GmbH Share Capital in Germany 2026: Minimum Requirements, Payment Rules and Permitted Uses

When you form a GmbH in Germany, one of the first questions you'll face is share capital (Stammkapital). The law requires a minimum of €25,000 — and at least half of that must be paid in before the company can be registered. But what exactly does that mean? When does the money need to be in the account? What can you spend it on? And how does this compare to the UG, which can technically start with €1? This guide covers everything founders need to know.

What Is Share Capital (Stammkapital)?

Share capital is the capital contributed by the shareholders when the company is formed. It serves as the financial foundation of the company and as a buffer for creditors. In a GmbH, shareholders are generally not personally liable for the company's debts — the share capital represents the minimum financial commitment the company makes to its creditors.

Minimum Share Capital: How Much Does a GmbH Need?

German law requires a GmbH to have a minimum share capital of €25,000 (§ 5 GmbHG). There is no maximum. Some founders choose to contribute significantly more if their business model requires it or if they want to signal financial strength to clients and banks.

When Must Share Capital Be Paid In?

The payment schedule is straightforward, but the timing is important:

• At least 50% of the share capital (€12,500 minimum) must actually be in the company bank account before the Handelsregister registration is filed.
• The remaining 50% can be called in later by the managing director as the company needs it.
• The managing director must confirm to the Handelsregister that the paid-in capital is freely available and not already spent.

Can You Contribute Assets Instead of Cash?

Yes, but it's significantly more complex. Non-cash contributions (Sacheinlagen) — such as machinery, vehicles, patents, or software licenses — are permitted, but must be explicitly described in the articles of association (Gesellschaftsvertrag) and supported by an appraisal report (Sachgründungsbericht). The Handelsregister scrutinizes these carefully. In practice, most founders use a straightforward cash contribution to avoid the administrative burden.

How Can Share Capital Be Used?

A common misconception: the share capital doesn't sit locked in an account forever. Once the company is registered, it can be used for legitimate business purposes — rent, salaries, equipment, marketing, and other operating expenses. What is not permitted is returning the capital to shareholders in a way that causes the company's equity to fall below the €25,000 threshold.

In practice: yes, you can pay yourself a salary from the share capital. Yes, you can pay for office rent. What you cannot do is distribute the share capital back to shareholders as a dividend before the company has earned it back through profits.

GmbH vs. UG: Share Capital Differences

The UG (haftungsbeschränkt) is a variant of the GmbH that can be formed with as little as €1 in share capital. The catch: a UG is legally required to retain 25% of its annual profit as reserves until the share capital reaches €25,000, at which point it can be converted into a GmbH.

In summary:

• GmbH: Minimum €25,000, no mandatory profit retention
• UG: Minimum €1, but 25% of profit must be retained as reserves until €25,000 is reached

Share Capital and Bookkeeping: What Founders Need to Track

Share capital appears as an equity line item on the liability side of the GmbH's balance sheet. In your GmbH bookkeeping, any losses reduce equity. If equity drops below half the registered share capital, the managing director must immediately convene a shareholders' meeting. If equity is fully depleted or the company is over-indebted, insolvency proceedings must be initiated.

Conclusion: Share Capital Is More Than a Formality

The €25,000 minimum share capital is not an arbitrary hurdle — it's the financial foundation your GmbH is built on and a minimum guarantee to your creditors. Understanding the rules around payment timing, permitted uses, and equity monitoring helps you avoid liability risks and run a properly capitalized company. Good bookkeeping from day one keeps your equity visible and gives you early warning if action is needed.