Family office in GermanyOverview
German family offices grew out of the country's family-owned industrial base, and most still look like it: an operating group or the proceeds of its sale, held through a German partnership or company, managed by a small team of trusted professionals. There is no family office law, no licence category for family offices and no special tax status. The questions that matter are whether the office's activities fall inside the BaFin perimeter, which entity holds the wealth, and how that structure performs on a death, a gift or a move abroad.
On the regulatory side, discretionary management of financial instruments for others (Finanzportfolioverwaltung) and investment advice are investment services under the Investment Firm Act (WpIG), which require BaFin authorisation under § 15 WpIG. A single-family office that manages only assets belonging to its parent, subsidiaries or sister companies can rely on the intra-group exemption in § 3(1) No. 6 WpIG, and BaFin's administrative practice does not treat asset care within the closest family circle, without any market orientation, as a licensable business. Once the office serves several unrelated families, offers its services to outsiders or receives client mandates beyond the family, it moves into licensable territory. Unauthorised business is a criminal offence and can make contracts void, so the perimeter analysis is done before the first mandate is signed.
Pooled family vehicles are generally not investment funds. BaFin's interpretative letter on the scope of the KAGB and the term "Investmentvermögen" (14 June 2013, last amended 9 March 2015, ref. Q 31-Wp 2137-2013/0006) follows recital 7 of the AIFM Directive: a vehicle that invests the private wealth of a family — defined broadly to include spouses, registered partners, parents, siblings, children, grandchildren, nieces and nephews, aunts and uncles and first cousins — without raising capital from third parties does not "raise capital" and so is not an AIF. Admitting outside investors changes that.
Tax design is where German structures differ most. A GmbH pays corporate income tax of 15% plus the 5.5% solidarity surcharge and municipal trade tax, a combined burden of roughly 30% depending on the municipality. The rate will fall by one point a year from 2028 to 10% from 2032 under the investment programme law promulgated in July 2025. Under § 8b KStG, 95% of dividends from holdings of at least 10% and of gains on share disposals are effectively exempt. An asset-management GmbH & Co. KG, by contrast, can be structured as tax-transparent, with income taxed at the partners' level. Inheritance and gift tax (up to 50% between unrelated persons) and the relief for business assets under §§ 13a and 13b ErbStG often decide which design is chosen.
Key benefits
- Legal certainty from a codified civil and corporate law system, an experienced notarial profession and predictable courts
- A clearly mapped supervisory perimeter: intra-group and closest-family activity outside licensing, regulated MFOs inside it
- 95% effective exemption on qualifying dividends and share gains for corporate holding structures under § 8b KStG
- Inheritance and gift tax relief of 85% or, under stricter conditions, 100% for qualifying business assets
- No wealth tax has been levied since 1997
- Family pooling vehicles that keep voting power, transfer restrictions and exit terms inside a partnership agreement rather than a public register
- Access to the EU single market, a deep Mittelstand ecosystem and an extensive double tax treaty network
Requirements
- Perimeter analysis under the WpIG, KWG and KAGB before the office starts: who owns the assets, who decides, who is served and whether anyone outside the family is involved
- If services go beyond the group or closest family circle: a BaFin investment-firm licence under § 15 WpIG, with fit and proper managers, initial capital, a business plan and organisational requirements; or a trade licence under § 34h GewO where advice is limited to funds
- Formation of the holding entity by notarial deed and registration in the commercial register (Handelsregister); for a GbR acquiring real estate, registration in the partnership register introduced on 1 January 2024
- Effective place of management in Germany for corporate tax residence: German-resident managing directors and decisions actually taken in Germany
- Registration of beneficial owners in the Transparency Register under §§ 19–20 GwG; access for the public is limited to persons with a legitimate interest
- AML/CFT obligations under the GwG for an MFO or any obliged entity: risk assessment, customer due diligence, beneficial ownership verification and suspicious activity reporting to the FIU
- CRS and FATCA classification of each entity, with reporting through the Federal Central Tax Office (BZSt) where the entity qualifies as a reporting financial institution
- Bookkeeping, annual financial statements and publication in the company register; audit where size thresholds of the Commercial Code are exceeded
- Foundation-law requirements for a family foundation: recognition by the competent Land authority, a lasting purpose and adequate assets; the central foundation register is now scheduled to start on 1 January 2028
- Exit-tax planning under § 6 AStG for family members holding at least 1% of a company who plan to leave Germany
Structure designs
Asset-holding GmbH (family investment company)
EUR 25,000 share capital
Suits families that reinvest rather than distribute. Dividends and share gains are 95% exempt under § 8b KStG, so returns compound at corporate rates; tax on distributions to the family arises only when profits are paid out. Rental income can be shielded from trade tax under the extended reduction for real-estate-only companies.
GmbH & Co. KG as family holding
The classic German family partnership. A GmbH acts as general partner while family members hold limited partnership interests that can be gifted in tranches. Structured as asset-managing and tax-transparent, income is taxed at partner level; structured as commercial, it can hold operating groups and preserve business-asset status for inheritance tax relief.
