At a glance
- § 7(2) GmbHG requires the capital to be paid in and at the managing directors' free disposal before the company is filed. The statute does not name a German bank account, but in practice that is how the payment is evidenced, so you need one for a company that is not yet registered.
- Bank onboarding is built around a German address, a German tax number and a credit-bureau record. A founder in India has none of the three, so the application fails a check, not a judgement.
- Not every business account is open to a limited company, and providers publish their own lists of accepted passports and shareholder countries. Check the current list for your nationality before you act on any recommendation.
- India incorporates first and pays in the capital afterwards. Germany requires the capital first and issues the registration number last. When your Indian bank asks for a company number before releasing the transfer, it is asking for something that cannot exist yet, the deed of formation and the German account details are what it can work with instead.
- Many banks will only open an account for a company that is already registered, which is useless before the capital is paid in. Ask every bank whether it serves a GmbH in Gründung before anything else. And get the payment reference for the capital transfer from your notary in writing: a wrong one can force the whole payment to be reversed.
- Three routes do work: a direct bank that works with Indian passports without requiring a residence permit, a local branch bank with one appointment in person, or an Indian bank with a branch in Frankfurt.
- Within days of registration you will receive an official-looking demand for €300 to €1,200 that is a fraud, and it usually arrives before the genuine court bill, which is about €275 to €300 and comes from the Gerichtskasse.
What the law actually requires
Section 7(2) of the German Limited Liability Companies Act is short and it is the root of the whole problem. Before a GmbH may be filed for registration, at least a quarter of the nominal amount of each share must have been paid in, and together at least half of the minimum share capital: €12,500 in a standard €25,000 GmbH. That is § 7(2) GmbHG and it governs cash contributions. Contributions in kind are dealt with separately in § 7(3), which is where the requirement that they be at the managing directors' final, free disposal appears. The register court will not enter the company without that proof.
Read it again with a founder's eyes. The money has to be available to a company that does not yet exist, a GmbH in Gründung. And it has to be genuinely available to the managing director, not parked somewhere that only releases it later. German courts have been strict about this second half: an account that permits no disposal until registration has taken place does not satisfy the requirement.
This creates the loop that traps people. No registration means no tax number. No tax number means most banks' onboarding cannot complete. And no bank account means no registration.
Why banks say no
Almost never out of ill will, and almost never because of your nationality as such. Under the German Money Laundering Act a bank has to identify every beneficial owner, verify their identity against an accepted document, and understand where the money comes from. Around those duties most German banks have built an onboarding process that expects three things as a matter of course: a German residential address, a German tax identification number, and a credit-bureau record. None of the three is a legal requirement, they are how the systems are built.
A founder living in Bengaluru typically has none of the three. The application does not get argued about, it fails a check. And here is the part that costs founders the most time: a bank that cannot serve you will decline you, but it will not tell you who can. You lose three weeks, then start again somewhere else with the same documents and the same outcome.
One founder spent more than two weeks going from bank to bank in person and did not find a single one that would open an account for an Indian citizen with no German residence permit. The pattern behind the refusals was consistent: several banks were willing to open an account for a company that already existed in the commercial register, and not for one still being formed.
Read that against the sequence above and the trap is obvious. The company cannot be registered until the capital is paid in, and the capital cannot be paid in without an account. A bank that only serves registered companies is not a route at all at this stage, however friendly the conversation is. This is the single most important question to ask on the phone before you travel anywhere: do you open accounts for a GmbH in Gründung?
What goes wrong in practice
Four things, from the formations we have handled.
Applying for an account the provider never offered to a GmbH
Not every business account is open to a limited company, and some are built for freelancers and sole traders. Founders find one at the top of a comparison article, apply, and learn about the exclusion from the rejection. Before you send a single document, check whether that provider serves a GmbH in Gründung, a company in formation, not merely an existing company. It takes one email and saves three weeks.
Assuming an eligibility list includes your country
Providers that do onboard companies in formation publish lists of accepted passports and accepted shareholder countries, and those lists are not the same everywhere. Read the current list for your own nationality before you rely on any recommendation, including a recommendation from a guide like this one. They change, and a guide written last year is not evidence about this year.
A confirmation the notary cannot file
Even when an account exists, the notary and the register court have to be able to work with the proof of payment. What is needed is evidence that the capital has been paid in and is at the managing directors' free disposal, not a screenshot of a balance. Ask your notary which providers' confirmations he has actually filed successfully before you open anything. He knows, and it costs one email.
Assuming a branch bank is automatically the safe option
Branch banks can be excellent, and they normally identify the managing director in person, which may mean a flight. They are also locally autonomous: in our experience one branch may say yes where another says no, which is maddening, and is why a local introduction is worth more here than anywhere else in the process.
The sequence problem: India issues the number first, Germany issues it last
This one catches founders who have done everything else right, and it is nobody's mistake. It is two countries running the same steps in opposite orders.
