March 2022

External growth is one of the quickest ways, for SMEs to grow their business and expand their operations (activities, services, clients) abroad. However, a Merger & Acquisition process faces many challenges, especially in an international
context.

5 prerequisites are critical, before beginning your M&A operation in Germany.

Integrate external growth into your development strategy

/ External VS Organic growth: Define the best way to enter a new country, new market. External growth strategies (M&A or Strategic alliances), can be quicker in most cases, but preliminary analysis is mandatory before launching a full process. It can lead to value loss if not done correctly.

/ Verify your financing capacity (level of Enterprise Value) to assess the size of the target you can aim for.

Appoint a Project Manager

/ Name a Project Manager within your organization that will be the link between all the parties involved in the M&A operation (advisors, targets, banks, etc.)

/ Depending on the size of the project, define the scope of responsibilities of each member involved in the project. 

In Germany: It may take some time to get initial feedback from the German targets, but once the interest of a target has been validated, it is important to be reactive and to be able to introduce the same people to the Germans, to ensure a good follow-up throughout the mission.

Define the ideal target

/ Define the company size (employee, revenue/EBITDA, balance sheet.)

/ Define the activity / services / products / sectors / clients

/ Define the geographical scope (region, country)

/ Define the other criteria (type of ownership, type of acquisition, type of clients, management team, etc.)

Adapt to cultural differences

/ Approach the potential targets: The first approach in the M&A operation is always complicated as we do not know if the targets are ready to sell their companies or open to sharing information. The idea is to create the opportunity. Each approach must adapt to cultural specificities to maximize the chances of opening the door and getting information.

In Germany: Our local teams approach the targets directly by phone and organize the first meeting in German to discuss your company and your objectives and those of the targets. The first approach in German allows to reassure the interlocutors a little and allows first fluid exchanges.

 

/ Negotiation phase and the M&A process: Adapting to cultural differences is key: respect the agenda/calendar, communicate clearly, do not rush, and communicate in advance, if changes any.

In Germany especially: Your presentations and arguments have to be explicit. well-founded, short, straight to the point, instructive and technical during exchanges. The relationship is not limited to meetings: make sure you stick to the schedule and if you have to cancel or postpone a meeting or a call, let your contact know well in advance and agree on a new date.

 

/ In the post-deal integration: Put in place a planning and a project manager to run properly the integration. Decide to change branding (depending on the market), decide to mutualize tools (IT, finance, HR, etc.).

Specify the schedule & prepare your documents

/ Define the planning of the M&A operation for the main steps: Duration of each step (2 months for the screening, 2-3 months for the approach phase, 4 months for Due Diligence, etc.). It’s mandatory to be structured and plan.

/ Adapt to the agenda/calendar of each target (might be quicker than expected if the target is in an active sale process/longer if the target is initially not ready to sell).

/ A M&A operation requires a large number of documents. You need to prepare the following:

• The Letter of Intent (LOI): A document outlining an agreement between two or more parties before the agreement is finalized.
• Data rooms (online data room): running a data room process requires gathering confidential documents that third parties (lawyers, investment banks, chartered accountants, etc.) may then access more easily during the process
• Due diligence: the process through which a potential acquirer evaluates a target company or its assets for an acquisition. The relevant areas of concern may include the financial, legal, labor, tax, IT, environment, and market/commercial situation of the company.
• After due diligence is completed, the parties may proceed to draw up a Definitive Agreement, known as a “merger
  agreement,” “share purchase agreement” or “asset purchase agreement” depending on the structure of the transaction.

Looking to move into Germany?

Contact us

December 2021

Today, Murielle Taisne, Managing Director at Altios Germany, is giving you the keys to a successful talent acquisition in Germany!

December 2021

The establishment of a subsidiary is the preferred way to set up a company in Germany, as it is a genuine, legally independent company under German law.
It is the most advanced form of establishment for carrying out the economic activity with a strong grip on the German market, due to the fact that it has a legal structure that the Germans know, and which reassures them.

