Open a Company in the Energy Sector in Germany
Open a Company in the Energy Sector in GermanyUpdated on Friday 14th April 2023
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Germany is one of the top consumers and producers of electricity in Europe and the country has been taking steps towards encouraging renewable energy and gradually phasing out other means of energy production. Because this business sector is regulated and subject to special provisions, our team of company formation lawyers in Germany can assist all investors interested in providing electricity services.
Investors who open a company in the energy sector in Germany will need to take into consideration the complex energetic demand of the country, the trends in terms of renewable energy as well as all of the legal, commercial and business requirements (including licensing) that apply for suppliers in this business field.
Germany has been shutting down nuclear power plants, however, the use of coal is still largely employed and it is expected to remain so for some time. Although the overall trend is to encourage the use of renewable energy, and to facilitate the development of these types of energy sources, the gross power generation sources remain divided between nuclear (with the lowest percentage), coal and renewable energy (including wind power, solar, hydropower and biomass).
Investments in the energy sector in Germany
Germany’s energy market is liberalized, meaning that business opportunities are in place for many market participants. The participation is not strictly limited to the actual production of energy. In fact, many companies in Germany operating in this field are not power plant owning companies but suppliers, companies concerned with bringing the energy into the homes of Germans.
The country has a clear focus on transitioning to an energy system based more and more on wind and solar energy, and less on nuclear power and coal-sourced energy. The renewable energy sector is one that presents important opportunities for investments both from local and foreign entrepreneurs. With the German government encouraging renewable energy commercialization, investors can find particular opportunities related to offshore wind farms.
The renewable energy sector is one where both large corporations and small and medium-sized companies engage in various types of activities and employ an increasing number of employees in Germany. According to the general energy-source for the renewable sector, wind energy remains the one with the largest share, followed by photovoltaics, hydropower, and biomass.
If you want to set up a business in the energy sector, you should also consider that you will need to open a bank account in Germany.
Energy companies in Germany
Companies in the energy sector in Germany can be categorized according to business type, as listed below:
- Manufacturer: companies actively involved in the production of energy; can include those in the bioenergy sector, fossil and hydro energy, solar energy and well as wind energy.
- Service provider: energy supply companies involved in planning and executing the supply strategy in Germany.
- Technology company: companies in the power plant engineering and construction and also suppliers of technologies for power plant contractors.
- Training providers: companies that offer consulting services, learning solutions, training for working in the energy sectors.
According to the Renewable Energy Sources Act, funding is in place for renewable energy installations. We recommend that investors in this energy sector check with the funding options as set forth by the Federal Ministry of Economic Affairs and Energy.
The requirements will differ according to the type of activity and the licensing process can be complex according to the type of energy provided.
Our team of company formation lawyers in Germany can provide you with complete assistance during the course of opening a company in the energy sector.
Germany’s energy transition is one that will allow for a more affordable, environmentally conscious and reliable energy supply. The legislative supports, as well as the investments in research, are key ingredients to the success of this transition and foreign investors can find that participation in the renewable energy sector can be an interesting business option.
Company incorporation for the purpose of starting a renewable energy business is a process that can be successfully handled with the help of our company formation lawyers in Germany. We can help investors regardless of the city or area in the country where they plan to make the investment and we can help with legal counseling starting with the pre-investment and pre-incorporation phase and well into the procedures needed to start and license this type of business.
The value-added tax is one of the primary taxes to take into account when setting up a business. VAT registration in Germany is generally mandatory for all resident companies and it is obligatory for non-resident companies that make taxable supplies of goods or services. Our team can give you more details about this tax and the registration steps upon request.
Feel free to contact our law firm in Germany for complete details about how we can assist investors who open a company in the energy sector.