Buying German Property Through a Foreign Company: What the Register, Notary, and Bank Actually Examine

The short answer: Can a foreign company buy property in Germany?

The answer begins with whether this particular acquisition can close.

Yes. A foreign legal form does not, by itself, prevent a purchase. It does not, by itself, mean the transaction can close either. For a foreign company seeking to acquire German property, the applicable conditions under Germany’s Anti-Money Laundering Act (Geldwäschegesetz, or GwG) require its Transparency Register status and coherent documentation of its ownership and control structure to be resolved before notarization. The notary has separate statutory duties. A bank providing an account or financing assesses the relationship under its own statutory, risk-based requirements. Acquisition, income, and a later sale of German property remain connected to German taxation. The details depend on the legal entity, ownership chain, property, timing, and countries involved. Federal Chamber of Notaries · GwG §§ 10, 12, 20 · Real Estate Transfer Tax Act (GrEStG) § 1 · Corporate Income Tax Act (KStG) § 2

That is the first decision in this article: Test whether the purchase can be executed before counting the proposed structure’s benefits in your investment decision.

The property is found. The decisive question is missing from the listing.

Picture an entrepreneur who has found a German commercial property for her foreign company. The seller wants a firm schedule. The broker is already discussing a notary appointment. An initial financing conversation has taken place. On screen is a tidy ownership chart: two companies, three stakeholders, and clear percentages.

Then another agreement appears. One person owns a smaller stake but holds consent rights over sales of significant assets and appointments to management. Who actually controls the company? What does the register show? What can the notary substantiate from the documents? Does the bank see the same structure and flow of funds?

This scene is illustrative. It does not claim that rejection is the usual outcome. It shows why forming a company and getting that company through a property purchase are different tasks.

The seller negotiates price and timing. The owner considers capital commitment and return. The notary checks the statutory conditions for the deed; the bank assesses its customer relationship and, if applicable, financing. None makes the others’ decision. If the answers are sought only after a binding commitment, the buyer’s negotiating position is already weaker. A qualified lawyer should address early which withdrawal rights or conditions precedent are available and sensible under the actual contract.

“Owning a company and being able to carry it through an international transaction are two different capabilities.”

The owner’s better first question is therefore not “Can I use this company?” but “Which assumption must be proven before my next irreversible signature?”

If your purchase involves several countries, a company, and financing, the NBF Mandate Fit can help establish whether a coordinated review makes sense; a specific scope follows an individual assessment. A standalone notarial question belongs directly with the notary.

The register, notary, and bank examine the same structure for different reasons

They may review similar documents, but they have different jobs. That makes sequence critical.

When a party to a transaction covered by § 1 of the Real Estate Transfer Tax Act acts for a covered legal form, GwG § 12(4) requires coherent documentation in text form of its ownership and control structure. The Federal Chamber of Notaries describes the prohibition on notarization where an affected foreign acquiring company cannot show the required Transparency Register entry.

German law specifies particular triggers and exceptions, including a complete relevant filing already made in another EU member state. GwG §§ 10, 20

Back to the entrepreneur: the seller wants to know by Friday whether the agreed schedule holds. The register entry has been made, but the data room contains only an old ownership chart; the veto agreement is missing. She first has the rights and register status reconciled with the relevant specialist adviser and notary, then asks her lawyer what promise she can make before that review. The notary appointment is a poor time to look for a decisive control agreement for the first time. Friday is an illustrative deadline; the actual contract determines any binding obligation.

Who is a beneficial owner, and what does the ownership chart leave out?

In a layered company structure, percentages give only part of the answer. They show equity holdings but do not necessarily reveal who can block decisions, appoint people, or exercise economic rights. The legal owner of an intermediate company is not necessarily the ultimate natural person whose ownership or control must be assessed.

Consider an illustrative boundary case: an individual owns 50% of a holding company, which owns 50% of the buyer. Multiplication yields 25%. Under today’s German GwG § 3(2), the indirect holding analysis asks, among other things, whether that person controls the intermediate holding company. Exactly 50% does not establish control automatically. Another person with a smaller equity stake may, meanwhile, control the buyer through effective veto rights. Both routes to control need specialist analysis; this example resolves no actual reporting obligation.

From 2027, a different ownership method applies within the scope of the EU rules. Articles 51–54 of the EU Anti-Money Laundering Regulation (AMLR) generally use a threshold of 25% or more, multiply holdings along a chain, and aggregate parallel chains. Rights conferring control by other means are assessed as well. The example’s 25% may therefore matter under the future ownership test even though percentages alone do not settle today’s German indirect ownership analysis.

Prepare a two-column control file: current German classification and future EU method, with agreements and rights alongside the percentages. Reusing an old beneficial-owner list without testing the new method would be the wrong shortcut.

What belongs in the evidence file? Typically, current extracts and formation documents for the companies involved; a dated ownership chain; relevant voting, veto, or appointment agreements; and identification of the natural persons determined under the specific rule. Trusts, foundations, and fiduciary arrangements add questions about the relevant roles. This is a working approach, not an exhaustive official document list. The responsible notary and, where relevant, the bank will say what they need for the particular case.