In India a company is incorporated and receives its registration number, and the subscribers pay in the capital after that. Germany runs it the other way round. The capital has to be sitting in the account before the notary files anything, and the registration number is the last thing to arrive.
India, the order founders know
- The company is incorporated and the registration number is issued.
- The subscribers pay in the capital afterwards.
- The bank's outward-remittance file is therefore built around a company that already has a number.
Germany, the order the register requires
- The notary notarises the articles. The company in formation exists from that moment.
- The German bank opens the account for the company in formation, on the strength of the notary's documents.
- The share capital is paid into that account.
- The managing directors declare the capital is at their free disposal and the notary files the company with the register court.
- The court registers the company. Only now does the HRB number exist.
So when the Indian bank asks for the German company registration number before it will release the transfer, it is asking for something that cannot exist yet. Founders read that as obstruction, and it is not. It is a form built around the Indian sequence, handled by someone with no reason to know that the German one runs backwards.
What the Indian bank can work with instead is the notarial deed of formation and the details of the German business account. Both exist the moment the notary appointment has taken place. Getting that agreed with your bank in advance, in writing, is usually the difference between a transfer that takes days and one that takes weeks.
In one case the transfer of the share capital from India took six weeks. Nothing in the file was wrong and nobody had made a mistake. The Indian bank was working through its own documentation process for sending money abroad, and the question it kept returning to was the company registration number that did not exist yet.
In another, the founder got the money moving quickly and then put the wrong reference on the transfer. The payment could not be used as proof of the capital contribution in the form the notary needed, so it had to be sent back and made again. That reversal cost real money in fees and exchange rate, and it cost another three weeks. Ask your notary what the reference line has to say before you instruct the payment, it is one sentence, and it is the cheapest three weeks you will ever save.
The German side has its own lock. In practice a German bank opens the account for a company in formation only once it holds the notary's documents, so the account cannot be arranged before the appointment either. Both ends of the transfer hang on the same date, which is why everything a founder actually controls happens before it.
What the founders who do not lose weeks here have in common: they went to their Indian bank before the notary appointment, asked in writing which documents it would accept in place of a registration number, had the source-of-funds evidence ready in the form that bank wanted it, and had the German account requirements confirmed so that the account could be opened within days of the deed rather than within weeks.
He had formed his company through another provider, who told him the bank account was part of the service and would be taken care of. It was not. The company was registered, the account was still missing, and at that point the provider had no route to offer him.
He spent weeks going from bank to bank himself until one finally agreed to open it. The company existed on paper, the capital was stuck, and nothing could move in the meantime.
The problem was not that it is difficult. It is difficult. The problem was the promise. Nobody in Germany can promise you a bank account, and anyone who does has told you something they cannot deliver. What can be done is to know which banks open accounts for a company that is still being formed, to have the identification and source-of-funds evidence ready in the form that particular bank wants it, and to start that conversation before the notary appointment rather than after it.
The three routes that work, including remotely with an Indian passport
These are the ones we use. Which one fits depends on your shareholders, your business and how quickly you need the capital confirmation.
A direct bank that works with Indian passports
Identification with your Indian passport, and no German residence permit required for the managing director. For founders who stay in India this is normally the route that works, and it is the one most guides do not know about because it is not the account at the top of the comparison tables. It is remote, so there is no flight.
A local German bank, in person
One appointment at the branch. Slower, and it means travelling, but you end up with a named relationship manager in the town where your company is registered, which pays off later when you want a card limit, a guarantee or financing. We come with you to the appointment and we bring the file in the order the bank wants it.
An Indian bank with a branch in Frankfurt
Often the smoothest path if you already bank with them at home. Your existing relationship and your know-your-customer history carry weight, the branch operates in Germany under German banking supervision, and you can speak your own language on both sides of the transaction. Whether a particular branch counts as a domestic institution for a given purpose depends on its licence, worth asking before you rely on it.
Can you start trading before the company is registered?
Yes, and this is the point at which the waiting period stops being merely annoying and becomes genuinely dangerous.
From the moment the articles are notarised, a Vor-GmbH exists: a company in formation. It can hold a bank account, sign contracts, receive money and place orders. That is real, and it is not the same as trading in your own name.
But § 11(1) of the GmbH Act states plainly that the limited liability company as such does not exist before registration. And § 11(2) adds the sentence that catches people: whoever acts in the company's name before registration is personally and jointly liable. Not liable up to the share capital, personally, with everything they own. Before registration the GmbH does not yet exist as a legal entity, and that is the reason for the personal liability. What happens to it once the company is registered is not something we can tell you, ask a lawyer before you sign anything substantial.
Two further traps live in that same window. You have to trade as "GmbH i. G.", in Gründung. Drop the suffix and you have presented yourself as a registered limited company that does not yet exist, which creates its own liability. And the shareholders carry a top-up obligation: if the company's net assets on the day of registration are worth less than the share capital, they owe the difference. Spending the capital before registration is therefore not free.
