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How I would start my next startup in Germany without a GmbH (2020)

richventures.com

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Re: How I would start my next startup in Germany without a GmbH (2020)

#111

Post by kpz »

hef19898 wrote: post #62
kpz wrote: post #52

Earlier quoted context omitted.

Is it a possible for a solo founder in Germany to register an Estonian Business? I had the impression (althought i'm not sure about it and would happily be corrected) you would need to apply for e-residency and need a local contact person for bookkeeping + banking. With the yearly costs being higher than just going for a Gewerbe / UG + local (german) tax advisor. Would having a "foreign" company have any disadvantage…

I investigated that, and if you din't live in Estonia you need to go there to finalize some paper work. You are still liable for taxes in Germany, as you are a tax resident. That alone makes you tax advisor more expensive, findibg one that knows his way aroubd German corporations is easy enough, that's bread and butter. International taxation is different, and thus nore expensive. In the end, Estonia is just not wort…

Ah yes, then i would conclude that this is not a simple solution.

Please correct me, but would a start-up don't need to be a Gewerbe / UG / Gbr / ... to have an entry in the Handelsregister? You can't just make up a "company" a filed it as "Einkommen aus Selbstständiger Arbeit" when doing your taxes, can you?

Re: How I would start my next startup in Germany without a GmbH (2020)

#112

Post by SkyAndSand »

hef19898 wrote: post #94
tobilg wrote: post #82

Earlier quoted context omitted.

That’s not correct. Creating a UG will set you back hundreds of EUR for notary fees, commerce registry entries etc. And you have to prepare your annual accounts, which, if you let a professional handle it, will easily cost you hundreds more

I love how being compliant, taxes, accounting, other regulations seems to be such a hard thing for people looking for millions of VC money while litterally thousands of companies do so every day. I do see a pattern there so, after all ignoring regulations is still a viable business model for SV companies.

Well, I had a UG as holding company in Germany and even though the company was basically dormant (besides holding shares in another entity) I still had file yearly accounts which cost about 1000€ / year. Plus another 200€+ for IHK, 100€ for Bundesanzeiger, GEZ / Rundfunkbeitrag etc. All for a company that didn't really do anything. Would you really argue that this is easy / good practice? Because in my understanding this really felt unnecessarily complex and expensive.

Re: How I would start my next startup in Germany without a GmbH (2020)

#113

Post by hef19898 »

andi999 wrote: post #104
hef19898 wrote: post #58

Earlier quoted context omitted.

Oh, forgot about that... VAT numbers as well. Go through a tax cobsutancy and it is faster, did that twice. I see this as being seperate from incorporating so, as everyone is affected by slow tax authorities.

But can you do business without the vat number?

Wothout VAT number? Sure, if you stay domestic. It should also work internationally, but my two companies had VAT numbers to make things easier. Those are, I think, basically free. The time to get one varies depending on your local tax office. Some are faster than others.

Re: How I would start my next startup in Germany without a GmbH (2020)

#114

Post by SkyAndSand »

hef19898 wrote: post #58
SkyAndSand wrote: post #56

Earlier quoted context omitted.

While you can quickly set up the legal entity, getting a tax number can take months ( https://www.selbststaendig.de/wissen/steuernummer-beantragen ). The last time we set up a company in Germany it took more than 6 weeks to get a tax number.

Oh, forgot about that... VAT numbers as well. Go through a tax cobsutancy and it is faster, did that twice. I see this as being seperate from incorporating so, as everyone is affected by slow tax authorities.

We did go through a tax consultancy. Still took that long. While you may be technically right in that it is separate from incorporating, it still plays into how quickly a company actually becomes usable.

Re: How I would start my next startup in Germany without a GmbH (2020)

#115

Post by hef19898 »

manmal wrote: post #65
gyulai wrote: post #26

Earlier quoted context omitted.

The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. The free movement provision, which is one of the central pilhars of the E.U., extends to free movement of legal persons, and does not end with free movement of natural persons. The UK is no longer in the EU, but you could go with the Republic of Ireland or Malta.

Don’t you need to operate branches in each country if you do that?

