You hold shares in a GmbH and would like to move abroad. That works, and with some lead time it is easy to plan. For such shareholdings, Germany treats the move like a sale and taxes the growth in value up to that point. That noticeably slows down entrepreneurs who want to move. If you know this early, you can shape the valuation, the payment route and the timing yourself.
This article explains who exit taxation concerns, how it is calculated and what relief is available. And it sets out the sequence that lets you carry out the move calmly.
Who exit taxation concerns
The rule applies to shares in corporations in which you held at least 1% at some point in the last five years. These are mainly the GmbH, UG and AG. Foreign companies count too if, by German standards, they correspond to a corporation. That is checked by the entity comparison (Typenvergleich).
In addition, you must have had unlimited tax liability in Germany for at least seven of the last twelve years (section 6 AStG). If you hold no such shares, for example as a freelancer, sole trader or employee, the rule does not concern you. For many people who emigrate, the topic is settled at this point.
In short: the rule concerns shareholders with a stake of 1% or more who have lived in Germany for a long time.
How the tax is calculated
The law treats you as if you had sold your shares on the day you leave. The price is the market value, meaning the amount an unrelated buyer would pay. You deduct your acquisition costs, which for a GmbH you founded yourself are usually the share capital and later contributions.
Of the gain, 60% is taxable and 40% stays tax-free (section 3 no. 40 EStG). It is taxed at your personal rate. Because no purchase price flows on departure, there are two forms of relief: instalments and the return rule. Both are described below.
In short: the tax is on the growth in value up to departure, and on 60% of it.
Valuation: your biggest lever
How high the tax turns out depends above all on the value of your shares. If there has been no recent sale to third parties, the tax office estimates the value from the earnings prospects (section 11 BewG). It often uses a simplified method based on the profits of the last three years.
This is where you have room to shape the outcome. A valuation report can support a lower value, for example if the business depends heavily on you personally. Timing also matters, because the latest annual results feed into the calculation. Have the value determined before the move, and all options stay open.
Changing the structure before the move goes further still. If you hold no covered shares as private assets on the day you leave, you pay no exit tax. How that works with a GmbH & Co. KG, a family foundation or a liquidation is shown in Avoiding exit tax.
In short: an early valuation shows the tax, and a suitable structure can avoid it altogether.
Instalments and the return rule
On application you pay the tax in seven equal annual instalments, without interest (section 6(4) AStG). The tax office usually asks for security, such as a bank guarantee or a pledge of the shares. The relief applies to every destination, inside and outside the EU (as of 09/2026).
While the instalments run, you report your address once a year and confirm that you still hold the shares. If you sell the shares, distribute more than a quarter of their value, file for insolvency or miss an instalment or the annual report, the remainder falls due.
The return rule is interesting for anyone who wants to keep the option of coming back. If you become subject to unlimited German tax liability again within seven years and still hold the shares, the tax is cancelled. Until then the distribution limit of a quarter of the value applies. On application the period can be extended by up to five years. Put your intention to return briefly in writing when you leave.
In short: seven interest-free instalments make the tax plannable, and if you return you end up paying nothing.
The new company: form it after the move
Exit taxation covers shareholdings you hold when you leave. A company you only form after the move is not affected. Its value is built while you live abroad.
For location-independent entrepreneurs, the US LLC is the most flexible solution for this. It is transparent for US income tax, is usually not taxed in the United States without US business activity and follows your residence for tax purposes (USA country page). It fits especially well if you have no fixed tax residence or live in a country without income tax on this income. If you move within the EU, form the company at your new home, for example a Ltd in Cyprus.
In short: whatever you form after the move is untouched by exit taxation.
Austria and Switzerland
Austria has a comparable rule for capital assets (section 27(6) EStG 1988). If an individual moves to an EU or EEA state, Austria assesses the tax on application only when an actual sale happens. On a move to a third country, it is assessed on departure.
At federal level, Switzerland levies no exit tax on privately held shareholdings. Private capital gains are tax-free there. A Swiss fiduciary adviser clarifies business assets, cantonal rules and pension assets.
In short: Austria defers the tax on a move within the EU; Switzerland has no federal exit tax.
The sequence in six steps
- List your shareholdings, including indirect and foreign ones.
- Have the value determined, with a valuation report if needed.
- Check with your tax adviser which structure avoids the tax, such as a GmbH & Co. KG, a family foundation or a liquidation.
- Choose the payment route: instalments, the return rule or both.
- Prepare security and liquidity for the instalments.
- Set your moving day, give up your home and move.
In short: in this order you know the cost before you move.
Our recommendation
For location-independent entrepreneurs we recommend the US LLC from €1,800, formed after the move. It fits especially well without a fixed tax residence or with residence in a country without income tax on this income. Which structure suits which profile is shown in Which company suits whom.
If you are planning an EU corporation: move your residence first, then incorporate. The residence models are listed under /residency, such as Cyprus with non-dom status, Italy or Greece with a flat tax and Bulgaria with 10% income tax (as of 09/2026). In Cyprus you then form a Ltd for €4,500 in the first year and €1,800 from the second (Cyprus country page).
For your existing GmbH: value first, then choose the structure. With the right structure, exit tax can in many cases be avoided entirely before the move, otherwise reduced or spread. The routes in detail are set out in Avoiding exit tax. German nationals with larger interests in Germany should also look at extended limited tax liability. GCS coordinates valuation and structure, the change of residence and the formation. Tax assessment and valuation are provided by tax advisers and auditors whom you engage directly.