The practical reading is not "do nothing". Small, low-risk steps in that window are normal, opening the account, signing an office agreement, buying equipment. Signing a large customer contract, taking on a lease or ordering stock you could not personally cover is a different decision entirely. The difference between waiting three weeks and being personally liable for a six-figure contract is usually three weeks. Ask before you sign, not after.
What to do, in which order
- Settle the banking route before the notary appointment. Not after. This single change removes most of the delay from a remote formation.
- Ask your Indian bank, in writing, which documents it will accept in place of a company registration number. Do this before the notary appointment. The answer you want names the deed of formation and the German account details.
- Ask every bank one question first: do you open accounts for a GmbH in Gründung? Many will only take a company that is already registered, which is of no use before the capital is paid in. This one question on the phone replaces weeks of appointments.
- Get the payment reference for the capital transfer in writing from your notary before you instruct it. A wrong reference can force the payment to be reversed and repeated.
- Ask the notary which confirmations he has successfully filed at your register court. He knows, and it costs one email.
- Get your documents legalised early. Passport certification, state attestation and the apostille from the Ministry of External Affairs take two to four weeks on a good run. Start while you are still choosing the company name.
- Prepare the source-of-funds story before the bank asks. Where the €12,500 comes from, documented. Salary, sale of an asset, an existing company's profits, with statements. This is the question that stalls files, and it is entirely preventable.
- Have a plan B ready so that a rejection costs you a day, not a month.
- Open the letters in month one carefully. See above.
It is worth showing what it looks like when the order is right, because everything above reads like a warning list otherwise.
One formation where the banking route and the documents had been settled before the notary appointment ran like this: notarisation, and two weeks later the company was entered in the commercial register. Two weeks after that, the tax number and the VAT identification number were issued. Four weeks from the notary to a company that could invoice. Nothing clever happened, the same steps were taken in a different order.
How many companies are formed and never trade?
People ask us this, and the honest answer is that no official statistic counts exactly that. Anyone quoting you a precise share is guessing. What does exist are three indicators worth knowing before you commit.
The KfW start-up monitor, a long-running representative population survey, reports that roughly a third of the founders it surveys give up their venture within three years and that about 60 % are still active after five. Note what is being counted: self-employed ventures of all kinds as reported by founders, not GmbH registrations. Most of those exits are for personal reasons rather than under economic duress.
Second, a minority of companies subject to the disclosure requirement do not file their annual accounts with the Bundesanzeiger, published disclosure rates have run around 90 %, though we have not been able to verify a current figure. That is an offence, not an oversight: the Federal Office of Justice runs administrative fine proceedings, with penalties between €2,500 and €25,000. A dormant company is not a free option, the obligations continue whether or not you trade.
Third, a register court may strike an asset-less company from the commercial register of its own motion under § 394 FamFG. Companies do quietly disappear this way.
The lesson we draw from our own files is simpler than any statistic. The companies that never trade are usually not the ones with a weak idea. They are the ones that ran out of patience somewhere between the notary and the bank, and the ones that budgeted the formation but not the first twelve months. Both are avoidable, which is why we built a cost calculator for year one that shows the third-party costs with none of our own fees in it.
And the bank is not the only place a remote formation stops. The tax office can refuse or park your tax number if the address is one that a large number of companies use for post alone, or if the company cannot show any actual trade, and some tax offices hand the file to a central office entirely, because they doubt the company is really managed in Germany when the managing director has no residence permit. A residence permit, in turn, does not follow from owning a company at all. Both are set out on our company formation page.
Questions
Sources
§ 7 GmbHG, capital to be paid in before registration: gesetze-im-internet.de
§ 11 GmbHG, personal liability of those acting before registration: gesetze-im-internet.de
§§ 10–11 GwG, customer due diligence and identification: gesetze-im-internet.de
§ 394 FamFG, deletion of asset-less companies: gesetze-im-internet.de
Survival and discontinuation rates of new businesses: KfW-Gründungsmonitor,
KfW Research
Warnings about fraudulent register and directory invoices: IHK München
Misleading directory offer letters: BGH, judgment of 30 June 2011, I ZR 157/10,
dejure.org
Administrative fines for failure to file annual accounts: Bundesamt für Justiz
Written by Christoph Schuler
Founder, Business Center Reutlingen. Fifteen years in international automotive at Daimler,
two of them living in Bengaluru.
Published 28 August 2026 · Last reviewed 5 September 2026
Business Center Reutlingen provides administrative and organisational support and introduces you to licensed professionals. We do not give legal or tax advice, in Germany only admitted lawyers (Rechtsanwälte) and tax advisors (Steuerberater) may do so. Bank policies, fees and eligibility lists change; verify the current position before you rely on anything here.