This journey assumes
- The UAE parent is a company licensed on the UAE mainland or in a non-financial free zone and owns 100% of the GmbH.
- The GmbH will carry on unregulated commercial activity (sales, services, distribution); it is not a bank, insurer or other licensed financial business.
- The GmbH is newly formed, not an acquisition of an existing German business.
- Some staff may transfer from the UAE, but most will be hired in Germany.
- Rules are stated as at 19 October 2026; the treaty position must be reconfirmed, as negotiations were reported to have restarted.
If any assumption is wrong for your business, the conclusions change. Ask WONE Global to re-run the analysis with your facts.
Both sides of the border, issue by issue
Each row is one part of the work. The left and right columns show what each country's rules require, so you can see where one side's decision constrains the other.
Investing from the UAE into a German company
Germany does not require approval to set up a new company, although later acquisitions of German businesses by non-EU investors can be screened. On the UAE side the parent stays subject to UAE corporate tax, and whether German dividends are exempt depends on the participation exemption conditions.
- The UAE parent pays corporate tax at 9% on taxable income above AED 375,000. Whether dividends and gains from the GmbH are exempt under the UAE participation exemption could not be confirmed and should be checked before choosing between dividends, fees and interest.1
- The dirham is pegged to the US dollar, so the parent carries euro exchange risk on capital, loans and dividends.2
- Forming a new GmbH is not an acquisition, but the federal economics ministry can review acquisitions of German companies or business units by non-EU acquirers, so later purchases of German businesses may need screening.3
- Once formed, the GmbH is a German resident and must report incoming and outgoing cross-border payments, such as capital and loans from the UAE parent, to the Deutsche Bundesbank unless an exemption applies.4
GmbH, UG or branch, and the formation formalities
A GmbH needs EUR 25,000 of share capital, notarised articles and entry in the commercial register before it exists. Because the UAE is not party to the Apostille Convention, UAE corporate documents and signatures need full legalisation, which is usually the slowest step.
- The UAE does not appear in the Apostille Convention status table, so the parent's documents and signatures certified in the UAE need legalisation rather than an apostille, plus certified German translations.56
- The UAE parent will already have identified its beneficial owners at 25% or more under UAE rules; Germany uses a more than 25% test, so the same people usually have to be reported to the German Transparency Register for the GmbH.78
- A GmbH needs share capital of at least EUR 25,000; a UG (haftungsbeschränkt) can be formed with less but must pay its capital in full and use that designation.910
- The articles must be notarised and signed by all shareholders, and the GmbH exists only once entered in the commercial register, with the application filed electronically through the notary.1112
- A branch of the UAE company is registered at the register court where the branch is located; it has no separate legal personality, so the UAE company is directly liable.136
- The GmbH must report its beneficial owners to the Transparency Register without delay.14
German tax, dividend withholding and the missing treaty
The GmbH pays corporate income tax, solidarity surcharge and municipal trade tax, about 30% combined at the 2025 average municipal multiplier. Since the Germany–UAE treaty expired at the end of 2021, dividends to the UAE parent bear German withholding tax at domestic rates, reduced only by a partial refund for foreign corporations that pass the German anti-abuse test.
- The Germany–UAE double taxation agreement expired on 31 December 2021, so there is no treaty to reduce German withholding tax or settle residence disputes.15
- UAE transfer pricing rules apply to the parent's transactions with the GmbH, as German rules do on the other side, so intercompany pricing must work in both countries.1617
- Corporate income tax is 15% for assessment periods up to 2027, plus a 5.5% solidarity surcharge on that tax and trade tax at 3.5% multiplied by the municipal multiplier, which averaged 410% in 2025.18192021
- Dividends from the GmbH to the UAE parent bear 25% withholding tax plus solidarity surcharge. A foreign corporation can reclaim two fifths of the withholding tax, but only if it passes the anti-treaty-shopping rule in § 50d(3) EStG.2223
- VAT is 19%, with 7% for listed supplies. Related-party transactions with the UAE parent must be documented; a master file is needed only from EUR 100 million of revenue.2417
- If the group has consolidated revenue of EUR 750 million or more in two of the last four years, the GmbH falls under the German minimum tax act regardless of any treaty.25
Hiring in Germany and moving staff from the UAE
Staff hired by the GmbH are fully covered by German employment and social insurance law. Staff moving from the UAE need German residence and work authorisation, and ending their UAE employment can trigger end-of-service gratuity.
