GmbH Capital Increase 2026: Share Capital, Notary Process and Tax Impact in Germany

Want to bring in new investors, convert your UG into a full GmbH, or simply strengthen your company's equity? In 2026, a capital increase (Kapitalerhöhung) is the standard German instrument for all three. This guide walks you through the three types, the five-step process, the costs, the role of an agio, and the tax effects on both the GmbH and its shareholders.

At a glance

• A capital increase raises the registered share capital (Stammkapital) of your GmbH or UG (§§ 55–57 GmbHG).
• There are three types: cash capital increase, capital increase in kind, and capital increase from company funds.
• Every regular capital increase needs a shareholder resolution with 75% of the votes, a notarial recording, and entry in the commercial register. Only the entry makes it legally effective.
• Costs: notary and court usually between around €380 and over €1,000, depending on the transaction value. Both are deductible business expenses.
• If an investor pays more than the nominal value, the surplus goes into the capital reserve as an agio, not into share capital.

What is a capital increase?

A Kapitalerhöhung raises the share capital (Stammkapital) of your GmbH or UG that is registered in the commercial register (Handelsregister). It is governed by §§ 55–57 GmbHG. Typical triggers:

• Onboarding new shareholders, for example an investor taking equity.
• Funding growth, new hires, or large capital expenditure.
• Converting a UG into a full GmbH once the €25,000 minimum capital is reached (see UG to GmbH conversion).
• Improving creditworthiness with banks, suppliers and grant providers.

One distinction matters: a capital increase changes the subscribed capital, meaning the liability figure entered in the register. A mere payment into the capital reserve or a shareholder loan does not (more on this under GmbH equity structure).

Three types of capital increase

Cash capital increase. Shareholders pay fresh money into the company bank account. The most common and simplest variant.

Capital increase in kind (Sacheinlage). Contribution of assets such as machinery, IP, or equity stakes. Hidden reserves are typically disclosed for tax purposes, unless the Reorganization Tax Act (Umwandlungssteuergesetz) allows book values to be carried forward.

Capital increase from company funds. Free reserves and retained earnings are converted into share capital. No new money required, but an audited cut-off balance sheet is.

The 5-step process

1. Shareholder resolution passed with at least 75% of the votes cast (§ 53 Abs. 2 GmbHG).
2. Notarial recording of the resolution and the subscription declarations of any new shareholders.
3. Payment into the company account: for cash contributions at least 25% per new share, but never below half the new minimum capital. UG shareholders must pay 100% upfront.
4. Filing with the commercial register by the managing director, including proof of payment and an updated shareholder list.
5. Entry by the register court. The capital increase only becomes legally effective on registration.

Agio and capital reserve: when an investor comes in

In a funding round, an investor usually subscribes a small nominal amount but pays in far more, because your GmbH is worth more than its share capital. The premium above the nominal value is called an agio (Aufgeld) and flows not into share capital but into the capital reserve (§ 272 Abs. 2 HGB).

An example: an investor is to receive 10% of your GmbH for €100,000. At a pre-money valuation of €900,000, the share capital is raised by only €2,778 (the nominal amount of their new share); the remaining roughly €97,000 goes into the capital reserve as an agio. The capital increase stays lean, the investor still gets their equity stake, and your subscribed capital grows only marginally.

For the notary fee this is no trick: the notary calculates the transaction value on the economic value of the new shares, agio included (confirmed by the Federal Court of Justice, ruling II ZB 3/24). In the example that would be €100,000, not €2,778.

Authorized capital: increasing without a notary each time

If you are planning several rounds or an employee share program, look at authorized capital (genehmigtes Kapital, § 55a GmbHG). The shareholders empower the managing director in the articles of association to raise the share capital up to a fixed amount within a maximum of five years, without a fresh notarized shareholder resolution for each individual increase.

The limits: the nominal amount of the authorized capital may not exceed half of the share capital existing at the time of the authorization. Actually drawing on it then only has to be filed with the commercial register. For fast, recurring capital measures this saves time and recording fees.

How much does a capital increase cost?

Notary fees follow the GNotKG and scale with the transaction value (Geschäftswert). That value is not automatically the nominal amount of the increase: it is based on the economic value of the measure (including agio and the value of any contribution in kind), but at least €30,000 (§ 105 GNotKG). Even an increase of €5,000 is therefore billed on a €30,000 transaction value.

On that value, the notarial recording of the resolution is usually charged at a 2.0 fee (KV 21100 GNotKG), the filing with the commercial register at a 0.5 fee. Add the court fee for entry of around €70. Rough guide:

On top of the notary fees comes 19% VAT; the register court fee is VAT-exempt. Optional tax or legal advice adds to this. Both cost blocks are deductible business expenses for the GmbH, the same logic we covered in the article on GmbH incorporation costs.

How long does a capital increase take?

The notary appointment itself is done in a day. The critical factor is the register court's processing time: from filing to entry, most cases take one to four weeks, depending on the local court's workload. Until the entry is made, the increase is not effective, so the subscribed capital formally stays unchanged. Build in this buffer if a funding round has to close by a fixed date.

Tax effects on the company and its shareholders

At company level a capital increase is generally tax-neutral. With contributions in kind you can carry forward book values if the Reorganization Tax Act applies, otherwise hidden reserves are realized and taxed.

At shareholder level cash contributions and any agio paid are not separate acquisition costs of newly issued shares; they increase the acquisition costs of the existing stake. That reduces a future capital gain under § 17 EStG (or § 8b KStG for holding companies). On the balance sheet, equity moves from reserves or new cash into subscribed capital, see GmbH equity structure for the detail.

Special case UG: mandatory reserve and step-up to GmbH

A UG (haftungsbeschränkt) must allocate 25% of annual profits to a statutory reserve each year (§ 5a Abs. 3 GmbHG). Once that reserve plus the share capital reaches €25,000, you can run a capital increase from company funds and re-register the UG as a GmbH. The mandatory reserve then drops away, see UG to GmbH conversion.

Common mistakes

• Skipping the notary: a plain written resolution is not enough.
• Paying cash before the notarial recording: pre-payments can jeopardise registration.
• Contributions in kind without a valuation report: risk of make-good liability under § 9 GmbHG.
• Booking the agio as share capital instead of into the capital reserve.
• Forgetting to update the Transparenzregister and the tax office after registration.

Frequently asked questions

Does every capital increase need a notary? Yes. The increase resolution and the subscription declarations must be notarized (§ 53 GmbHG). The exception is drawing on authorized capital: here filing with the register is enough, because the authorization already sits in the articles of association.

Can I raise share capital without fresh money? Yes, via a capital increase from company funds. Free reserves or retained earnings are converted into subscribed capital. The condition is an audited cut-off balance sheet showing the available funds.

What is the difference between share capital and the capital reserve? Share capital is the nominal amount entered in the commercial register and serves as the liability figure. The capital reserve holds amounts shareholders pay in above the nominal value (agio). Both count as equity, but only share capital is visible in the register.

What approval threshold do I need? At least 75% of the votes cast in the shareholders' meeting, because a capital increase amends the articles (§ 53 Abs. 2 GmbHG). The articles may require a higher majority.

When does the increase become effective? Only on entry in the commercial register. Until then the old share capital still applies, even if the resolution and payment are already in place.

Bottom line

A capital increase is an established but highly formal process. Follow the five steps, budget for notary and court fees by transaction value, and decide in advance whether cash, in-kind or reserve conversion fits your strategy. When an investor comes in, the agio is what steers how much your subscribed capital actually grows. For the bookkeeping side, Norman keeps equity movements GoBD-compliant and lets you file the GmbH tax return without a tax advisor.