Family pool (GbR or KG) with a separate family office GmbH
Separates ownership from management. The family pool holds the assets; a GmbH employs the family office team and provides services to the pool and family entities only, keeping it within the group exemption and isolating staff, liability and costs.
Family foundation (Familienstiftung)
Locks in a long-term ownership structure and prevents fragmentation of a family business. Contributions are subject to inheritance or gift tax, and a substitute inheritance tax is levied every 30 years on the foundation's assets. It suits families prioritising continuity over flexibility.
Combined structure with Austria, Liechtenstein or Switzerland
For families with members or assets across the German-speaking region, a German operating holding can sit alongside a Liechtenstein or Austrian foundation or a Swiss wealth manager. These combinations need careful testing under German controlled-foreign-company and foreign-foundation attribution rules (§§ 7–15 AStG).
Step-by-step process
- 1
Family and asset review
Map the family, the assets, existing holdings, residence and citizenship of each member and expected liquidity events such as a business sale or succession.
- 2
Perimeter and tax design
Determine whether the planned services stay inside the group and family exemptions, choose between corporate and transparent holding models and model inheritance tax, trade tax and exit tax consequences.
- 3
Formation and contribution
Notarise the articles or partnership agreement, register in the commercial or partnership register, open bank accounts and contribute assets, observing real estate transfer tax and gift tax on each step.
- 4
Governance documents
Adopt a family charter, partnership agreement clauses on transfers and exits, an investment policy, an investment committee and rules for the family office management company.
- 5
Regulatory filings
Register beneficial owners in the Transparency Register, classify entities for CRS and FATCA, and — where the office serves third parties — file the BaFin licence application.
- 6
Ongoing operation
Annual accounts and tax returns, gift tranches to the next generation, periodic review of the structure against changes in German tax law and in the family's residence.
Typical documents
- Passports and proof of address for founders, managing directors and beneficial owners
- Family tree and ownership chart down to the ultimate beneficial owners
- Source-of-wealth and source-of-funds evidence for contributed assets
- Notarised articles of association or partnership agreement
- Commercial register extracts for the holding entity and any corporate shareholders
- Tax identification numbers and CRS/FATCA self-certifications
- Family charter, investment policy and investment committee terms of reference
- Valuations of contributed businesses or real estate for gift and transfer tax
- For a licensed MFO: BaFin application, business plan, CVs and fit and proper documentation of managers
How Legal Wealth helps
Legal Wealth works with the family and its German tax advisers and notaries to design a structure that matches how the family actually owns, decides and plans to pass on its wealth. We map the BaFin perimeter before any services begin, compare corporate, partnership and foundation models against inheritance and exit tax scenarios, coordinate formation and Transparency Register filings, and align the German structure with assets and family members in other jurisdictions — discreetly and with compliance first.
Enquire with Legal WealthFrequently asked questions
Does a single-family office in Germany need a BaFin licence?
Usually not, if it manages only assets of its own group — relying on the exemption in § 3(1) No. 6 WpIG — or assists the closest family circle without any market orientation. It does need one if it provides discretionary portfolio management or investment advice to unrelated families or outside clients.
Is a family investment vehicle an AIF under the KAGB?
BaFin's interpretative letter on the scope of the KAGB treats vehicles investing the private wealth of a family, without raising capital from third parties, as outside the definition of an investment fund. Admitting non-family investors can bring the vehicle within the KAGB.
Which is better for a family holding: GmbH or GmbH & Co. KG?
A GmbH suits families that reinvest, because dividends and share gains are 95% exempt at corporate level. A transparent GmbH & Co. KG suits families that distribute income and want partner-level taxation and flexible gifting. Many families use both, with the choice driven by inheritance tax modelling.
How is a German family foundation taxed?
Assets contributed to a family foundation are subject to inheritance or gift tax. The foundation pays corporate tax on its income, and every 30 years a substitute inheritance tax is levied as if the assets passed to two children. Distributions are taxed in the beneficiaries' hands.
Is the beneficial ownership of a German holding public?
Beneficial owners must be registered in the Transparency Register. Since the 2022 judgment of the Court of Justice of the EU on public access, inspection is limited to authorities, obliged entities and persons who demonstrate a legitimate interest.
What happens if a family member leaves Germany?
Under § 6 AStG, a person who has been tax resident for the required period and holds at least 1% of a corporation can be taxed on unrealised gains on emigration, with payment by instalments available. Structures should be reviewed before any move.
Last reviewed: 2026-10. Requirements, fees and timelines change. Information is general, reviewed on the date shown, and is not legal or tax advice.
Sources
- Wertpapierinstitutsgesetz (WpIG) § 3 — Ausnahmen
- BaFin Auslegungsschreiben zum Anwendungsbereich des KAGB und zum Begriff des Investmentvermögens (Q 31-Wp 2137-2013/0006)
- Forvis Mazars — Gesetz für ein steuerliches Investitionssofortprogramm verkündet
- IHK Dresden — Einführung eines zentralen Stiftungsregisters verspätet sich
- FGS — Erlaubnispflichtiges Geschäft: Unterstützung bei der Vermögensverwaltung innerhalb der Familie