- A foreign employee with at least a year of continuous service who leaves the UAE parent to join the GmbH is entitled to end-of-service gratuity on their basic wage, so transfers have a cash cost in the UAE.2627
- UAE national employees are in the UAE pension scheme; whether contributions continue during a posting to Germany was not confirmed and needs advice.28
- The statutory minimum wage is EUR 13.90 gross an hour from 1 January 2026.29
- Employer and employee share German social insurance contributions, for example pension insurance at 18.6% and unemployment insurance at 2.6% in 2026.30
- Non-EU staff, including those transferred from the UAE, can use the EU Blue Card where they meet the salary threshold, set as a share of the pension contribution ceiling.31
- Staff posted from the UAE for a period limited in advance can stay outside German social insurance under the Einstrahlung rule, as there is no social security agreement to rely on; staff employed by the GmbH are insured in Germany.32
Bank account, capital and data flows
The GmbH needs a German bank account into which capital is paid before registration, and both German and UAE banks will look through to the ultimate owners. Personal data sent from the GmbH to the UAE parent needs a GDPR transfer tool, because the UAE has no EU adequacy decision.
- UAE banks identify every individual holding 25% or more of a corporate customer, so the parent's own KYC file is a useful starting point for the German bank.33
- Personal data sent from the UAE parent to Germany can be transferred under the UAE PDPL in cases the Data Office approves or other listed cases such as explicit consent; free-zone entities with their own data law follow that law instead.34
- Before registration, the managing directors must declare that the capital contributions have been made and are at their free disposal, which in practice means paying into a German bank account first.35
- The UAE is not on the EU list of adequacy decisions, so transfers of personal data from the GmbH to the UAE parent need safeguards such as standard contractual clauses.36
Trade terms, investment protection and disputes
There is no EU–UAE free trade agreement yet, so goods moving between the UAE and Germany get no preferential tariff. A Germany–UAE investment treaty has been in force since 1999, and both countries apply the New York Convention.
- The Germany–UAE bilateral investment treaty has been in force since 2 July 1999 and may protect the UAE parent's investment in the GmbH.39
- Germany has applied the New York Convention since 1961, so arbitration is a workable choice for contracts between the parent and the GmbH or with German customers.40
Structures to consider
These are the structures businesses commonly weigh, not a recommendation. The right one depends on the facts listed under "What we need from you".
What has to happen first
- United Arab EmiratesUAE board approves the German entity, its capital and the managing directors; decide GmbH, UG or branch.
- United Arab EmiratesPrepare and legalise UAE documents (trade licence, constitutional documents, board resolution, powers of attorney) and obtain certified German translations.After step 1
- GermanyNotarise the GmbH articles (in person, by proxy or by video) and appoint the managing directors.After step 2
- Both sidesOpen a German bank account for the company in formation and pay in at least the required capital.After step 3
- GermanyNotary files the registration with the commercial register; the GmbH exists on entry.After step 4
- GermanyReport beneficial owners to the Transparency Register and file the trade notification (Gewerbeanzeige).After step 5
- GermanyRegister with the tax office for corporate tax, trade tax, VAT and payroll; set up e-invoicing.After step 5
- Both sidesPut intercompany agreements and transfer pricing in place that work under both German and UAE rules, plus data transfer clauses.After step 5
- Both sidesHire locally and arrange Blue Cards or other permits for staff moving from the UAE; settle UAE gratuity for transferred staff.After step 5
- Both sidesBefore the first dividend, check UAE participation exemption conditions and whether the parent can claim the German two-fifths refund under § 50d(3) EStG.After step 7
- Both sidesOngoing: German tax returns, annual accounts filed within twelve months, audit if above the size limits, Bundesbank payment reports, UAE corporate tax return within nine months.After step 7
What we need from you before anyone can advise
- Whether the UAE parent is a mainland or free-zone company, and whether it is a Qualifying Free Zone Person.