Here are the 7 steps we have compiled to help you set up your subsidiary in Germany:

1) Getting an address/ business domiciliation in Germany

The first thing to do is to have an address or a business domiciliation in Germany, before taking any steps in the country, to be able to start the process of creating a subsidiary.

2) Selecting the right legal form

Here are the main types of companies in Germany:

– Gesellschaft mit beschränkter Haftung (GmbH): Limited Liability Company: This is the most widely used legal form for corporations. Here, the shareholders are not personally liable for the debts of the company. It does require €25,000 of startup capital, however, €12,500 of which must be present at the registration stage.
– Aktiengesellschaft (AG): Stock Corporation: It requires at least five founding shareholders and operates through a board of directors (Vorstand), which makes mutual decisions. The AG comes into existence upon registration in the commercial register (Handelsregister). The application must be signed by the founding shareholders, the members of the supervisory board, and the management board before a notary. In addition, an AG must be registered with the local trade office (Gewerbe- oder Ordnungsamt).
– Offene Handelsgesellschaft (oHG): General Commercial Partnership: This is the classic partnership form for small and medium-sized enterprises (SMEs). In order to establish an oHG, two or more partners must conclude a partnership agreement, who are all jointly and severally liable for the oHG’s debts and liabilities. The oHG must be entered in the commercial register and registered with the local trade office.
– Kommanditgesellschaft (KG): Limited partnership: It is a legal form related to the oHG, but with the option of limiting the liability of some of the partners. A KG is established when a partnership agreement between two or more partners (including at least one limited and one unlimited partner) is concluded and exists once it has been entered in the commercial register.
– GmbH & Co. KG: a limited partnership (KG) in which the general partner (Komplementär) is a limited liability company (GmbH): The GmbH & Co.KG is established through the conclusion of a partnership agreement between the general partner and the limited partners.
– Tochtergesellschaft: Subsidiary: These are companies separate from their parent company, with a certain autonomy, without being independent. These companies have their own management.
– Zweigniederlassung: Branche: These are dependent companies with a central administration. Subsidiaries and branches are different and must be noted differently in the commercial register

3) Confirm the name of your company with the commercial register (Unternehmensregister)

You must make sure that you can use the name of the company you want. Thanks to the Unternehmensregister website, you can easily and quickly search for already registered company names and check that yours is unique.

4) Open a bank account

You must then open your own bank account in Germany. Opening a bank account does not involve a lot of red tapes, as it is done in accordance with standard international practice. Many German banks allow you to set up accounts online, which means you can do this step remotely – but be aware that most bank websites will be entirely in German. Make sure you provide proof of your identity – this can be done at your local post office, or you can ask a notary or lawyer to help you check your identity.
You can also make your request by going to the bank in person. In this case, you or your representative may be asked to present your passport or identity card, as well as a Meldebescheinigung (“certificate of registration” – your proof of residence in Germany).

5) Provide the necessary documents for setting up a business

The legal form of the company determines the necessary documents and evidence. In all cases, the following administrative formalities must be carried out:

– A declaration of existence must be made to the Gewerbeamt for the creation of any commercial or industrial exploitation.
– A declaration to the tax authorities (Finanzamt)
– A declaration to the competent Statistische Landesamt
– A declaration to the Labour Office (Arbeitsamt) if employees are hired.
– A declaration to the Social Security bodies and the relevant professional association (Berufsgenossenschaft)
– Registration with the professional chamber to which the company belongs

It should be noted that there are certain sectors of activity in Germany for which specific authorization is required (e.g. transports, estate agencies, surveillance companies, etc.). The Gewerbeamt is likely to indicate any additional steps to be taken.

6) Registration in the Commercial Register of the lower regional court (Amtsgericht)

Next step: Your entry in the Commercial Register of the lower regional court (Amtsgericht).
You must submit your documents to the Commercial Register through the notary. If the essential information about your registered company (company name and registered office, authorized representatives, legal form, as well as share capital or shares) is accepted, your new company will be published on the Handelsregister website.

7) Registering with the tax office

The final step is to register your new business with the local tax office within four weeks of opening and within one month of certification of the articles of association by a notary.

You now know the key steps to setting up your subsidiary!

