How to Acquire a Company in Germany in 2026: FDI Filings, Merger Control & Works Council Risks

Understanding how to acquire a company in Germany requires navigating a regulatory environment that has shifted materially in 2026, particularly for cross-border buyers. Germany’s consolidated FDI Screening Act now bundles previously fragmented investment-review rules into a single statute, creating new filing triggers that catch minority stakes as low as 10 per cent of voting rights in sensitive sectors. Simultaneously, proposed increases to merger control thresholds at the Bundeskartellamt are altering when, and whether, a transaction must be notified. This buyer playbook walks general counsel, corporate development teams and private-equity sponsors through every compliance decision from structuring to post-closing integration, with practical checklists for FDI screening Germany filings, merger notifications and works council obligations in M&A Germany transactions.

Key Steps to Acquire a Company in Germany, Quick Overview

Before committing resources to any German target, buyers should map six critical decision points. Each one carries its own filing risk, timeline consequence and remedial exposure.

• Choose structure. Share purchase, asset purchase or shelf-GmbH acquisition, each has different liability, tax and works-council implications.
• Screen for FDI filing obligations. Determine whether the target operates in a sector subject to the Germany Investment Screening Act 2026 and whether voting-rights thresholds (10 %, 20 %, 25 %) are triggered.
• Check merger control thresholds Germany. Assess combined and individual turnover figures against Bundeskartellamt notification levels.
• Engage the works council early. Information and consultation duties under the Betriebsverfassungsgesetz (BetrVG) can delay signing or closing if mishandled.
• Run targeted due diligence. Prioritise employment liabilities, tax exposures, IP chain-of-title and regulatory permits.
• Manage closing conditions. Align FDI clearance, merger clearance and works-council consultation timelines to avoid a gap between signing and closing that erodes deal certainty.

Key red flags for cross-border buyers:

• Acquiring even a minority stake in defence, critical infrastructure or AI sectors without an FDI filing can result in the transaction being unwound.
• Failure to notify the Bundeskartellamt where thresholds are met risks fines and voidability.
• Overlooking works-council consultation rights can trigger injunctions that delay integration by months.

Step 1: Choose Your Transaction Structure, How to Buy a Company in Germany

The structural decision is the first compliance fork for anyone looking to buy a company in Germany. The choice between a share purchase, an asset purchase and, increasingly, the acquisition of a shelf GmbH determines which liabilities travel to the buyer, how employees are treated and which regulatory filings are triggered.

Share Purchase vs Asset Purchase, Comparison

Buying a GmbH, Notarisation, Handelsregister and Shelf Companies

Is it possible to buy a GmbH? Yes, and it is the most common acquisition structure in German mid-market M&A. The GmbH acquisition steps are straightforward in principle: the buyer and seller execute a share purchase agreement (SPA) before a German notary, who then files the change of ownership with the commercial register (Handelsregister). Registration typically takes two to four weeks after the notarised filing is submitted.

For buyers who need an immediate German vehicle, for example, to hold assets pending a larger carve-out, a shelf GmbH (Vorratsgesellschaft) can be purchased from specialised providers. Shelf companies are pre-incorporated entities with no trading history. The buyer acquires 100 per cent of the shares, appoints new management, renames the entity and begins operations. Notary and registration costs for a standard shelf-GmbH acquisition generally range from €1,500 to €3,500, excluding advisory fees. The minimum share capital for a GmbH remains €25,000, of which at least half must be paid up at incorporation.

Step 2: FDI Screening Germany, The Consolidated Investment Screening Act 2026

FDI screening Germany is the single most consequential regulatory gate for non-EU buyers in 2026. Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) now administers a consolidated FDI regime that replaces the previously scattered provisions of the Foreign Trade and Payments Act (AWG) and Foreign Trade and Payments Ordinance (AWV) with a unified Germany Investment Screening Act 2026. The practical effect for cross-border buyers is a broader scope of screened sectors, lower notification triggers and tighter timelines.

Which Sectors and Transactions Are Screened?

The consolidated act maintains two review tracks, a cross-sectoral review (applicable to any acquisition by a non-EU/EFTA buyer of 25 % or more voting rights) and a sector-specific review with lower thresholds for sensitive industries. The sector-specific track captures, among others:

Ownership and Voting-Rights Triggers

The graduated threshold system means that a buyer can trigger a mandatory filing obligation well before acquiring outright control. Industry observers expect the BMWK to scrutinise indirect acquisitions (through chain-of-entities structures) and to apply an “atypical control” test where contractual arrangements, such as veto rights over strategic decisions, confer influence equivalent to a shareholding above the applicable threshold. Buyers should map all voting rights, board-appointment rights and veto provisions in the target’s shareholders’ agreement against the relevant sector threshold before signing any term sheet.

