A startup has little in common with an ordinary GmbH for tax purposes: cap table, employee equity, convertible loans, founder compensation, international investors, crypto treasury. Early-stage mistakes get expensive later. We support founders from the very first structuring decision through to exit — personally, digitally, in four languages.
The choice at the outset shapes your tax burden over ten years. A UG for the first market test, a GmbH as the standard for seriously operated startups. For VC-funded founders we usually recommend the holding: your personal investment GmbH holds the shares in the startup. At exit, § 8b KStG applies — around 1.5 % effective tax instead of 25–28 % on a direct holding. Building the holding afterwards usually means paying tax on the transfer. This question belongs in the first consultation, not at the end of the growth phase.
Anyone wanting to attract talent needs equity participation. Real ESOP (actual shares) was significantly improved by the Future Financing Act and § 19a EStG — up to fifteen years' tax deferral is possible where the conditions are met. VSOP (virtual shares) remains the German standard model: wage tax only on payout, no notary, a clean cap table. We design vesting, cliff, and good- and bad-leaver rules fairly for both sides.
Convertibles and convertible loans are the most common route for pre-seed and seed: initially a loan that only converts in the next round. SAFEs from the US are only legally sound in Germany if structured as convertible loans or participation rights — we usually recommend conversion. Anyone who falls below a one-percent holding through dilution loses taxation under § 17 EStG; we keep an eye on the threshold.
How do you pay yourself without losing unnecessary tax? Usually a combination of managing-director salary and holding distributions: through the holding, § 8b KStG applies (around 1.5 % effective), and the capital stays available for further investment. On relocation, § 6 AStG hits founders unexpectedly hard — the deemed disposal can trigger seven-figure tax debts without any liquidity. Avoidance and deferral have to be built up years in advance.
Strategic preparation pays off at the latest twelve months before an exit, and considerably more three years ahead. The first fork is share deal versus asset deal — worlds apart for tax. Anyone without a holding once the topic gets serious usually has a problem. Starting early saves six- to seven-figure amounts — experience from actual engagements, not a marketing claim.
A UG for the first market test, a GmbH as the standard for seriously operated startups. For VC-funded founders, usually the holding structure: the exit then runs via § 8b KStG with around 1.5 % effective tax instead of 25–28 % on a direct holding. The decision belongs at the start — made later, it usually costs tax on the transfer.
Real ESOP has become more attractive since § 19a EStG (Future Financing Act): up to 15 years' tax deferral. VSOP remains the simpler standard model — no notary, no dilution, wage tax only on payout. In the early stage VSOP is usually sensible; after Series A with SME status, real ESOP becomes interesting.
Anyone leaving Germany with a holding of one percent or more is treated under § 6 AStG as if they had sold their shares — a deemed disposal that can trigger seven-figure tax debts without any actual liquidity. Avoidance and deferral must be built up years before departure.
In a free initial consultation, we clarify which structure best fits your situation.
Request an initial consultation
