Exit taxation is a real obstacle to mobility. If you move abroad with a GmbH shareholding, you are expected to pay tax on a gain you never received. The good news: with the right structure before the move, it can be avoided entirely in many cases. And where that does not fit, it can be reduced markedly or spread.
This article sets out the routes concretely, each with its mechanism, condition and effort. Allow twelve to twenty-four months of lead time, and all of them are open to you. The basics are explained in Planning for exit tax. Legal position: 21 September 2026.
The starting point: what you hold privately on the day you leave
Exit taxation covers shares in corporations in which you held at least 1% in the last five years and which you hold privately (section 6 AStG). That gives the logic behind every solution. Either you no longer hold such shares as private assets on the day you leave. Or the shares stay anchored in Germany for tax purposes. Or the value is low. Or you return.
In short: change the structure before the move, and you change the tax.
Route 1: GmbH & Co. KG or atypical silent partnership
Shares held as business assets of a trading partnership do not fall under exit taxation for private shareholdings. Two variants are common. You convert the GmbH into a GmbH & Co. KG. Or you take an atypical silent partnership in the GmbH, creating a co-entrepreneurship to whose business assets your shares belong.
As long as the assets remain attributed to a permanent establishment in Germany, Germany keeps its taxing right and, as a rule, nothing falls due on departure. This requires a genuine business in Germany with its own management. On conversion, the GmbH’s retained earnings are treated as distributed (section 7 UmwStG). Both variants should be agreed with a tax adviser in advance.
In short: with a partnership and a genuine business in Germany, exit tax on the shares does not arise as a rule.
Route 2: German family foundation
Before departure you transfer the shares to a family foundation with its seat and management in Germany. On the day you leave, you are no longer the owner. Because the foundation remains fully taxable in Germany, the transfer itself does not trigger exit tax either.
In return, gift tax is due, and every 30 years substitute inheritance tax follows (section 1 ErbStG). The board runs the foundation from Germany. You give up direct control; the family remains the beneficiary under the articles. A foreign foundation does not have this effect.
In short: the family foundation with its board in Germany avoids exit tax, but suits mainly wealth held across generations.
Route 3: distribute and liquidate before the move
If you no longer need the GmbH before the move, you can empty and dissolve it. On the day you leave there are then no shares, and therefore no exit tax. The distributed reserves and the liquidation proceeds are taxed in the normal way, with real money in the account (section 17(4) EStG).
This route suits a business that depends heavily on you and that you will rebuild at your new home anyway. Customers, brands or software of the GmbH only pass to the new company at market price. The wind-up should be agreed with a tax adviser in advance.
In short: without a GmbH on the day you leave there is no exit tax, only the normal tax on the money distributed.
Route 4: leave with the intention to return
If you return within seven years and still hold the shares, the tax is cancelled (section 6(3) AStG). On application the period can be extended by up to five years, to twelve years in total. During this time you can apply to suspend the instalments. If you stay abroad after all, you pay the suspended instalments with interest.
Until you return, you distribute no more than a quarter of the departure value in total. This route suits years abroad with a clear horizon.
In short: if you realistically return and still hold the shares by then, you pay no exit tax in the end.
Route 5: cooperative
Converting into a registered cooperative used to count as a safe way out. Today cooperative shares of 1% or more are covered too (section 17(7) EStG, wording checked on 17 September 2026). Valuation is the open point. Under cooperative law, a departing member only receives their paid-up share balance, which may support a low value. Whether the tax office follows this has not been settled. This route should therefore be agreed with a tax adviser in advance.
In short: the cooperative can lower the value but is no longer a safe way to avoid the tax.
Routes to reduce or spread the tax
Valuation report. The tax office mostly uses a formula: average profit of the last three years times 13.75. If it leads to obviously incorrect results, it does not apply (section 199 BewG). A report under a recognised standard such as IDW S1 can support a markedly lower value, especially if the business depends on you personally.
Sale at market price. If you sell the shares before the move to an unrelated buyer or to a holding, the agreed price counts instead of the formula. The gain is taxed normally, and a vendor loan spreads the inflow; the tax itself generally still arises in the year of sale. A sale to your own holding should be agreed with a tax adviser in advance.
Instalments. On application you pay in seven equal annual instalments without interest, usually against security. This applies to every destination.
Sole traders aged 55 or over. If a business is given up before the move, there is once in a lifetime an allowance of EUR 45,000, which tapers for gains above EUR 136,000, and a reduced rate of 56% of the average rate, at least 14% (section 34(3) EStG, as of 09/2026).
In short: valuation reports, market prices and instalments reduce or spread the burden where avoidance does not fit.
The routes at a glance
| Route | Effect | For whom | Effort |
|---|---|---|---|
| GmbH & Co. KG, atypical silent | no exit tax | business stays in Germany | medium |
| Family foundation | no exit tax | large family wealth | high |
| Liquidation | no exit tax | fresh start abroad | medium |
| Intention to return | tax cancelled | time-limited years abroad | low |
| Cooperative | lower value, unsettled | after review | high |
| Valuation, sale, instalments | less or spread | everyone | low to medium |
In short: the right structure depends on whether your business in Germany carries on.
The new company: form it after the move
Anything you form after the move is not affected by exit taxation. For location-independent entrepreneurs the US LLC is the most flexible solution for this. It is transparent for US income tax, usually pays no US income tax without US business activity and follows your residence for tax purposes (USA country page).
In short: you build your future business in a new company at your new base.
Austria and Switzerland
Austria also taxes departure with capital assets, but on a move to an EU or EEA country it assesses the tax on application only on a sale (section 27(6) EStG 1988). At federal level, Switzerland has no exit tax on private shareholdings. A Swiss fiduciary adviser clarifies business assets and cantonal rules.
In short: Austria defers the tax on a move within the EU; Switzerland has none at federal level.
Our recommendation
If your business in Germany carries on with its own team, look at the GmbH & Co. KG first. If the business depends on you and you are rebuilding abroad, liquidation before the move is often the clearest route. For large wealth meant to stay in the family, the family foundation comes in. If no avoidance route fits, combine a valuation report with instalments.
For your future business as a location-independent entrepreneur, we recommend the US LLC from €1,800. It fits especially well without a fixed tax residence or with residence in a country without income tax on this income. If you are planning an EU corporation: move your residence first, then incorporate, for example in Cyprus, Italy, Greece or Bulgaria. German nationals put their interests in Germany in order at the same time (Extended limited tax liability).
GCS implements the structure and coordinates valuation, change of residence and formation. The structuring itself is reviewed by a tax adviser whom you engage directly.