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Potential Cost Savers in German M&A Transactions – Practical Experience with Notary’s Fees

International investors with corporate transactions in Germany are often surprised to learn that significant costs can be incurred by a German notary as part of a normal corporate transaction.  The involvement of a German notary is in many cases required by law, and the corresponding costs for such notary are set by the German federal statutory cost order (Gerichts- und Notarkostengesetz – GNotKG) with certain caps, however, amounting up to EUR 53,170.  A recent change in the German federal statutory cost order for notaries has increased these costs.

In practice, structures can be modified to save notarial fees without any material deviations of the transaction documents.  For instance, international transaction documents are drafted often as bilingual documents. Under the changes in the new statutory cost order, the value of bilingual documents has increased by 30 percent.  It is worth considering if such translated documents should necessarily become a part of the notarial deed at all or if they may be attached as a non-binding convenience translation to save costs.  In addition, a choice of law clause, which leads to another 30 percent increase in the value of the transaction and unexpectedly higher notary costs, may be (and sometimes even has to be) avoided.

The notarial deed may also incorporate legal issues that increase costs but that do not have to be notarized at all.  Provided that this does not affect the completeness of the notarial deed, certain provisions that would trigger further notary costs (for example, a choice of law clause) can be separated from the notarial deed.  In addition, other legal facts that have to be notarized may be incorporated in one deed instead of two separate ones, thus saving costs as the German federal statutory cost order reduces the overall costs in a percentage basis the higher they are.  Certain transactions such as sales and transfers, or pledges of shares in a GmbH, can also be notarized by a Swiss notary, whose costs can be substantially lower than a German notary´s costs.

In sum, (international) investors should carefully consider ways to avoid increasing notarial fees when entering into corporate transactions in Germany.

© 2022 McDermott Will & EmeryNational Law Review, Volume V, Number 69
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About this Author

Dr. Clemens Just, Corporate Attorney, McDermott Will Law Firm
Partner

Dr Clemens Just is a partner in the corporate department of McDermott Will & Emery Rechtsanwälte Steuerberater LLP based in the Frankfurt office. 

Clemens advises on all aspects of corporate law and M&A transactions. Clemens has extensive experience acting for financial and strategic investors and on private and public takeovers. His experience includes corporate restructurings and insolvency law issues. 

Clemens regularly publishes in professional journals and books and lectures on corporate law issues. He has been specifically...

49-69-951-145-123
 Sebastian Maiwald, McDermott, Germany, Corporate Finance Lawyer
Associate

Sebastian Maiwald is an associate in the law firm of McDermott Will & Emery Rechtsanwälte Steuerberater LLP and is based in the Firm’s Frankfurt office. His practice will focus primarily on corporate law, commercial law, mergers and acquisitions as well as project and acquisition finance.

Sebastian studied law at the University of Göttingen. As a legal trainee he worked at the Higher Regional Court of Frankfurt.

Sebastian joins the Firm from the corporate and finance department of another leading global law firm in...

49 69 951 145 0
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