United Kingdom Desk

UK desk: doing business in Germany after Brexit

Our UK desk starts from a simple fact: since the end of the Brexit transition period on 31 December 2020, UK businesses operating in Germany have dealt with Germany as a third country in many respects. The freedom of establishment no longer protects UK companies, EU rules on jurisdiction and enforcement no longer apply to new UK proceedings, the free movement of workers has ended, and goods trade runs under the EU-UK Trade and Cooperation Agreement with customs formalities and rules of origin.

At the same time, the two economies remain closely integrated, and new instruments have restored some legal certainty, notably the Hague Judgments Convention 2019, which has applied between the EU and the UK since 1 July 2025. This page brings together the German law issues that UK businesses typically face, from the choice of entity to the enforcement of judgments.

This page is part of our international clients practice. It describes the legal framework and how we work, without claims about individual team members' backgrounds.

Establishing a German entity for a UK business

Before Brexit, many UK businesses ran German operations through a UK private limited company with a German branch, and some entrepreneurs used a UK Ltd as their main vehicle for German business. Since the end of the transition period, a UK company can no longer rely on the EU freedom of establishment or on the EU Company Law Directive's rules for branches.

The Federal Court of Justice confirmed that, after the transition period, the EU rules on the registration of branches of companies from other Member States no longer apply to a UK limited company and that it can no longer invoke the freedom of establishment (BGH, order of 16 February 2021 – II ZB 25/17).

Under German conflict of laws rules for companies from third countries, a UK company whose real seat of administration is in Germany risks being treated as a German partnership or, with a single shareholder, as a sole trader, with unlimited personal liability of its shareholders. UK businesses with substantial German operations therefore usually establish a German GmbH, which requires share capital of at least EUR 25,000, or convert their UK structure. A UK company with its real seat in the UK can still register a German branch, but the parent remains fully liable and the branch creates a German permanent establishment for tax. See our GmbH formation checklist.

Restructuring legacy structures

Groups that still have UK companies holding German real estate, German businesses or German employment relationships should review whether their structure is still appropriate. Options include transferring the business to a German or other EU company, cross-border transactions into an EU entity, and adjustments to governance so that the real seat of administration is clearly in the UK.

Cross-border mergers and conversions under the German Transformation Act are available only within the EU and EEA, so a direct cross-border merger of a UK company into a German company is not available under these rules; asset transfers or share-for-share exchanges are alternatives. Tax consequences, including German exit taxation and real estate transfer tax, must be considered.

Tax treaty and withholding taxes

The double tax treaty between Germany and the United Kingdom continues to apply after Brexit, but the EU Parent-Subsidiary and Interest and Royalties Directives no longer cover payments between German and UK companies. Dividends from a German subsidiary to a UK parent therefore rely on treaty relief, which German anti-treaty-shopping rules make conditional on sufficient substance at the level of the UK recipient. UK holding companies used for German investments should be reviewed for this reason. Our UK desk works with tax advisers on these points and on transfer pricing between UK and German group companies.

Jurisdiction and enforcement of UK judgments

For proceedings instituted in the UK before 1 January 2021, the Brussels Ia Regulation still governs recognition and enforcement in Germany. For later proceedings, it no longer applies. Exclusive choice of court agreements are covered by the Hague Choice of Court Convention 2005, to which both the EU and the UK are parties, although there is debate about its application to agreements concluded before the UK joined in its own right. Since 1 July 2025, the Hague Judgments Convention 2019 has applied between the UK and the EU Member States, including Germany, for judgments in proceedings instituted after that date, according to the Hague Conference's status table.

Where neither convention applies, a UK judgment can only be enforced in Germany after a German court has issued an enforcement judgment, which requires the recognition conditions of § 328 ZPO to be met, including jurisdiction of the UK court from a German perspective and reciprocity (§ 328 ZPO). For contracts between UK and German parties, careful drafting of jurisdiction and arbitration clauses is therefore important. Arbitration remains attractive because both states are parties to the New York Convention, which makes awards enforceable in both countries. Since 1 April 2025, German Commercial Courts can also hear business disputes in English. See our insight on enforcing UK judgments after Brexit.

Data transfers between Germany and the UK

Personal data can be transferred from Germany to the UK on the basis of an EU adequacy decision for the UK under Article 45 GDPR, without additional safeguards such as standard contractual clauses. Adequacy decisions are reviewed periodically and can be amended, renewed or withdrawn, so companies should monitor their status and keep contingency plans. The UK's own data protection framework has diverged in some respects since Brexit, and transfers from the UK to the EU follow UK rules.

Groups with shared HR, CRM or IT systems across both countries should map which entity acts as controller for which data, update their intra-group data transfer agreements and make sure that privacy notices reflect the two separate regimes. For data transfers onward from the UK to third countries, the EU's assessment of UK safeguards plays a role. See our page on GDPR and German data protection law.

