Asset-Management GmbH (VV GmbH): When It Makes Sense, What It Is Allowed to Do – with Example Calculations, Tables & Diagrams

What is a VV GmbH – and what is it not?

A “VV GmbH” is not a separate legal form, but a normal GmbH whose corporate purpose (and actual activity) focuses primarily on asset management: typically securities, shareholdings and/or real estate. Legally, GmbH law continues to apply (minimum share capital, corporate bodies, annual financial statements, disclosure) – see GmbHG.

Important: By virtue of its legal form, a GmbH is generally considered a business enterprise. For certain privileges (especially with real estate), it therefore depends very strongly on what the GmbH actually does – not just what is written in the articles. Publicity and filing obligations arise from commercial law; publication is typically made via the Federal Gazette (Bundesanzeiger).

The core mechanism: retention & tax deferral

The most important effect of a VV GmbH is often not “tax-free”, but tax deferral: As long as profits remain within the GmbH, no taxation arises at shareholder level. Instead, taxation occurs at the level of the GmbH – and for certain types of income (especially capital gains from the sale of shareholdings), the tax base can be significantly reduced (keyword Section 8b KStG).

Practical classifications can be found, for example, in specialist articles on free float/10% threshold, such as at Haufe Tax or in law-firm insights like Noerr Insights.

In practice, this means: if you intend to stay invested long-term anyway, the GmbH can often keep more capital in the system and reinvest more quickly – the compound-interest effect then works on a larger base.

What is often misunderstood

• “No distribution = no taxes” is wrong. Taxes arise in the GmbH – only the second layer (private withdrawal) is initially avoided.
• Dividends are often less attractive in a GmbH than capital gains, especially for free-float holdings.
• The VV GmbH is often only strong if you retain profits for a long time and do not withdraw on an ongoing basis.

What is a VV GmbH allowed to do – and when does it become dangerous?

The permissible scope of activities is determined by the articles of association – but for tax purposes it is primarily the actual activity that counts. Typical (usually uncritical) activities are:

• Holding securities (shares, ETFs, bonds)
• Holding participations (e.g., GmbH shares)
• Letting real estate (with a clean structure)

It becomes critical especially when a real-estate GmbH aims to obtain benefits such as the “extended real-estate reduction” and then additional activities or incorrectly structured activities are added (e.g., services for third parties, risky side revenues, “commercial” additional businesses).

For an initial understanding, practical articles are often helpful, for example at IHK portals (corporate taxes/basics) or at Rödl & Partner (as a general orientation – the concrete assessment is always case-specific).

Tax logic in practice: dividends vs. capital gains (VV GmbH vs. private)

Basic rules (strongly simplified, but practical)

Privately, many investment incomes are typically taxed with the flat withholding tax (25% plus solidarity surcharge, possibly church tax). The tax-free allowance for savers is currently 1,000 € per person or 2,000 € for jointly assessed couples. Short, easy-to-understand explanations can be found, for example, at the Federal Central Tax Office (BZSt) or at the Tax Office NRW.

In a GmbH, different rules apply: For capital gains from shares / participations, a 95% exemption under corporate tax law is relevant in many cases (typically: 5% are treated as non-deductible business expenses). For dividends, the situation is often worse – especially in the case of free float (participation below 10% at the beginning of the year).

For the free-float systematics you will find classifications, for example, in specialist articles at Haufe or law-firm insights such as Noerr.

Overview table: typical taxation (simplified model)

Diagram: orders of magnitude of tax rates (example values)

The diagram shows typical orders of magnitude (didactic, strongly simplified): Privately, about 26.375% (25% + solidarity surcharge) often apply; in a GmbH, capital gains from participations/shares (depending on the constellation) can be taxed very low, while dividends in the GmbH are often rather high.

For basics on withholding tax, information is available, for example, at the BZSt or classifications at extraETF.

Example calculations: how the advantage (or disadvantage) can look

Example A: capital-gain focused (10 years, no withdrawals)

Assumptions (simplified model):

• Initial capital: 500,000 €
• Return before taxes: 7% p.a. (modeled as purely retained capital gains)
• Duration: 10 years
• Private: taxation of the final gain at 26.375% (25% + solidarity surcharge; without church tax)
• GmbH: effective tax on capital gains: 1.5% (example value; depending on constellation / location)

Calculation of gross final value after 10 years
500,000 € × (1.07)¹⁰ = 500,000 € × 1.967151 = 983,575.50 €

Gross profit = 983,575.50 € − 500,000 € = 483,575.50 €

Interpretation: In this capital-gain scenario the difference is large, because the GmbH can build up the profit within the system almost “unrestricted”. In reality, however, further factors play a role: ongoing costs, actual income mix (dividends!), transaction frequency, trade tax multiplier and above all the later taxation upon withdrawal.