ALTIOS is always at your disposal to guide you through all the steps involved in setting up a new German company or expanding an existing one. We will be happy to put you in contact with the appropriate lawyers, tax advisors, attorneys, and other experts needed to realize your investment project.
Please do not hesitate to call us on +49 (0)69 24 74 102 – 14 or contact us via the website https://altios.com/ for help and advice.

ALTIOS: 30 years old, an international success story

ALTIOS is the story of a passion for international business and the meeting of 5 personalities.

Founded in Sydney in 1991 by Bruno Mascart, Altios’ mission was initially to support European companies looking to set up in Australia. Over the years, Bruno was joined by David Gerard, Patrick Ferron, Boris Lechevalier and finally Klaus Maier, each one contributing to the Corporate DNA.

Altios’ journey

ALTIOS’ services have evolved considerably over the last few years to go beyond traditional marketing and sales assistance services. Today, the group offers real expertise integrating all the internationalization solutions enabling companies to expand at each stage of their growth on a market.

As a leading international advisory firm for Small and Mid-Cap companies expanding in the G30, Altios records:
/ + 10,500 carried out projects
/ + 2,000 managed employees
/ + 1,700 created subsidiaries
/ + 750 employees
/ 22 locations spread over the largest markets
/ 4 solutions adapted to each stage of #internationalization: Strategy, Development, Implementation & Investment

Read more about Altios’ story by downloading our press release!

Press Release – ALTIOS: 30 years old, an international success story

Download

23 aprile 2020

Deutschland ist seit langem ein wichtiger Wirtschaftsstandort als größte Volkswirtschaft Europas und viertgrößte der Welt. Das Land mit 82 Millionen Einwohnern und rund 4,5% Arbeitslosigkeit bietet Stabilität, eine qualitativ hochwertige Infrastruktur, einen Pool an Talenten und eine offene Geschäftspolitik. Dies macht Deutschland zu einem willkommenen Standort für Unternehmer, die expandieren wollen, aber der gleiche hohe Standard trägt zum Wettbewerb bei. Wer in Deutschland Geschäfte machen will, sollte bereit sein, neue und innovative Produkte und Lösungen anzubieten, um sich in dieser Kraftwerkswirtschaft hervorzuheben.

Im Jahr 2017 entfiel nach Angaben des IWF mehr als ein
Viertel der Wirtschaft des Euroraums auf Deutschland. Das robuste Wachstum des Landes
hat Chancen in einigen der innovativsten Branchen wie Biotechnologie,
Elektrofahrzeuge und Verkehr, umweltfreundliche Technologien und digitale
Transformationsdienste sowie Lifestyle-Produkte wie Lebensmittel und Kosmetika
eröffnet. Bei einer nahezu vollen Beschäftigungsquote können Verbraucher und
Unternehmer gleichermaßen wählerisch sein, wo sie ihr Geld ausgeben.  Im Spiegel der weltweiten Verbrauchertrends
überlegen die Käufer, ob die Werte eines Unternehmens mit ihren eigenen
übereinstimmen, wenn sie Kaufentscheidungen treffen. Kundenservice und
Kundenbeziehungen sind seit langem, Werte der deutschen Kultur, die durch den
Wettbewerbsmarkt nur noch verstärkt werden.

“Die Deutschen sind sehr diszipliniert und fast
starr in ihren Geschäftsmethoden, die Kontakte sind direkt, wenn man einen
Termin hat, muss man sehr schnell reagieren”, sagte Murielle Taisne,
Altios Germany Director. Altios unterstützt Kunden bei der Navigation durch
diese lokalen Gepflogenheiten und bei der Erstellung einer Einstiegsstrategie.
Deutschland bietet eine recht unternehmensfreundliche Politik und Gesetzgebung,
aber es gibt immer noch die Tendenz zu lokalen Unternehmen, wie in den meisten
Ländern. In einem engen Markt ist es wichtig, diese Verbindungen zu haben oder
von einem Deutschen begleitet zu werden, der die Unternehmenskultur kennt.