Cross-border employment and mobility

UK nationals who moved to Germany after the end of the transition period need a residence title permitting employment, such as the EU Blue Card, a skilled worker residence permit or an intra-corporate transfer card. Those who lived in Germany before 2021 have protected status under the Withdrawal Agreement. Business travel is possible without a visa for short stays, but activities beyond meetings can require a work permit. Posting UK employees to Germany requires compliance with German minimum working conditions and, depending on the social security coordination rules of the Trade and Cooperation Agreement, a certificate of coverage. See our page on immigration and global mobility.

Employees working in Germany are protected by mandatory German employment law regardless of a choice of English law in their contracts, including dismissal protection after six months of service in establishments with more than ten employees, works council rights and statutory holiday and working time rules. Post-contractual non-compete clauses are only enforceable if the employer pays compensation of at least half of the last remuneration.

UK-style garden leave and payment in lieu of notice are possible but must be structured under German law. Remote work by UK-based staff for a German entity, or German-based staff for a UK employer, raises payroll, social security and permanent establishment questions. A UK employer with staff in Germany must register for German payroll withholding in many cases, even without a German entity, and an employee habitually concluding contracts in Germany can create a permanent establishment for the UK company.

Trade, regulation and commercial contracts

Goods traded between the UK and Germany are subject to customs formalities, and preferential zero tariffs under the Trade and Cooperation Agreement require compliance with rules of origin. Products placed on the EU market must comply with EU product legislation and carry the CE marking where required, and an economic operator established in the EU must be responsible for many product categories. UK financial services firms lost their EU passports and need German or EU authorisation to serve German clients on a regulated basis. Professional qualifications obtained in the UK are no longer automatically recognised.

Intellectual property after Brexit

EU trademarks and registered Community designs no longer cover the United Kingdom, and the UK does not participate in the Unified Patent Court or the unitary patent. UK businesses selling in Germany should therefore check that their trademarks and designs are protected by EU or German registrations, and they can use the Unified Patent Court, including its German local divisions, to enforce European patents in participating Member States. Exhaustion of IP rights between the UK and the EU no longer works in both directions, which affects parallel imports and distribution strategies.

Commercial contracts governed by English law with German counterparties remain common, but German mandatory rules can still apply, for example to commercial agents working in Germany, who keep their right to a goodwill indemnity, and to standard terms used in Germany. Where German law is chosen, its strict review of standard terms between businesses should be considered. Our UK desk compares English and German contract practice for clients. See our page on commercial contracts and standard terms.

Public procurement and regulated markets

UK suppliers bidding for German public contracts no longer benefit from the EU procurement directives as such, but the UK is a party to the WTO Government Procurement Agreement, and the Trade and Cooperation Agreement contains procurement commitments, so UK bidders can participate in many tenders above the thresholds.

Defence and security tenders can be restricted to European bidders, as the Bundeswehr Procurement Acceleration Act allows in certain cases. In regulated sectors such as energy, telecoms, healthcare and financial services, UK companies need the German or EU licences that apply to non-EU providers, and sometimes a local establishment. Early analysis of these market access questions helps UK businesses plan their German operations realistically.

M&A and investment between the UK and Germany

UK buyers and investors are subject to German investment screening as non-EU acquirers: acquisitions of 10%, 20% or 25% of the voting rights in companies in sensitive sectors can be reviewed, and in listed sectors must be notified and may not close before clearance (§ 56 AWV). German share purchase agreements differ from UK practice in their reliance on independent guarantees, the need for notarisation of GmbH share transfers and the role of the notary.

UK private equity funds are active in German mid-market deals, and warranty and indemnity insurance is widely used. Locked-box mechanisms familiar from UK practice are common in Germany too, while German sellers usually resist the broad disclosure-based approach used in English-law agreements. German sellers of businesses to UK buyers should consider UK national security screening where relevant. See our page on mergers and acquisitions.

Restructuring and insolvency

The EU Insolvency Regulation no longer applies to UK proceedings opened after the transition period, so UK insolvency proceedings and restructuring plans are no longer automatically recognised in Germany. Recognition depends on German autonomous international insolvency law, which recognises foreign insolvency proceedings under certain conditions, while the recognition of UK schemes of arrangement and restructuring plans affecting German creditors is less certain. Groups with UK and German companies in financial difficulty should consider the German StaRUG framework or German insolvency proceedings for the German entities. Our UK desk helps coordinate such cross-border restructurings with advisers in the UK. See our page on restructuring and insolvency.

How our UK desk helps

Our UK desk advises UK businesses and investors on establishing and operating in Germany: setting up German subsidiaries, restructuring legacy UK company structures, employment and immigration, commercial contracts, data protection and regulatory licences. We act on acquisitions and investments, including investment screening, and advise on dispute resolution clauses and the enforcement of UK judgments and arbitral awards in Germany. We coordinate with our clients' advisers in the UK, explain German law by reference to familiar English concepts, and represent clients in German courts and arbitration. To discuss your plans, please contact us. This page provides general information, not legal advice.