In a family office, the ownership chart raises a second question: Who can approve the purchase, refinancing, and sale internally—and does that match the ownership structure presented externally? If family members, an advisory board, and corporate governing bodies hold different decision rights, an investment considered “approved” internally can stall at the next required consent. That can tie up liquidity and strain accountability. Governance belongs ahead of the signature. A professional referring the client need not interpret every foreign control agreement personally; they should hand the open legal question and the full facts to the appropriate specialist and wait for a dependable answer before giving the client a timing or structure recommendation.

What applies today, and what changes on July 10, 2027?

In Germany, this story does not begin in 2027. GwG § 20(1) already covers foreign associations holding or planning to acquire German real estate, as well as certain share transactions. A complete relevant filing in another EU member state can provide an exception. Missing required information or control that has not been coherently documented can prevent notarization.

For the entrepreneur’s planned German notary appointment, the current German answer comes first. GwG §§ 10, 12 · Federal Chamber of Notaries

Existing German holdings deserve particular care. For foreign associations that acquired German real estate before January 1, 2020, the German transitional deadline for the relevant filing generally expired on June 30, 2023. The EU’s 2028 deadline does not postpone that German duty. An acquisition before 2014 may fall within the specific exception in EU Article 67 and still leave a German review or reporting question unresolved. GwG § 59(13) · AMLR Article 67(7)

What the new format adds: Commission Implementing Regulation (EU) 2026/2354, published on October 22, 2026, applies from July 10, 2027 and standardizes the reason for registration, supporting evidence, and a traceable ownership and control chain. It does not create a separate, general purchase trigger.

Existing entries do not need to be resubmitted immediately solely because of the new format. The AMLA drafts transmitted to the Commission in October 2026 concern other technical standards and must be assessed according to their actual legal status. Our AMLA analysis explains the broader supervisory architecture.

International owners face two less obvious tasks. If an entity formed outside the EU triggers requirements in several EU member states, Article 67(6) may allow proof of its registration in one member state to serve as evidence of registration. That is a reason to examine an existing filing, its completeness, and its documentary proof first; it does not replace national acquisition requirements or the local notary’s work.

And while the reported entity holds the relevant property, changes must be reported under Article 67(5) without undue delay and at the latest within 28 calendar days. Anyone changing veto rights in the future therefore needs someone responsible for updating the register, not merely a flawless file on purchase day. AMLR Article 67

The seller sets a deadline; the buyer must decide which assumption needs proof before her next commitment. For her, it is the current German register and notary path. For a family with an existing holding, it may be whether a German filing has been due for years and was made. A headline about 2027 answers neither question.

Is the register extract enough for the bank?

For the bank’s entire review, no. For part of its verification of beneficial-owner information, possibly, if the statutory conditions are met. The distinction matters. Under GwG § 12(3), consulting the Transparency Register can suffice to verify beneficial-owner information when the details match and there are no particular doubts or heightened risks calling for further checks.

Separate due diligence duties cover the customer’s identity, the nature and purpose of the relationship, and monitoring appropriate to the risk.

Additional evidence about the origin of wealth or funds may be needed depending on the risk profile and transaction; there is no universal list for every bank. GwG §§ 10, 15 Our bankability analysis examines the broader question of whether an overseas account is actually usable.

Return to the entrepreneur. Her company correctly identifies the people who control it. That does not yet establish which account will send the purchase price, to whom the funds are economically attributable, or whether financing will actually be available after review. The filing explains who controls the buyer. The payment path explains how the purchase will happen. Both accounts need to fit together, though they answer different questions.

German property purchases also have a clear payment restriction: under GwG § 16a, the consideration owed cannot be paid in cash, cryptoassets, gold, platinum, or gemstones. Evidence of an allowed payment method must be supplied to the acting notary under that provision. The notary’s plausibility review generally occurs before the application to register the buyer as owner in the Grundbuch, Germany’s land register; the statute provides details and exceptions concerning the proof. A plan to transfer the price “somehow, later” is not a complete closing plan.

Who pays raises another question. If a third party that is neither involved in the acquisition nor a beneficial owner is to pay more than €20,000 of the purchase price, § 6(1) no. 4 of the German real-estate anti-money-laundering reporting regulation (GwGMeldV-Immobilien) can create a reporting trigger for professionals subject to that regulation; the rule has exceptions, including for certain relatives or affiliated companies.

This is not a general ban on third-party payments. But a last-minute transfer through another company or individual can change the evidence chain and timetable. Identify the payer and legal basis in the payment plan from the start.

A robust working file therefore has four parts: ownership and control, authority to represent and sign, funds and payment path, and timeline and approval status. Mark each point as owner-reported, document-supported, professionally reviewed, or actually accepted by the institution concerned. Label an exploratory financing conversation as such, not as a credit commitment. Precise status language also protects advisers: it stops a nonbinding signal from turning into an apparent approval at the next handoff.

When the decision connects several countries, companies, banking, and assets: The Cross-Border Decision Blueprint documents a defined decision framework, alternatives, sequence, and questions for the appropriate specialists. It does not replace legal, tax, or lending decisions. For a single notarial issue, go directly to the notary.