Withdrawal: the catch you need to actively manage

The VV GmbH is often strong during the accumulation phase, but you should carefully plan the withdrawal strategy: as soon as money is to be used privately, taxes typically arise (for example via dividends or salary). Exactly for this reason the GmbH is usually best suited for people who reinvest for a long time within the system and do not need regular private consumption.

Typical withdrawal paths

• Dividend distribution: classic and administratively clear – regularly leads to withholding tax (basic information for example at the BZSt).
• Managing director salary: can be useful, but must be appropriate and has further consequences (progression / social security depending on the constellation).
• Sale of GmbH shares / exit: may be interesting in individual cases, but is significantly more complex.
• Liquidation: organizationally and fiscally often unattractive if not prepared.

Real-estate GmbH as a special case: strong advantages, but sensitive rules

A real-estate GmbH can be very efficient with a correctly designed structure – especially if you intend to hold a portfolio long-term and reinvest cash flows. At the same time, there is a central difference compared to private assets: capital gains from real estate are taxable in the GmbH even after 10 years – while in private ownership (in certain constellations) tax exemption after the speculation period may be possible.

When real estate in a GmbH often makes sense

• Long-term holdings, focus on rental income and reinvestment instead of short-term sales
• Professional structure with clear processes, clean documentation and predictable financing
• Succession planning / family structures (e.g., transferring shares instead of individual properties)
• Risk separation (e.g., separating operating activities from the property portfolio)

When private ownership is often superior

• If a sale after 10+ years is very likely and the private tax logic should be used
• If you want maximum flexibility (private access, fewer formalities)
• If the portfolio is still small and GmbH costs would consume the advantage

“Is it worth it for me?”: decision tree instead of million-euro rule

General thresholds (“from 1 million €”) are rarely helpful. More useful is a decision tree that reflects your profile: need for withdrawals, income mix, investment horizon, transaction volume, real-estate plans and succession goals.

Decision logic (short version)

1. Do you need regular private withdrawals? If yes: private ownership is often preferable or a mixed model should be considered.
2. Is the income mix focused on capital gains? If yes: VV GmbH tends to become more attractive.
3. How high are the ongoing costs relative to capital? Calculate the break-even point.
4. Real estate planned? Then examine special rules / structure carefully.
5. Business participations? Examine holding options.

Formation & setup: what you should get right from the start

In practice a VV GmbH rarely fails due to “tax theory”, but rather due to setup mistakes: unclear purpose, insufficient process discipline, wrong account / depot structure, underestimated accounting effort or uncontrolled side activities.

Typical formation steps (practical)

1. Define the strategy profile: securities / real estate / participations, expected income mix (dividends vs. capital gains), time horizon, need for withdrawals, risk tolerance.
2. Articles of association & governance: formulate corporate purpose precisely (asset management), define competences and approval requirements; as formal basis see the GmbHG.
3. Notary & commercial register: notarization, registration and entry; information is available at handelsregister.de.
4. Bank account, depot & signature rules: open business account, select broker, document powers of attorney.
5. Tax registration: registration with the tax office, assignment of tax number; tools such as ELSTER can be helpful.

Ongoing costs, transparency & “soft factors”: the reality check

A VV GmbH is an ongoing organization. Typical annual costs arise from bookkeeping, tax returns, financial statements and disclosure. The more transactions and the more complex the structure, the higher the effort. Additionally, there are “soft” factors such as time, compliance, bank/broker processes and transparency.

Practical tip: a GmbH is not a better private account

If the GmbH is effectively used as a private account (frequent withdrawals, private expenses, spontaneous transfers), the retention advantage disappears – while the full administrative and disclosure burden remains. A clear internal rule therefore makes sense: withdrawals are the exception, not the standard.

What you should do next

Calculate your real scenario. A VV GmbH can be extremely strong with long-term retention and a capital-gain focused strategy – with a dividend focus and regular private needs it can, however, be disappointing.

Practical procedure:

1. Define strategy profile
2. Calculate 3 scenarios
3. Sketch withdrawal plan
4. Estimate formation and ongoing costs realistically
5. Only then implement the structure

For formal basics, portals such as existenzgruender.de or the Gesetze-im-Internet portal are helpful, and for disclosure topics the Federal Gazette (Bundesanzeiger) is the central point of reference.