Family Office in Germany: Rules, Costs and Tax in 2026
No family office licence or regime was found in Germany: BaFin's family office guidance (July 2018, written before the Investment Firms Act) says that managing close relatives' private assets through the owner's employee or a company he controls can be licence-free if the services are not offered on the market and are limited to the closest family circle, and the Investment Firms Act (WpIG) exempts firms that provide investment services only to their parent, subsidiary or sister companies. Companies pay 15% corporate income tax plus a solidarity surcharge and municipal trade tax, about 30% combined on average according to Germany Trade & Invest (GTAI), and the corporate rate falls by one point a year from 2028 to 10% from 2032. Inheritance and gift tax applies to spouses and children above allowances of EUR 500,000 and EUR 400,000 at rates of 7% to 30%, and the Federal Constitutional Court heard challenges to the allowances and rates (12 October 2026) and to the relief for business assets (13 October 2026). [1, 2, 3, 4, 5, 6, 7, 8, 9]
Best for: Families who own companies in Germany and want an office that, under BaFin's guidance, can work without a licence if it serves only the closest family circle, or that serves only the family's group companies, and who accept German inheritance tax, trade tax and an exit tax on shareholdings when moving abroad.
At a glance
| Licence | BaFin: can be licence-free for closest family, off-market; WpIG exempts group-only firms |
|---|---|
| Minimum wealth | No wealth minimum in BaFin's family office guidance or the WpIG group exemption |
| Who counts as family | Close relatives up to first cousins (BaFin); subsidiaries of the owner (group privilege) |
| Serving several families | BaFin licence under section 15 WpIG for commercial portfolio management or advice |
| Law and courts | Civil Code (BGB) succession; BaFin with the Bundesbank; federal taxes, municipal trade tax |
| Substance | No family office rule found; a GmbH needs EUR 25,000 share capital and a notary |
| Holding vehicles | GmbH, UG, AG, KG; family foundations taxed every 30 years; foreign asset pools like them |
| Corporate tax | 15% plus 5.5% surcharge and trade tax, about 30% combined; 10% corporate tax from 2032 |
| Family office tax | No family office regime; 95% exemption on dividends (10% stake) and on share gains |
| Personal income tax | 45% from EUR 277,826 (2026) plus 5.5% surcharge; 25% flat tax on capital income |
| Inheritance tax | 7% to 30% for spouses and children above EUR 500,000 and EUR 400,000 allowances |
| Wills and succession | Compulsory share: half the statutory share for descendants, parents and spouse |
| Residence | No investor visa found; self-employment permit (section 21 Residence Act), up to 3 years |
| Time to set up | No official figure found |
| Official fees | Register: GmbH EUR 225, AG EUR 450, partnership EUR 150 (up to 3 partners); notary extra |
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Licence and who qualifies
How is a family office licensed in Germany?
No family office licence or registration was found in German law or on BaFin's licensing pages. BaFin's guidance on family offices (July 2018, written under the Banking Act before the WpIG and not updated since) says that if a private family office's owner has his employee or a company he controls also manage close relatives' private assets in financial instruments, this 'can' be licence-free family asset management: it lies outside the Banking Act (KWG) if the manager does not offer its services on the market and limits them to the owner's closest family circle; the guidance says it is not exhaustive and does not replace an enquiry to BaFin about the specific case, and the law firm Flick Gocke Schaumburg (2024) describes this 'family privilege' as BaFin's administrative view. The same guidance says a company to which the owner transfers assets and which invests that capital itself as a rule carries on licence-free own-account business (Eigengeschäft) and a company that counts as the owner's subsidiary acts licence-free under the group privilege, section 3 no. 6 WpIG exempts firms that provide investment services only to their parent, subsidiary or sister companies, and BaFin's KAGB letter (2013, amended 2015) says family office vehicles that invest family members' private assets without raising capital from third parties such as friends are not investment funds. [1, 2, 12, 13, 14]
What is the minimum wealth for a family office in Germany?
No minimum family wealth: the conditions in BaFin's family office guidance (services not offered on the market, the closest family circle, own-account or group structures), the group exemption in section 3 no. 6 WpIG and BaFin's KAGB family office exception set no wealth or asset test. The EUR 500,000 in BaFin's portfolio management guidance is not a minimum: it is the amount under management above which BaFin generally expects a commercially organised business, one of the two triggers for a licence when managing assets for others. [1, 2, 12, 15]
Who counts as family?
BaFin's family office guidance treats as the closest family circle, as a rule, close relatives such as spouses, partners, parents, siblings, children, nephews, nieces, grandchildren, uncles and aunts and first cousins; its KAGB letter defines the family the same way and adds their surviving dependants. Its portfolio management guidance lists a narrower circle (spouses, same-sex partners, parents, siblings, children, nephews, nieces and grandchildren), says that even unpaid discretionary management of close relatives' assets generally counts as portfolio management, and adds that it may need no licence if it is not offered on the market and serves only the closest family. Group companies count through the group privilege: a company that is the asset owner's subsidiary, where a natural person can be the parent. [1, 2, 12, 15]
Can one office serve several families?