Which taxes and costs remain attached to German property?

There may be sound reasons for a foreign company: governance, shared ownership, financing, investor rights, or a place within a broader asset structure. It does not move German real estate outside Germany’s tax reach. A purchase contract for German land generally falls under § 1 of the Real Estate Transfer Tax Act (GrEStG); certain share transactions can also trigger that tax. The transfer tax rate depends on the German federal state and the particular transaction. A “share deal” is therefore no blanket route around the tax.

This is where entity design becomes an asset decision. Put two calculations side by side. First: What remains after transfer tax and transaction costs, financing, ongoing property costs, German and potentially foreign tax consequences, and a later sale? Second: What happens if an unresolved control or financing issue moves the timetable?

In the illustrative case, the seller wants the buyer ready to close in four weeks. The bank has discussed financing but has not committed. A specialist has yet to analyze the veto agreement. Four weeks is not a standard compliance period; it is the assumed window for this particular deal. The owner asks for two scenarios to be calculated:

The second row does not claim that delay always creates costs or loses the property. It forces a more useful question: What sum or right is at stake under this exact contract on date X? A condition the seller accepts can change the imbalance. A written financing commitment can remove part of the uncertainty. Neither belongs in the calculation as a fact until it exists.

What the tax adviser must examine separately

A corporation with neither a registered seat nor a place of management in Germany can be subject to limited German corporate income tax liability on German-source income. Rent and a sale of German immovable property are possible connections.

If the company is in fact managed from Germany, unlimited German corporate income tax liability may become an issue. KStG §§ 1, 2 · Income Tax Act (EStG) § 49 · Fiscal Code (AO) § 10.

German annual property tax (Grundsteuer) and ongoing property costs also belong in the model; any ability to pass costs to tenants follows the applicable civil-law rules. Federal Ministry of Finance on Grundsteuer

A distinction that can change the numbers: German taxation of rent or sale proceeds of a foreign entity comparable to a corporation under EStG § 49(1) no. 2(f) does not automatically establish a domestic permanent establishment for German trade tax (Gewerbesteuer).

§ 2 of the Trade Tax Act (GewStG) needs separate analysis. In a case involving a property-holding GmbH, the Federal Fiscal Court (III R 35/20) did not simply treat the engagement of even a broadly active service company as the property company’s own permanent establishment; sustained activity of the company itself on site can change that conclusion.

Conversely, actual ongoing management in Germany can fundamentally change the corporate income tax question. What matters is how the company is operated, not merely where the property is or where the articles say its seat is.

Next, the tax treaty for the particular pair of countries must be assessed. A treaty does not itself create a German tax; it can allocate or limit a taxing right that arises under domestic law.

The planned exit route belongs in the same analysis: a direct sale of the property, a sale of shares in a property-rich company, and a later distribution are not interchangeable tax events. The conditions in EStG § 49(1) no. 2(e)(cc) may matter on a share sale.

For a foreign partnership classified differently for tax purposes, even the path to determining the income and taxable person must be reassessed. The assignment to specialists before purchase is therefore: Analyze entity classification, actual management, German presence, financing, and exit against one shared set of facts.

A qualified tax adviser must examine the specific country pair, applicable treaty, management, classification of income, possible trade tax, and eventual sale. Germany’s often-cited ten-year rule for private real estate sales is not a general exemption for a corporation’s exit. EStG §§ 23, 49 · GewStG § 2. A structure is better only if its net result and practical workability justify the extra effort.

Before the notary appointment: Three testable paths

The right path depends on the starting point. These three cases are deliberately illustrative and do not replace an individual assessment.

For the entrepreneur at the start, the perspective now changes. She does not promise the seller an unverified closing by Friday. She has the veto agreement and notarial condition clarified, requests the actual financing status, and calculates the four-week delay scenario. If an answer essential to the commitment remains open, she places that commitment on HOLD; her lawyer determines which next contractual step is possible. That is not a lost deal. It is a deliberate choice about when to expose capital to an unexamined risk.

The professional referrer also has a clear boundary. If they confirm the appointment based on an old ownership chart and the notary later finds a different control position, the client loses time and the referrer loses trust. A shared, dated statement of facts with four clear specialist assignments protects both. Your primary client relationship remains yours. Contact paths, specialist assignments, and how specialist findings are reported back are agreed before referral; NBF describes this approach under For Professionals.

Four decision gates before a binding decision

1. Control: The current entity, natural persons, and effective rights are documented; specialists have classified any outstanding agreements.
2. Notary and register: The German trigger that applies today, any existing holding, and the conditions for notarization have been clarified with the responsible notary.
3. Payment path: Available equity, legally permissible payment, evidence, and actual financing status fit the contractual timetable.
4. Net decision: Acquisition, holding, delay within this contract’s actual window, and exit have been modeled with the relevant specialists sufficiently for the owner to take responsibility for the commitment.

Those four decision gates may validate the planned company. They may also show that direct ownership, a later purchase, or a simpler structure makes better economic sense. Sign only for a route whose remaining conditions you understand and whose consequences you can bear.