- Who will be managing directors of the GmbH and where they will live.
- Expected German revenue and headcount (audit, works council, data protection officer thresholds).
- Whether goods will be shipped from the UAE to Germany, and their origin and HS codes.
- How profits will be returned: dividends, service fees, royalties or interest.
- Group consolidated revenue (Pillar Two, transfer pricing documentation).
- Which staff will move from the UAE, their nationality and how long they will stay.
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- The Federal Ministry of Finance treaty status list as at 1 January 2026 could not yet be checked; the expiry of the Germany–UAE treaty relies on GTAI (April 2024). A report of new treaty negotiations from September 2026 was found only on a non-official site.
- The conditions of § 50d(3) EStG for the two-fifths withholding refund could not yet be checked.
- The UAE participation exemption for dividends and gains from a foreign subsidiary (ownership, holding period and subject-to-tax conditions) could not be confirmed: the Corporate Tax Law, FTA FAQ and Ministry of Finance pages were refused by the fetch proxy and the shared search budget was exhausted.
- German withholding tax on royalties and on service fees paid to a non-resident (§ 50a EStG) was not researched.
- Residence and work permit routes for UAE-based managing directors and the visa position of UAE nationals for business trips to Germany were not researched.
- EU customs duties on specific goods from the UAE were not researched; only the absence of a free trade agreement was confirmed.
- Whether a German–UAE social security agreement exists, and whether UAE pension contributions continue for UAE nationals posted abroad, were not confirmed.
- The UAE corporate tax treatment of profits of a German branch (foreign permanent establishment exemption) was not confirmed.
Brief for your advisers
Questions to put to your advisers in each country. Copy them, or download them as a text file to send with your requirement.
- German notary: which UAE documents do you need, with what legalisation and translation, and can the articles be notarised by video?
- German tax adviser: what is the total tax rate in our chosen municipality, and how will dividends to our UAE parent be taxed without a treaty?
- German tax adviser: can our UAE parent pass § 50d(3) EStG for the two-fifths withholding tax refund given its substance in the UAE?
- UAE tax adviser: will dividends and gains from the GmbH qualify for the UAE participation exemption, given the German tax rate?
- Both tax advisers: what transfer pricing method suits the GmbH (distributor, service provider or full-risk entity), and what documentation does each country need?
- German employment adviser: which permits suit staff moving from the UAE, and when do works council and other headcount thresholds apply?
- Data protection adviser: what transfer mechanism should we use for personal data flowing between the GmbH and the UAE parent?
- Customs adviser: what EU duties apply to goods we ship from the UAE, and what is the status of the EU–UAE trade negotiations?
Who can help, on each side
United Arab Emirates
- Setting up and running a company · Led by Dr Hajra Nazir
- Tax and structuring · Led by Priju Dominic
- Payments and currency · Arranged by WONE Global on request
- Contracts and commercial law · Arranged by WONE Global on request
- Accounting and annual filings · Led by Priju Dominic
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Data protection and cyber · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
- Disputes and arbitration · Arranged by WONE Global on request
Germany
- Setting up and running a company · Arranged by WONE Global on request
- Tax and structuring · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Contracts and commercial law · Arranged by WONE Global on request
- Accounting and annual filings · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Data protection and cyber · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
- Disputes and arbitration · Arranged by WONE Global on request
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Corporate tax is charged at 0% on taxable income up to AED 375,000 and at 9% on taxable income above AED 375,000. Federal; applies in all seven emirates and to mainland and free zone businesses unless the Qualifying Free Zone Person regime applies. Exempt persons are listed in ae-tax-017.
Rates set by Article 3(1) of Federal Decree-Law No. 47 of 2022 with the threshold fixed by this Cabinet Decision.
