GmbH Capital Increase 2026: Share Capital, Notary Process and Tax Impact in Germany

Want to bring in new investors, convert your UG into a full GmbH, or simply strengthen your company's equity? In 2026, a capital increase (Kapitalerhöhung) is the standard German instrument for all three. This guide walks you through the three types, the five-step process, the costs, and the tax effects on both the GmbH and its shareholders.

What is a capital increase?

A Kapitalerhöhung raises the share capital (Stammkapital) of your GmbH or UG that is registered in the commercial register (Handelsregister). It is governed by §§ 55–57 GmbHG. Typical triggers:

• Onboarding new shareholders, for example an investor taking equity.
• Funding growth, new hires, or large capital expenditure.
• Converting a UG into a full GmbH once the €25,000 minimum capital is reached (see UG to GmbH conversion).
• Improving creditworthiness with banks, suppliers and grant providers.

Three types of capital increase

Cash capital increase. Shareholders pay fresh money into the company bank account. The most common and simplest variant.

Capital increase in kind (Sacheinlage). Contribution of assets such as machinery, IP, or equity stakes. Hidden reserves are typically disclosed for tax purposes, unless the Reorganization Tax Act (Umwandlungssteuergesetz) allows book values to be carried forward.

Capital increase from company funds. Free reserves and retained earnings are converted into share capital. No new money required — but an audited cut-off balance sheet is.

The 5-step process

1. Shareholder resolution passed with at least 75% of the votes cast (§ 53 Abs. 2 GmbHG).
2. Notarial recording of the resolution and the subscription declarations of any new shareholders.
3. Payment into the company account — for cash contributions at least 25% per new share, but never below half the new minimum capital. UG shareholders must pay 100% upfront.
4. Filing with the commercial register by the managing director, including proof of payment and an updated shareholder list.
5. Entry by the register court. The capital increase only becomes legally effective on registration.

How much does a capital increase cost?

Notary fees follow the GNotKG and scale with the new share capital. Realistic ranges:

• Notary: €200 to €1,000, depending on the transaction value.
• Commercial register: around €70 court fee.
• Optional: tax or legal advice.

Both items are deductible business expenses for the GmbH — the same logic we covered in the article on GmbH incorporation costs.

Tax effects on the company and its shareholders

At company level a capital increase is generally tax-neutral. With contributions in kind you can carry forward book values if the Reorganization Tax Act applies — otherwise hidden reserves are realized.

At shareholder level cash contributions are not separate acquisition costs of newly issued shares — they increase the acquisition costs of the existing stake. That reduces a future capital gain under § 17 EStG (or § 8b KStG for holding companies). On the balance sheet, equity moves from reserves or new cash into subscribed capital — see GmbH equity structure for the detail.

Special case UG — mandatory reserve and step-up to GmbH

A UG (haftungsbeschränkt) must allocate 25% of annual profits to a statutory reserve each year (§ 5a Abs. 3 GmbHG). Once that reserve plus the share capital reaches €25,000, you can run a capital increase from company funds and re-register the UG as a GmbH. The mandatory reserve then drops away — see UG to GmbH conversion.

Common mistakes

• Skipping the notary — a plain written resolution is not enough.
• Paying cash before the notarial recording — pre-payments can jeopardise registration.
• Contributions in kind without a valuation report — risk of make-good liability under § 9 GmbHG.
• Forgetting to update the Transparenzregister and the tax office after registration.

Bottom line

A capital increase is an established but highly formal process. Follow the five steps, budget for notary and court fees, and decide in advance whether cash, in-kind or reserve conversion fits your strategy. For the bookkeeping side, Norman keeps equity movements GoBD-compliant and lets you file the GmbH tax return without a tax advisor.