obligations.

### Real Estate Investment

Germany's real estate market offers attractive opportunities for Indian investors, with stable valuations in commercial, residential, and logistics segments across cities such as Berlin, Munich, Frankfurt, and Hamburg. We advise on asset and share deal structures, due diligence for property acquisitions, commercial lease agreements, real estate transfer tax (Grunderwerbsteuer) implications, and regulatory considerations including foreign investment screening under the German Foreign Trade and Payments Ordinance (AWV).

### Our Germany Services Include

- GmbH and AG company formation and corporate structuring
- Joint venture, partnership, and consortium agreements
- German employment law compliance and workforce restructuring
- EU regulatory, product safety, and REACH compliance
- Patent, trademark, and trade secret protection (DPMA/EPO)
- M&A due diligence, transaction support, and post-merger integration
- Tax advisory, DTAA planning, and transfer pricing documentation
- Commercial and real estate contract drafting under German law
- International arbitration (DIS, ICC) and German court litigation
- Competition law compliance and GWB advisory

FAQ

## Frequently Asked Questions

### How do I set up a GmbH in Germany from India?

Setting up a GmbH requires a minimum share capital of EUR 25,000, of which at least half must be paid up at incorporation. The process involves drafting articles of association before a German notary, opening a German bank account for capital deposit, registration with the local commercial register (Handelsregister), and obtaining a tax number from the Finanzamt. Indian promoters can incorporate remotely through a power of attorney, though notarisation requirements must be observed. ESB Global guides Indian businesses through each step, coordinating with German notaries and regulatory authorities.

### What employment laws apply when hiring staff in Germany?

German employment law is among the most employee-protective in Europe. Key statutes include the Termination Protection Act (Kundigungsschutzgesetz), the Works Constitution Act (Betriebsverfassungsgesetz) governing works councils, and the General Equal Treatment Act (AGG). Employers must comply with statutory minimum notice periods, paid leave entitlements of at least 20 days per year, social security contributions, and codetermination rights for companies with more than 500 employees. Indian companies establishing operations in Germany should seek specialist counsel before drafting employment contracts.

### How can I protect my intellectual property in Germany?

Germany offers robust IP protection through the German Patent and Trademark Office (DPMA) as well as EU-wide instruments such as the European Patent Office (EPO) and the EU Trademark system (EUIPO). Patents, trademarks, designs, and utility models can all be registered. The German Trade Secrets Act (Geschaftsgeheimnisgesetz) provides additional protection for confidential business information. Germany is also known for its efficient IP court system, with specialised chambers in courts in Dusseldorf and Munich that handle patent and trademark disputes. We advise Indian businesses on comprehensive IP protection strategies covering registration, licensing, and enforcement.

### What are the tax implications for Indian businesses operating in Germany?

Indian businesses in Germany face corporate income tax (approximately 15%), a solidarity surcharge (5.5% on the corporate tax), and trade tax (Gewerbesteuer) that varies by municipality, bringing the effective combined rate to roughly 30%. The India-Germany Double Taxation Avoidance Agreement (DTAA) provides relief from double taxation on dividends, interest, royalties, and capital gains. Permanent establishment (PE) risks must be carefully managed, particularly for service providers and liaison offices. Transfer pricing documentation under German rules is mandatory for cross-border intercompany transactions and must comply with both OECD guidelines and Indian transfer pricing regulations.

### How are commercial disputes between Indian and German parties resolved?

Commercial disputes can be resolved through German court litigation or international arbitration. Germany is a signatory to the New York Convention, making arbitral awards enforceable in India and vice versa. Popular arbitration institutions include the German Institution of Arbitration (DIS), the ICC International Court of Arbitration, and the Vienna International Arbitral Centre (VIAC). Many India-Germany contracts designate arbitration seats in Frankfurt or Munich. German courts are also well-regarded for commercial dispute resolution, with specialised commercial chambers (Kammern fur Handelssachen) in regional courts. Our team advises on dispute resolution clauses and represents clients in both arbitration and litigation proceedings.

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## Other International Jurisdictions

We also provide cross-border legal services in these European countries.

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### United Kingdom

Corporate law, immigration, commercial disputes, and post-Brexit trade compliance.

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### France

Commercial contracts, intellectual property, joint ventures, and French corporate law.

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### Netherlands

Holding structures, bilateral treaties, tax optimisation, and Dutch corporate governance.

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### Switzerland

Banking regulations, arbitration, trade compliance, and Swiss corporate structuring.

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### Italy

Trade agreements, joint ventures, real estate investment, and Italian commercial law.

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### Spain

Investment regulations, property law, commercial disputes, and Spanish business formation.

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### Ireland

Tech sector compliance, corporate structuring, IP protection, and Irish regulatory law.

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## Expert India-Germany
Legal Counsel

Enter the German market with confidence. Strategic legal counsel from Mumbai for cross-border success.

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