Subsidiary vs. Branch Office Comparison
Legal Status
Separate legal entity, independent from parent
Extension of parent company, no separate legal identity
Liability
Limited to subsidiary assets
Parent company fully liable
Setup Time
4-8 weeks (notarization, Handelsregister)
2-4 weeks (registration only)
Setup Cost
\u20ac5.000-15.000 (GmbH minimum capital \u20ac25.000)
\u20ac1.000-5.000
Tax Treatment
Taxed locally, corporate tax + trade tax
Tax may apply locally + withholding on remittances
Profit Repatriation
Via dividends (withholding tax may apply)
Direct remittance (simpler)
Local Management
Required: Gesch\u00e4ftsf\u00fchrer (Managing Director)
Authorized representative sufficient
Financial Reporting
Separate financial statements required
Included in parent company accounts
Best For
Long-term presence, local contracts, hiring
Testing a market, project-based work