Filing Timeline, Process and Interim Measures

Once a filing obligation is identified, the buyer must submit a notification to the BMWK. The ministry has two months to open a formal review after receiving a complete filing. If a formal review is opened, it must be completed within a further four months, extendable in complex cases. During the review period, the transaction may not close, the act imposes a statutory standstill. The BMWK may also impose interim measures such as appointing a trustee to exercise voting rights or restricting the buyer’s access to classified information held by the target.

Failure to file where required renders the transaction provisionally void. The ministry retains the power to prohibit a completed but unnotified acquisition retroactively, which can force an unwinding. The practical takeaway: map FDI screening obligations during the term-sheet stage and build the filing timeline into the SPA’s conditions-precedent schedule.

Step 3: Merger Control Thresholds Germany, 2026 Proposed Updates

Independent of FDI screening, cross-border buyers must assess whether the transaction triggers a merger-control filing with the Bundeskartellamt (Federal Cartel Office). The merger control thresholds Germany framework operates on a turnover-based system.

Current Thresholds and Proposed 2026 Changes

Under the Act against Restraints of Competition (GWB), a concentration must be notified to the Bundeskartellamt where the combined aggregate worldwide turnover of all undertakings concerned exceeds €500 million, at least one undertaking has domestic (German) turnover exceeding €50 million, and at least one other undertaking has domestic turnover exceeding €17.5 million. Proposals circulating in 2026 contemplate raising the second domestic-turnover threshold from €17.5 million to a higher figure to reduce filings for smaller transactions. Industry observers expect these adjustments, if adopted, to take effect in the next amendment cycle of the GWB, potentially narrowing the filing obligation for mid-market deals.

Timing, Standstill and Penalties

The Bundeskartellamt operates a two-phase review. Phase I lasts one month from receipt of a complete notification. If concerns arise, the authority may open a Phase II investigation lasting up to four additional months (extendable by one month if remedies are offered). A statutory standstill obligation prohibits closing before clearance. Completing a notifiable transaction without prior clearance can result in fines and the transaction may be declared void.

Merger Control Thresholds, Germany vs EU vs Selected Jurisdictions

Buyers should note that a transaction may be notifiable in Germany even where it falls below EU thresholds, because the German domestic-turnover figures are significantly lower. Parallel filings in multiple jurisdictions are common in cross-border deals, and the timelines must be coordinated to avoid a closing-date mismatch.

Step 4: Works Council & Employment Risks in German M&A

Works council obligations in M&A Germany transactions are among the most underestimated deal risks for foreign buyers. The Betriebsverfassungsgesetz (BetrVG) grants works councils (Betriebsräte) extensive information and consultation rights that, if mishandled, can delay or derail post-signing integration.

When Must the Works Council Be Informed?

Under §§ 111–113 BetrVG, the employer must inform the works council “in full and in good time” about any planned operational change (Betriebsänderung), a category that covers mergers, acquisitions, plant closures, material staffing reductions and fundamental changes to work organisation. The obligation arises when the decision is sufficiently concrete to be communicated, which in M&A practice typically means between signing and closing. Failing to consult before implementing changes can give rise to claims for a social plan (Sozialplan) and, in extreme cases, an injunction preventing integration steps.

Transfer of Undertakings and Collective Redundancies

Where an acquisition, whether structured as a share or asset deal, involves the transfer of an identifiable business unit, § 613a of the German Civil Code (BGB) mandates the automatic transfer of all employment contracts to the buyer. Employees must be notified in writing, and each employee retains a one-month objection right. If a buyer plans post-closing redundancies, the collective-redundancy notification requirements under the Kündigungsschutzgesetz (Protection Against Dismissal Act) apply, including mandatory notification to the local employment agency (Agentur für Arbeit) before any terminations take effect.

Practical Negotiating Levers for Buyers

Experienced buyers address works-council risk through the transaction documentation itself. Warranties and indemnities should cover the seller’s compliance with works-council consultation obligations prior to closing. HR schedules attached to the SPA should list all employees, their contract terms, works-council agreements and pending disputes. Buyers can also negotiate a closing condition requiring the seller to deliver evidence that the works council has been properly informed.

Works council & employee risk checklist:

• Pre-sign. Identify whether a works council exists at each target entity; review existing works-council agreements (Betriebsvereinbarungen) and social plans.
• Pre-close. Ensure the seller notifies the works council of the planned operational change; confirm § 613a notification letters are prepared; assess collective-redundancy exposure.
• Post-close. Negotiate a reconciliation-of-interests agreement (Interessenausgleich) if integration involves material restructuring; monitor employee objection rights and manage talent-retention measures.

Foreign buyers should also note that German law does not restrict foreign nationals from establishing or managing companies in Germany. There is no citizenship or residency requirement for GmbH shareholders or managing directors, although at least one managing director must have an address within the European Economic Area for service-of-process purposes.

Step 5: Due Diligence and Deal Mechanics for German M&A

Due diligence Germany M&A follows a pattern familiar to cross-border practitioners, but several local specificities can catch foreign buyers off guard.