Der Aufbau dieses lokalen Netzwerks und die
Bereitstellung lokaler Talente für Ihr Unternehmen ist ein wichtiger erster
Schritt. Aufgrund der niedrigen Arbeitslosenquote ist der Wettbewerb um
Top-Talente hoch. Unternehmen bieten In-Office Vergünstigungen,
familienfreundliche Leistungen, flexible und Work-from-Home-Versicherungen und
andere attraktive Leistungen an, um sich von anderen abzuheben. Dieses Employer
Branding ist wichtig für Unternehmen, um zu verstehen, was für die Deutschen am
wichtigsten ist. Neben der Beratung von Unternehmen bei ihrem
Mitarbeiterangebot gehen die Dienstleistungen von Altios über die Rekrutierung
hinaus und kommen sowohl dem Arbeitnehmer als auch dem Arbeitgeber während der
Übergangszeit zugute. Dies kann ein Unternehmen für einen Kandidaten, der Wert
auf einen reibungslosen Onboarding-Prozess legt, und einen Partner, der seine
langfristigen Ziele stets im Blick hat, auszeichnen.

Obwohl der Wettbewerb um Top-Talente eine Herausforderung
sein kann, ist Deutschland bestrebt, den bundesweiten Talentpool im STEM- oder
MINT-Sektor (Mathematik, Informatik, Technik, Naturwissenschaften), wie er
lokal bekannt ist, weiter zu verbessern. Die Programme, die sich insbesondere
an Studierende und Frauen richten, werden dazu beitragen, eine Verlangsamung
der Geschäftsdynamik aufgrund von Fachkräftemangel zu verhindern. Diese
Regierungspolitik mit Blick auf die Fähigkeiten und Dienstleistungen der
Zukunft bietet viele interessante Möglichkeiten für wachsende Unternehmen.

“In Deutschland muss man hartnäckig, geduldig, gut
vorbereitet sein, die Qualität von Produkten und Dienstleistungen
perfektionieren und schnell reagieren”, sagte Taisne.

Neben diesen Schlüsselerfolgsfaktoren schätzt Deutschland
Kreativität und Agilität und ist damit perfekt für KMUs und Start-ups geeignet.
Altios hilft seinen Kunden, ihre Innovationen zu präsentieren, mit der Unterstützung
eines langjährigen Partners. Der Wettbewerb der deutschen Wirtschaft birgt zwar
Risiken, aber diejenigen, die bereit sind, über das hinauszugehen und mit einem
umfassenden Verständnis der Anforderungen in den Markt einzusteigen, werden in
der gesamten Region davon profitieren.

April 3rd, 2020

COVID-19 is affecting every part of the world including our society and businesses.
This unprecedented time is presenting challenges that many of us never faced nor considered before.

Nobody is exempt from these challenges and you probably have plenty of unanswered questions such as:

-> Can I make my Italian subsidiary dormant for a year?
-> Is it the right time to look at acquisition opportunities in the U.S.?
-> How can I reactivate & secure my distribution in China while the country is recovering from lockdown?
-> What are the unemployment benefit mechanisms available in Spain and am I eligible?
-> Can I realistically manage a branch office without employees in India?
-> How do I benefit from local government incentives in Germany?
-> Are there any specific financial aids and loans available locally to address cash flow issues? Is the tax deadline extended due to the current coronavirus situation?
-> What about the access to health insurance for my employees, should they contract COVID-19?
-> How to stay connected to your prospects and clients in India, Europe, Asia and in the Americas?
-> How can I best prepare for the aftermath? What are the post-crisis perspectives?

Our global team of experts in our 28 offices around the world can help you get an answer to these questions and tackle these points by sharing constructive and valuable answers and advice. We are monitoring the news 24/7 and the information issued by local authorities all around the world.

If you are interested in exploring and potentially benefiting from these new incentives, our team can help you assess your eligibility and gather all the required information, and complete/submit the appropriate documentation and forms in a timely manner.

We are trying our best to assist you during this unprecedented time. We all need to think about how we can continue to build the future for our people and businesses.

Please feel free to reach out for any assistance.

Contact us at GlobalHelpDesk@altios.com

Stay safe,

The Altios Teams