You do, you don't need a local legal entity but having one makes a lot of things easier. E.g. employment and profit allocation. The latter has serious tax implications.

Re: How I would start my next startup in Germany without a GmbH (2020)

#116

Post by wewxjfq »

ChuckNorris89 wrote: post #98
wewxjfq wrote: post #88

Earlier quoted context omitted.

> In addition I've never encountered as many scummy companies (GmbH or otherwise) as in Germany. Corporate rules and culture are both complete trash. That's the quintessential HN comment I'm talking about. Just hasty generalizations and accusations. Tiresome.

Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Granted it's just another data point but I feel there's real substance behind this Germany bashing and it's not uncalled for. Also, Germany is the only EU country I've encountered where scummy law companies break citizens privacy hand in hand with ISPs to spy on your internet traffic and send you fines if you torre…

You are free to distrust GmbHs, I'm free to distrust HN comments. One is more warranted than the other.

Re: How I would start my next startup in Germany without a GmbH (2020)

#117

Post by andi999 »

keewee7 wrote: post #9
cloogshicer wrote: post #3

Thanks for the post. Reading this made me quite angry - politicians here in Germany always talk out of their asses about improving the situation for startups, but when it comes to removing these ridiculous administrative hurdles, absolutely nothing happens. In Austria, where I live, it's even worse. It's not even possible to start a limited liability company without at least 35k starting capital in the bank.

As a Danish software engineer I'm puzzled by how much Germany has convinced the rest world that it is some kind of high-tech powerhouse. Outside the old West German legacy giants the country is stagnant.

Which regions in the eu are more dynamic?

Re: How I would start my next startup in Germany without a GmbH (2020)

#118

Post by hef19898 »

dathinab wrote: post #59
mkl95 wrote: post #17

> “In order to start a GmbH in Germany you will need to buy-in. While you can most likely lend the money, it’s a risk you need to keep in mind. If you’re a solo-entrepreneur, that’s a whooping 25.000€ for you.” That sounds pretty uncompetitive when compared to other EU countries such as Spain and the Netherlands, where it's 3000€ and 0.01€ respectively. In Ireland it's also 25.000€, but corporate taxes are much, much…

It's 1€ (or more on your choice, usually ~100€) in Germany, if you go with a UG instead. You also don't "pay" 25k, it's more like your GmbH has to have constant reserves of 25k used in case of an insolvency. Through this means: 1. It's not limited "cash", but can also include e.g. a bought office room, machinery or even resources (it just must always be equal or above 25k at any point in time eve if the company also…

The 25k are tha capital of the GmbH, no need to have it in cash reserve. If you go for an initial value of less, the owners are liable for the reminder, but not more.

Re: How I would start my next startup in Germany without a GmbH (2020)

#119

Post by kpz »

hef19898 wrote: post #94
tobilg wrote: post #82

Earlier quoted context omitted.

That’s not correct. Creating a UG will set you back hundreds of EUR for notary fees, commerce registry entries etc. And you have to prepare your annual accounts, which, if you let a professional handle it, will easily cost you hundreds more

I love how being compliant, taxes, accounting, other regulations seems to be such a hard thing for people looking for millions of VC money while litterally thousands of companies do so every day. I do see a pattern there so, after all ignoring regulations is still a viable business model for SV companies.

If you already have funding these costs are peanuts, but if you just start out or want to bootstrap the running costs of a UG (~1200 yearly?) could be a dealbreaker.

Re: How I would start my next startup in Germany without a GmbH (2020)

#120

Post by ChuckNorris89 »

wewxjfq wrote: post #116
ChuckNorris89 wrote: post #98

Earlier quoted context omitted.

Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Granted it's just another data point but I feel there's real substance behind this Germany bashing and it's not uncalled for. Also, Germany is the only EU country I've encountered where scummy law companies break citizens privacy hand in hand with ISPs to spy on your internet traffic and send you fines if you torre…

You are free to distrust GmbHs, I'm free to distrust HN comments. One is more warranted than the other.

By all means, feel free to do that, I'm just some random guy or gal on HN. I'm just sharing my life experience.
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