Can you save money with a Swiss notary?
> December 2014
(German Federal Court of Justice dated 17 December 2013)+ The register court may not refuse a shareholder list filed for the commercial register solely because it has been filed by a notary having his or her seat in Basel, Switzerland. + A notarization, as required under the Gesetz betreffend die Gesellschaften mit beschränkter Haftung (the Limited Liability Company Act), shall also be able to be effected by a foreign notary after the Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen (the LLC Law Modernization and Anti-Abuse Act) has become effective insofar as the foreign notarization is equivalent to the German notarization.
In contrast to other legal regimes, German law knows notarial recordation,
§ 128 BGB, as a formal requirement.
Such can lead to not inconsiderable costs for the parties. Notary fees invoiced by a German notary are dependent upon the value of the transaction to be notarized. In contrast to attorney fees, a German notary has little leeway: the amount of the notary fees is prescribed by law and cannot be freely agreed upon. It is for this reason that a practice has developed in the past with which notarization costs were “saved” by having the agreements notarized in a foreign country.
It is, however, a matter of contention here whether a foreign notary who has notarized an agreement regarding the transfer of membership interests in a German limited liability company is authorized to file the membership with the commercial register.
Under the judgment of the German Federal Court of Justice from December 2013, such is to be accepted if it is readily determined that the officiating foreign notary is not the equivalent of a German notary. Only if such is determined would a foreign notary obviously be unauthorized to file a shareholder list and, as such, would be the equivalent of a third party.
A foreign notary is, under said judgment, authorized to file the list regarding a change in which s/he was involved if the notarization effected in the foreign country is the equivalent to a notarization through a German notary. It is, according to the German Federal Court of Justice, to be assumed that a foreign notary is the equivalent to a German notary, if—based upon education and his or her position in legal life—the foreign notary engages in activities commensurate with those of the German notary and—in preparing documents—has to comply with procedural law that is the equivalent to German notarization law.
In view of the fact that notary costs are, when compared internationally, quite high for transaction values that are quite high, a cap in the amount of 60 million Euro had been introduced for the determinative transaction value to be set and for the notary fees. Notary fees shall, however, continue to be non-negotiable. A German notary is obligated to levy the fees prescribed by law for his or her services. Such shall cause some parties to have their agreements notarized by a—often more cost-effective—notary in a foreign country.
The fees for notarization through a German notary are generally higher than a notarization in a foreign country. In deciding where to have a notarization conducted, however, you should not forget that there is no complete legal certainty in the case of foreign notarizations—in any event, insofar as notarization through a notary in Basel is not at issue. And the other costs (travel, etc.) should not be forgotten either.