The Central Bank of the UAE maintains a fixed exchange rate of the dirham against the US dollar, committing to buy dirhams against dollars at 3.673 and to sell dirhams for dollars at 3.672 with eligible market counterparties. Federal; applies to the CBUAE's dealings with eligible market counterparties. The page does not state when the peg began.
The federal economics ministry may review whether the direct or indirect acquisition of a domestic company, or of a separable business unit or its essential operating assets, by a non-EU acquirer is likely to affect public order or security. Cross-sectoral review; acquirers from outside the EU (Unionsfremde).
The statutory text names the 'Bundesministerium für Wirtschaft und Klimaschutz'. Confirm the ministry's current name and contact point before filing.
Residents must report incoming and outgoing cross-border payments to the Deutsche Bundesbank. Residents (Inländer) under the Foreign Trade and Payments Ordinance; reporting deadlines in § 71 Abs. 6 AWV; exemptions in de-banking-002.
The United Arab Emirates does not appear in the HCCH status table of the Apostille Convention, so documents for use in the UAE cannot be apostilled and go through legalisation and attestation instead. International. The consequence (legalisation route) is our reading, consistent with the UAE requirement that foreign judgments be attested by the Ministry of Foreign Affairs.
Commercial register applications for a foreign company's branch must be made in German and notarially certified, with certified German translations of foreign-language documents and an apostille or legalisation for signatures certified abroad. Chamber guidance (status January 2022); also states that a branch has no separate legal personality and no minimum capital, and that a dependent establishment (Betriebsstätte) is not entered in the commercial register.
Secondary source: guidance from a public-law chamber of commerce, dated January 2022, used because the statutory filing-form rules could not be reached within the research window. Confirm current practice with the notary and register court.
A beneficial owner is a natural person who owns or ultimately controls a legal person directly or indirectly through 25% or more of the ownership, or who controls it by other means such as the right to appoint or remove most directors. Mainland and non-financial free zone legal persons. Excluded entities are set out in ae-establish-009. Where no person meets the test, the resolution provides fallback rules.
Cabinet Resolution No. 109 of 2023 replaced Cabinet Resolution No. 58 of 2020. JAFZA's guidance gives 15 December 2023 as its effective date; the resolution itself says it takes effect the day after Official Gazette publication.
A beneficial owner of a company is any natural person who directly or indirectly holds more than 25 percent of the capital, controls more than 25 percent of the voting rights or exercises comparable control; if none can be identified, the legal representative or managing partner is deemed the beneficial owner. Companies other than registered foundations and listed companies subject to equivalent transparency rules.
A GmbH must have share capital of at least EUR 25,000. Gesellschaft mit beschränkter Haftung (GmbH); the UG (haftungsbeschränkt) variant may be formed with less (see de-establish-005).
A company formed with share capital below the EUR 25,000 GmbH minimum must use the designation 'Unternehmergesellschaft (haftungsbeschränkt)' or 'UG (haftungsbeschränkt)', may be filed for registration only when its capital is fully paid in, and cannot use contributions in kind. UG (haftungsbeschränkt) under § 5a GmbHG.
The articles of association (Gesellschaftsvertrag) of a GmbH require notarial form and must be signed by all shareholders. GmbH and UG formation.
A GmbH comes into existence and gains full legal capacity only on entry in the commercial register, and the registration application is filed electronically through a notary. GmbH and UG; the service description lists required documents including the articles, shareholder list, managing directors' declarations and a domestic business address. Fees depend on the work involved and are not stated.
Official federal service-catalogue entry contributed by a state administration; the legal requirements are federal.
Filings and entries for a German branch of a company whose seat is abroad are made at the register court in whose district the branch is located. Branches (Zweigniederlassungen) of foreign legal entities and commercial companies.
Legal entities under private law and registered partnerships must obtain, keep up to date and report details of their beneficial owners electronically to the registry authority for the Transparency Register without delay. Applies to German companies (including GmbH and UG) and registered partnerships; certain foreign entities are also covered (see de-regulatory-003).