Priority Items and Legal Red Flags

• Employment and pensions. Review all employment contracts, works-council agreements, pension commitments (Direktzusagen) and any outstanding social-plan obligations.
• Tax. Assess corporate income tax (Körperschaftsteuer), trade tax (Gewerbesteuer) and VAT compliance. Check for tax-loss carry-forwards that may be restricted post-acquisition under the change-of-ownership rules (§ 8c KStG).
• IP. Verify registration, ownership chain and employee-invention claims under the Employee Inventions Act (Arbeitnehmererfindungsgesetz).
• Regulatory permits. Confirm that operating licences, environmental permits and sector-specific authorisations transfer on a change of control or are re-issuable.
• Real property. Review land-register extracts (Grundbuch) for encumbrances, pre-emption rights and building-law restrictions.

Data Room and Local Practicalities

Virtual data rooms are standard in German M&A. Sellers typically populate the room with corporate documents, financial statements (HGB and, if available, IFRS), material contracts, employee lists (often anonymised until an advanced stage), insurance policies and litigation files. Buyers should insist on receiving certified copies of all Handelsregister extracts and shareholder lists, as these are the definitive evidence of share ownership.

GmbH Acquisition Steps, Micro-Flow

The GmbH acquisition steps from signed term sheet to closing typically follow this sequence:

1. Execute a binding letter of intent or term sheet (not notarised).
2. Conduct confirmatory due diligence.
3. Negotiate and finalise the SPA.
4. Notarise the SPA before a German notary (mandatory for GmbH share transfers under § 15 GmbHG).
5. Fulfil conditions precedent (FDI clearance, merger clearance, works-council consultation).
6. Close, transfer purchase price, update the shareholder list with the notary, file updated list with the Handelsregister.

Step 6: Closing, Conditions Precedent & Post-Deal Integration

Typical Conditions Precedent

Most German SPAs condition closing on receipt of FDI clearance (or expiry of the review period without prohibition), merger-control clearance from the Bundeskartellamt, third-party and change-of-control consents under material contracts, and, increasingly, confirmation that works-council information obligations have been satisfied. Escrow arrangements or purchase-price holdbacks are common to cover warranty claims and pending tax assessments.

Post-Closing Integration and Works Council Follow-Up

After closing, the buyer must register the new shareholder list with the Handelsregister, appoint or confirm managing directors and update beneficial-ownership filings with the Transparency Register (Transparenzregister). Where integration involves restructuring, site consolidation, headcount changes, systems migration, the buyer will need to negotiate a reconciliation-of-interests agreement and, where applicable, a social plan with the works council. Early engagement with the Betriebsrat at this stage significantly reduces the risk of injunctions and protracted negotiations that delay synergy realisation.

Practical Tools: Timelines, Decision Tree & Checklists for Buyers

Coordinating three parallel regulatory and employee-relations workstreams is the defining challenge of any cross-border acquisition in Germany. The combined timeline below illustrates how FDI screening, merger control and works-council consultation interact with a typical deal schedule.

Indicative combined timeline:

• Weeks 1–4 (post-signing). File FDI notification with BMWK; submit merger-control notification to Bundeskartellamt; seller initiates works-council information process.
• Weeks 5–8. Bundeskartellamt Phase I review period (one month); BMWK preliminary assessment; works-council consultation ongoing.
• Weeks 9–16. If Phase II merger review is opened, an additional four months may be required; FDI formal review (up to four months if opened); works-council negotiations on social plan or reconciliation of interests.
• Closing. Achievable within 8–12 weeks in straightforward cases; complex FDI or Phase II merger cases may extend the timeline to 6–9 months.

Reporting Obligations by Entity Type

Conclusion

Knowing how to acquire a company in Germany in 2026 means mastering three interlocking compliance gates, FDI screening, merger control and works-council engagement, while managing the structural and tax consequences of the chosen deal form. The consolidated Germany Investment Screening Act 2026 has broadened the reach of FDI review, proposed merger-control threshold adjustments may reshape filing obligations, and the BetrVG continues to grant works councils formidable information and consultation rights that can reshape deal timelines. Buyers who map these obligations at the term-sheet stage, build realistic clearance timelines into the SPA and engage experienced German counsel early will materially reduce execution risk and protect deal value.

This article provides general information only and does not constitute legal advice. Regulatory thresholds and legislative proposals referenced are current as of the date of publication and may change. Readers should consult qualified legal counsel for advice tailored to their specific transaction. Last reviewed: 11 June 2026.

Sources

1. Bundeskartellamt (German Federal Cartel Office)
2. Federal Ministry for Economic Affairs and Climate Action (BMWK)
3. Federal Office for Economic Affairs and Export Control (BAFA)
4. Works Constitution Act (Betriebsverfassungsgesetz, BetrVG)
5. GmbH Act (GmbHG), Gesetze im Internet
6. Bundesministerium der Justiz, Gesetze im Internet
7. BMWK, English-language FDI policy pages
8. Handelsregister (German Commercial Register)
9. Bundesanzeiger (Federal Gazette)
10. Germany Trade & Invest (GTAI)