An office serving several families (an 'external family office', which BaFin says usually works under service agreements) needs a BaFin licence under section 15 WpIG if it provides investment services such as investment advice (section 2(2) no. 4 WpIG) or portfolio management, 'the management of one or more portfolios invested in financial instruments for others with discretion' (section 2(2) no. 9), on a commercial basis or on a scale that needs a commercially organised business. BaFin's 2018 guidance treats portfolio management as commercial when it is meant to last and is run for profit, and always when it is paid, and generally expects a commercially organised business above EUR 500,000 under management or more than three portfolios. An office that pools capital from investors outside the family loses BaFin's KAGB family office exception, so investment fund rules may apply. [1, 12, 13, 15, 16, 17]
Law, substance and vehicles
Which law and courts apply?
Germany is a federal republic: succession is governed by the Civil Code (BGB) and handled by the probate court (Nachlassgericht) at the deceased's last habitual residence in Germany, and financial supervision is federal, with BaFin deciding on licences and the Deutsche Bundesbank involved in the review. Corporate, income and inheritance tax are federal laws, while each municipality sets its own trade tax multiplier (at least 200%, according to GTAI). [3, 10, 17, 18, 19, 20, 21]
What substance is required?
No office, staff or spending rule for a single family office was found in BaFin's guidance or in the WpIG exemptions. A GmbH needs minimum share capital of EUR 25,000, its articles are normally drafted and notarised by a German notary, and the application for registration in the commercial register must be filed by a German notary (GTAI). [1, 2, 22]
Which holding vehicles are available?
Families use companies such as the GmbH (minimum share capital EUR 25,000), its variant the UG and the AG, and partnerships registered in the commercial register such as the limited partnership (KG), which BaFin's guidance mentions with the asset owners as limited partners. A foundation set up substantially in the interest of one family or certain families (family foundation) is taxed on its assets every 30 years from the first transfer of assets to it, with a doubled child allowance (2 x EUR 400,000) and the class I rate that would apply to half the taxable assets (sections 1(1) no. 4, 9(1) no. 4 and 15(2) ErbStG). The ErbStG does not use the word trust: it treats the setting up or endowment of an 'asset pool under foreign law' (Vermögensmasse ausländischen Rechts) aimed at tying up assets like a transfer to a foundation, and its dissolution like the dissolution of one. [1, 5, 6, 21, 22, 23]
Tax
What is the corporate tax rate?
Corporate income tax is 15% of taxable income (section 23 KStG) plus a solidarity surcharge of 5.5% of the corporate tax (15.8% together, GTAI), and all commercial businesses also pay municipal trade tax: a 3.5% base rate times the municipality's multiplier of at least 200% (on average slightly above 400%), so GTAI puts the combined rate at about 30% on average. Under the Act for a Tax Investment Immediate Programme to Strengthen Germany as a Business Location, passed by the Bundestag on 26 June 2025, section 23 KStG now sets 15% up to 2027, 14% for 2028, 13% for 2029, 12% for 2030, 11% for 2031 and 10% from 2032; GTAI expects the combined rate to reach 25% by 2032. A family office or holding company pays these ordinary taxes; holdings are taxed as set out under family office tax. [3, 4, 10, 24]
Are there tax incentives for family offices?
No tax regime for family offices was found. Under section 8b KStG, dividends and gains on the sale of shares in corporations are left out of a company's income, but 5% of them count as non-deductible expenses (so 95% is exempt), and dividends qualify only if the direct holding was at least 10% at the start of the calendar year (a stake of at least 10% bought during the year counts as held from the start). For trade tax, dividends from a domestic corporation are deducted only for holdings of at least 15% at the start of the year (section 9 no. 2a GewStG), and the extended deduction in section 9 no. 1 sentence 2 GewStG, available on application, is for companies that exclusively manage and use their own real estate, or own real estate plus their own capital assets, and removes only the part of trade income from managing their own real estate. [25, 26]
Is there personal income tax?
For 2026 the income tax scale (section 32a EStG) has a basic allowance of EUR 12,348, 42% from EUR 69,879 and a top rate of 45% from EUR 277,826, plus a solidarity surcharge of 5.5% of the income tax, due only when the income tax exceeds EUR 20,350 (EUR 40,700 for joint assessment) with a phase-in zone; capital income is taxed at a flat 25% (section 32d EStG), and the surcharge is levied on it regardless of that limit (top rates of 47.475% and 26.375% with the surcharge, our calculation, before any church tax). Shareholders with at least 25%, or at least 1% who can exert significant influence through work for the company, can apply to have its dividends taxed outside the flat rate. People who have been taxed as residents for at least seven of the last twelve years and leave Germany are taxed on the unrealised gains on shares within section 17(1) EStG (section 6 AStG), payable on application in seven interest-free annual instalments, usually only against security, and the tax can lapse under conditions if they become resident again within seven years (extendable by up to five). [11, 20, 27, 28]
Is there inheritance or estate tax?