§ 20 Abs. 2 as displayed contains no notification fiction (Mitteilungsfiktion); an active report is required.
The double taxation agreement between Germany and the United Arab Emirates of 1 July 2010 expired on 31 December 2021, and Germany Trade & Invest reported no efforts to conclude a new one. Income tax treaty only. Since 1 January 2022 German and UAE domestic rules apply without treaty relief, for example to German withholding tax on dividends paid to a UAE parent.
GTAI is the German federal economic development agency; its page is dated 19 April 2024. The Federal Ministry of Finance treaty status list as at 1 January 2026 could not yet be checked. A tax news site reported in October 2026 that negotiations on a new treaty had begun in September 2026; this was not confirmed on an official page.
UAE transfer pricing rules apply to transactions with related parties and connected persons, whether they are on the mainland, in a free zone or abroad. Covers the UAE company's dealings with its Indian parent and sister companies.
Taxpayers must keep transfer pricing records for transactions with related parties, and the group-wide master file (Stammdokumentation) is required only where the company's revenue in the previous financial year was EUR 100 million or more. Cross-border related-party transactions within the meaning of § 1 Abs. 4 AStG.
Corporate income tax is 15 percent of taxable income for assessment periods up to and including 2027. Corporations subject to Körperschaftsteuer; solidarity surcharge and trade tax are charged in addition.
A solidarity surcharge of 5.5 percent is levied on assessed corporate income tax. Base is assessed corporate income tax reduced by creditable or refunded corporate tax.
Trade tax is assessed by applying a base rate (Steuermesszahl) of 3.5 percent to trade income; an allowance of EUR 24,500 applies only to individuals and partnerships. Gewerbesteuer; corporations receive no allowance under § 11 Abs. 1 Nr. 1.
The average trade tax multiplier across all German municipalities was 410 percent in 2025. National average; individual municipal multipliers differ.
German withholding tax (Kapitalertragsteuer) on dividends is 25% of the gross dividend. Dividends from German corporations such as a GmbH, including those paid to foreign shareholders; the solidarity surcharge is levied on top and treaty or EU directive relief may reduce the final burden where available.
A foreign corporation with limited German tax liability can have two fifths of the German withholding tax deducted from its dividends refunded, subject to the German anti-treaty-shopping rule in § 50d(3) EStG. Applies to corporations, associations and estates with limited tax liability under § 2 No. 1 KStG. The refund is claimed from the Federal Central Tax Office (Bundeszentralamt für Steuern); treaty or EU directive claims are unaffected.
The conditions of § 50d(3) EStG (substance and business purpose of the foreign shareholder) could not yet be checked.
The standard VAT rate is 19 percent and the reduced rate, for listed supplies, is 7 percent. Umsatzsteuer; the reduced rate applies only to supplies enumerated in § 12 Abs. 2 UStG.
German entities of groups whose ultimate parent reports annual revenue of EUR 750 million or more in at least two of the four preceding financial years are subject to the minimum tax (Pillar Two), regardless of tax treaties. Mindeststeuergesetz; joint ventures are also covered; threshold prorated for short or long financial years.
A foreign full-time worker in the UAE becomes entitled to end-of-service gratuity after completing one or more years of continuous service, and the gratuity is calculated on the basic wage. Mainland private sector under Federal Decree-Law No. 33 of 2021. DIFC and ADGM have their own employment laws.
Read from the text published on the UAE Legislation Portal; the portal records later amendments, which were not reviewed for this point.
A foreign worker's end-of-service gratuity is 21 days' wage for each of the first five years of service and 30 days' wage for each further year, capped at two years' wage in total. Mainland private sector. The two-year cap is stated for foreign workers. The wage basis for the calculation and the treatment of UAE nationals were not reviewed here.
Pension contributions for UAE national employees are 20% of the gross remuneration stated in the employment contract: 5% paid by the employee, 12.5% by the employer and 2.5% by the government; in Abu Dhabi the total is 26%, with 15% from the employer and 6% from the government. Qualifying UAE and other GCC national employees only. The employer withholds and remits the employee share.
