Intercompany Lease Agreement Template for Germany

A German law-governed agreement used to establish and regulate the lease of commercial property between affiliated companies within the same corporate group. The agreement combines elements of standard commercial lease provisions under the German Civil Code (BGB) with specific requirements for intercompany transactions, including transfer pricing considerations and corporate law compliance. It addresses key aspects such as rent determination on an arm's length basis, operating costs allocation, maintenance responsibilities, and specific documentation requirements under German tax and corporate laws.

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What is a Intercompany Lease Agreement?

The Intercompany Lease Agreement is essential for corporate groups operating in Germany who need to formalize property arrangements between affiliated entities. This document is particularly relevant when one group company owns real estate assets that are used by other group companies. It must comply with German lease regulations under the BGB while also satisfying transfer pricing requirements and corporate law obligations. The agreement typically includes detailed provisions on rent calculation, service charges, maintenance obligations, and specific documentation requirements to demonstrate arm's length dealing. It's commonly used in corporate restructuring, tax optimization strategies, or when establishing new operations requiring intra-group property arrangements.

What sections should be included in a Intercompany Lease Agreement?

1. Parties: Identification of the lessor and lessee companies, including registration details and authorized representatives

2. Background: Context of the intercompany relationship and purpose of the lease arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Property Description: Detailed description of the leased premises and any included fixtures and fittings

5. Term and Commencement: Duration of the lease and commencement date, including any renewal options

6. Rent and Payment Terms: Rental amount, payment schedule, and adjustment mechanisms, ensuring compliance with arm's length principles

7. Operating Costs and Utilities: Allocation of operating costs and utilities in accordance with BetrKV

8. Use of Premises: Permitted use of the property and any restrictions

9. Maintenance and Repairs: Responsibilities for maintenance, repairs, and improvements

10. Insurance and Liability: Insurance requirements and allocation of risks between parties

11. Transfer Pricing Compliance: Provisions ensuring compliance with transfer pricing regulations and documentation requirements

12. Termination: Termination rights and procedures for both parties

13. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

14. Miscellaneous: Standard provisions including severability, entire agreement, and amendments

What sections are optional to include in a Intercompany Lease Agreement?

1. Environmental Compliance: Required when the property has specific environmental requirements or risks

2. Subletting and Assignment: Include when subletting or assignment rights are to be granted

3. Alterations and Improvements: Needed when significant modifications to the property are anticipated

4. Security Deposit: Include when a security deposit or bank guarantee is required

5. Property Management: Required when specific property management arrangements are needed

6. Group Company Provisions: Include when specific arrangements for other group companies' use of premises are needed

7. Break Clause: Include when early termination options are to be provided

8. Force Majeure: Include when specific force majeure provisions beyond statutory requirements are needed

What schedules should be included in a Intercompany Lease Agreement?

1. Floor Plans and Property Details: Detailed plans and specifications of the leased premises

2. Inventory of Fixtures and Fittings: Comprehensive list of included fixtures, fittings, and equipment

3. Operating Costs Breakdown: Detailed breakdown of operating costs and allocation methodology

4. Transfer Pricing Documentation: Documentation supporting the arm's length nature of the rental arrangement

5. Maintenance Schedule: Schedule of maintenance responsibilities and intervals

6. Building Rules and Regulations: Specific rules and regulations applicable to the property

7. Form of Bank Guarantee: Template for bank guarantee if required

8. Energy Performance Certificate: Current energy performance certificate as required by EnEV

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Germany

Publisher

Genie AI

Cost

Free to use

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