Inheritance and gift tax applies (ErbStG). Class I covers the spouse or registered partner, children and stepchildren and their descendants, and parents and grandparents on death; allowances are EUR 500,000 for a spouse or partner, EUR 400,000 for each child, EUR 200,000 for a grandchild, EUR 100,000 for other class I persons and EUR 20,000 for classes II and III, and the rates are 7% (up to EUR 75,000) to 30% (over EUR 26 million) in class I, 15% to 43% in class II (such as siblings, nephews and nieces, parents for gifts) and 30% to 50% in class III. Business assets can be 85% exempt, or 100% on an irrevocable option if no more than 20% of them is administrative assets, with five or seven-year payroll and holding conditions, as long as the favoured assets received from the same person within ten years do not exceed EUR 26 million (section 13a). German nationals who move abroad without keeping a German home still count as residents, and are taxed on everything they inherit or give, for five years (section 2). The Federal Constitutional Court heard the Bavarian government's challenge to federal competence, property valuation, the allowances and the rates (1 BvF 1/23) on 12 October 2026 and an heir's complaint about the business asset relief (1 BvR 804/22) on 13 October 2026; no decision date had been announced by 16 October 2026. The latest ErbStG amendment (law of 22 June 2026) only adds a rule on how notaries obtain tax identification numbers. [5, 6, 7, 8, 9, 29, 30, 31, 32]
Succession and residence
How do wills and succession work?
Descendants, parents and the spouse who are excluded by will can claim a compulsory share (Pflichtteil) in money worth half of their statutory share (section 2303 BGB); the e-Justice Portal adds that claims must be made within three years of knowledge and at the latest 30 years after the death. Wills can be handwritten, joint (for spouses and registered partners) or notarial, and an inheritance contract (Erbvertrag) is made before a notary; notarial wills go into official custody, recorded since 1 January 2012 in the Central Wills Register of the Federal Chamber of Notaries. The Portal notes that foreign succession law may apply where the deceased's last habitual residence was abroad and no choice of law was made, and the probate court issues the European Certificate of Succession, valid in nearly all EU states (not Ireland or Denmark). [18, 19]
Can the family get residence?
No investor visa or residence-by-investment programme was found in the official sources checked (Make it in Germany, Federal Foreign Office, BAMF, GTAI). Non-EU founders can get a residence permit for self-employment (section 21 Residence Act) if there is an economic interest in or regional need for the business, a positive economic effect is expected and financing is secured by own capital or a loan commitment; applicants over 45 need adequate pension provision, the permit is issued for up to three years, and a settlement permit can follow after three years if the business is successful and the livelihood of dependants is secured. The official pages set no minimum investment: BAMF reviews the planned capital among other factors, and a BAMF study (2015) says the minimum investment of EUR 250,000 was eliminated in 2012. [22, 33, 34, 35, 36]
Time and fees
How long does set-up take?
Not found in official sources. GTAI describes company formation as involving only a few steps but gives no time. [22]
What are the official fees?
Indicative, from the Commercial Register Fees Ordinance (HRegGebV, schedule accessed 19 October 2026): first registration of a GmbH or UG EUR 225 (EUR 360 with a contribution in kind), of an AG EUR 450 (EUR 540 with a contribution in kind), and of a partnership with up to three partners to register, such as a KG, EUR 150 plus EUR 60 for each further partner. Notary fees are set by law and depend on the value of the transaction (GTAI) and are not included; no family office licence fee exists, and BaFin fees for a WpIG licence were not checked. [22, 23]
Pros and cons
Pros
- BaFin's guidance says managing close relatives' assets can be licence-free if the office does not offer its services on the market and serves only the closest family circle, and section 3 no. 6 WpIG exempts firms that serve only their group companies.
- A family holding company is 95% exempt from corporate tax on gains from selling shares and on dividends from stakes of at least 10% (section 8b KStG).
- Corporate income tax falls from 15% (up to 2027) by one point a year to 10% from 2032, and business assets can be 85% or 100% exempt from inheritance tax, subject to payroll and holding conditions, if favoured assets from the same person within ten years do not exceed EUR 26 million.
Cons
- Inheritance and gift tax applies to spouses and children above allowances of EUR 500,000 and EUR 400,000, at 7% to 30%, and German nationals who move abroad without a German home stay fully liable for five years.
- No investor visa was found; a non-EU founder needs a self-employment permit, which requires an economic interest or regional need, an expected positive economic effect and secured financing.
- People taxed as residents for at least seven of the last twelve years pay exit tax on unrealised gains on shares within section 17(1) EStG when they leave Germany (section 6 AStG).