Secondary source; the General Pensions and Social Security Authority and Abu Dhabi Pension Fund pages could not yet be checked. Confirm rates and any salary cap with the pension authority.
The statutory minimum wage is EUR 13.90 gross per hour from 1 January 2026. All employees covered by the Minimum Wage Act.
In 2026 German general pension insurance is 18.6% and unemployment insurance 2.6% of gross pay, each shared equally between employer and employee, on earnings up to EUR 8,450 a month. General pension insurance (not the miners' scheme, which has different rates and a EUR 10,400 ceiling).
An EU Blue Card requires a salary of at least 50 percent of the annual contribution assessment ceiling of the general pension insurance, or at least 45.3 percent with Federal Employment Agency approval for listed occupation groups and for graduates who obtained their degree no more than three years before applying. Non-EU skilled workers with a qualifying degree; the euro threshold changes each year with the contribution ceiling.
German compulsory social insurance does not apply to employees sent to Germany from an employment relationship based abroad where the posting is limited in time in advance, by the nature of the work or by contract (Einstrahlung). Postings into Germany where no social security agreement or EU rule applies; a locally employed GmbH employee is insured in Germany.
For a corporate customer, CBUAE-licensed financial institutions should identify and verify every individual who alone or jointly holds a controlling ownership interest of 25% or more, and only where none exists fall back on the individual who exercises control. CBUAE-licensed financial institutions (banks, exchange houses, finance companies and others). Sections 3.2.2 and 3.2.5 of the guidance; customers should generally be identified and verified before the relationship is established.
The Rulebook shows the guidance as in force with an effective date of 7/11/2025, but its legal-basis section still cites the 2018 AML law and its 2019 executive decision, which have been replaced. Confirm the current version with the bank.
The PDPL allows personal data to be transferred outside the UAE in cases approved by the Data Office, such as jurisdictions with adequate protection or agreements the UAE has joined, and in other listed cases including the data subject's explicit consent. Federal PDPL; Article 22 (Data Office-approved cases) and Article 23 (other cases).
The GmbH registration application must include a declaration by all applicants that the contributions have been made as required and are at the free disposal of the managing directors. GmbH and UG formation; in practice requires a bank account into which cash contributions are paid.
The statement that a bank account is needed in practice is an inference placed in scope, not stated by the source.
The European Commission has adopted adequacy decisions for Andorra, Argentina, Brazil, Canada (commercial organisations), the Faroe Islands, Guernsey, Israel, the Isle of Man, Japan, Jersey, New Zealand, the Republic of Korea, Switzerland, the United Kingdom, the United States (commercial organisations participating in the EU-US Data Privacy Framework), Uruguay and the European Patent Organisation. EU law applying in Germany. Singapore, India, the UAE and Saudi Arabia are not on the list. The EU-US Data Privacy Framework decision is dated 10 July 2023; the UK decisions were renewed on 19 December 2025; mutual adequacy with Brazil was adopted in early 2026.
The European Commission described its free trade agreement negotiations with the United Arab Emirates as ongoing in March 2026, while talks with the Gulf Cooperation Council as a whole were at the scoping stage. No EU–UAE or EU–GCC free trade agreement is in force, so goods from the UAE enter the EU on standard EU customs terms. Status as described for the Commission's civil society dialogue of 24 March 2026; later progress was not confirmed.
The UAE acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 21 August 2006, with entry into force on 19 November 2006, and the status table shows no declarations or reservations. Federal; applies to recognition and enforcement of foreign arbitral awards.
The Germany–United Arab Emirates bilateral investment treaty, signed on 21 June 1997, has been in force since 2 July 1999. Protects qualifying UAE investments in Germany and German investments in the UAE; the treaty text, including its dispute settlement clause, was not reviewed here.
Germany signed the New York Convention on 10 June 1958, ratified it on 30 June 1961 and it entered into force for Germany on 28 September 1961, without reservations or declarations. Recognition and enforcement of foreign arbitral awards.
