Trade Republic Opens Its Platform to GmbHs and UGs

Trade Republic is expanding its offerings for the first time to include investments for German corporations. With the new “Private Holding Account,” customers can now also invest the assets of their GmbH or limited liability entrepreneurial company (UG) through the platform. To qualify, customers must be the sole owner or shareholder of the company and already have a personal account with Trade Republic. For uninvested balances, the Berlin-based fintech currently offers an interest rate of 2.5 percent with no upper limit.

Investing Corporate Assets Through Trade Republic

With this new offering, Trade Republic is extending key features of its retail business to asset-managing corporations.

Through the Private Holding Account, customers can invest in stocks, ETFs, and other investment products. According to the company, savings plans can be set up without an execution fee, and individual orders can be placed starting at one euro.

Transactions executed via Trade Republic’s Best Price service incur a flat processing fee of one euro. Alternatively, orders can be executed directly through one of 30 connected exchanges, including Nasdaq, Xetra, and Euronext. For these, Trade Republic charges two euros per order.

Management is handled via the existing app or the web terminal. There, users can switch between their personal portfolio and their company’s assets.

2.5 Percent on Uninvested Balances

In addition to securities investments, Trade Republic also aims to address corporate assets that have not yet been invested. The company currently pays 2.5 percent interest on the balance of the Private Holding Account—with no upper limit, according to its own statements.

Unlike with private customers, Trade Republic states that the cash balance in the corporate account is held exclusively in money market funds.

“Billions are sitting in German holding companies and are barely generating any returns,” says co-founder Christian Hecker. For many companies, investments have been expensive and complicated up to now. Trade Republic therefore wants to make access just as easy as it is for private customers.

Tax Benefits Possible on Stock Gains

A key component of the company’s positioning is the tax framework for corporations.

Under certain conditions, according to Trade Republic, profits earned by a GmbH or UG from the sale of stocks can effectively be taxed at around 1.5 percent. This is due to the tax regulations applicable to corporations for such investment income.

However, the specific tax treatment depends on the particular investment, company, and individual circumstances. The rate mentioned above cannot therefore be applied across the board to all investment income of a holding company.

If profits are not distributed to the shareholders but remain within the company, they can generally be reinvested there. This new offering is therefore aimed in particular at entrepreneurs who are building long-term wealth through their company.

Fully Digital Account Opening

Trade Republic is seeking to simplify the account opening processes, which have often been more extensive for business accounts in the past. The Private Holding Account is designed to be opened entirely digitally via the app or web terminal within just a few minutes.

In addition to an existing Trade Republic account, a prerequisite is a German GmbH or a limited-liability UG of which the respective customer is the sole owner or shareholder. This means the offering is initially limited to a clearly defined group of corporations. Companies with multiple shareholders are not currently covered by the described model.

Unresolved Issues Regarding LEI and Money Market Funds

However, Trade Republic leaves some details relevant to holding companies unresolved. For example, the announcement does not specify whether a Legal Entity Identifier (LEI) is still required for securities trading via the Private Holding Account. In many cases, such an identifier has been a prerequisite for legal entities trading securities. Given the promise of opening an account in just a few minutes, it would therefore be interesting to know whether Trade Republic will integrate LEI registration into the process or whether customers will still have to handle this themselves. Clarification is also needed regarding the interest paid on uninvested balances. Trade Republic states that it holds these funds exclusively in money market funds and currently pays 2.5 percent interest on them. For shareholders, this raises the question of what advantage this structure offers compared to directly purchasing a money market fund through their own corporate securities account. With order fees of one or two euros, investors could make the investment themselves and allocate the corresponding fund shares directly to their securities account. Therefore, a key factor in evaluating the offering is likely to be how Trade Republic structures the specific legal framework, ownership allocation, availability, and potential risks associated with the funds reported as balances.

Trade Republic Taps Into Corporate Assets

For Trade Republic, the Private Holding Account represents an expansion beyond its existing retail business. Instead of targeting only personal assets, the platform is now also opening up to capital that entrepreneurs hold within their companies.

Particularly for smaller holding companies and owner-managed businesses, the combination of digital account opening, securities trading, and interest on previously uninvested funds could generate significant interest.

However, just how large this market will actually become for Trade Republic will likely depend on whether the company expands the offering beyond companies with a single owner in the future. In any case, with the Private Holding Account, the fintech company is tapping into another asset category that has been significantly less addressed by neobrokers to date.