Law of a foreign jurisdiction

Companies organized under the laws of a foreign jurisdiction
can be an attractive alternative. Following a series of decisions
by the Court of Justice of the European Union (CJEU) (Centros,
Überseering, Inspire Art Ltd.), it is now possible for companies
organized under the law of another European jurisdiction to
move their place of management to Germany if their foreign
jurisdiction permits such a move. German business associations
(GmbH, AG formed in Germany) can also select a place of man-
agement that is outside of Germany.

According to the CJEU, Germany is required to respect the legal
capacity of companies duly formed in accordance with the law
of another EU Member State, even if the foreign company has
moved its actual place of management to Germany. The require-
ments of CJEU rulings apply to corporations as well as to other
business associations.

A substantial presence in their home jurisdiction is not required.
Even if the foreign company lacks any material connection with
the country in which it was formed and only has a token pres-
ence in its nominal home jurisdiction, Germany may not refuse
to recognize the foreign company.