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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)

#121

Post by ElevenLathe »

SkyAndSand wrote: post #106
sokoloff wrote: post #70

Earlier quoted context omitted.

Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.

Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?

IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.

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

#122

Post by SkyAndSand »

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.

What is the alternative? (also asked here https://news.ycombinator.com/item?id=31620700)

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

#123

Post by SkyAndSand »

gyulai wrote: post #26
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.

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.

You could go with Ireland and Malta, but US investors would probably not be too happy to invest in you then (https://news.ycombinator.com/item?id=31620700).

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

#124

Post by ChuckNorris89 »

andi999 wrote: post #117
keewee7 wrote: post #9

Earlier quoted context omitted.

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?

Netherlands, Luxembourg, Switzerland, Estonia, Romania, etc.

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

#125

Post by vikramkr »

hef19898 wrote: post #109
marcinzm wrote: post #101

Earlier quoted context omitted.

> people looking for millions of VC money Startups don't begin with million of VC money which is what we're discussing here.

But they do have more investor money than 25k, don't they? Plus, proper incorporation serves your investors as well. Guess why YC ibsists in a Delaware corporation? From what I know, those are totally free of charge neither.

At the start? No, why would they? Raising money is usually something that makes sense after you build your mvp and all. If you really want an llc that's maybe $100 bucks. Otherwise cloud compute and stuff are near free at those scales and your own time isn't something you get paid for either.

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

#126

Post by hef19898 »

kpz wrote: post #111
hef19898 wrote: post #62

Earlier quoted context omitted.

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?

Gou need a Handelsregister entry, that's what makes it a corporation. Depending on what you do you might or might not need a Gewerbe on top. Some businesses need one, e.g. car repair shops, others don't. eCommerce doesn't, software usually neither. Best to check with your notary or tax advisor, they know that stuff. If you need one, you take an appointment at your local administration and sign a piece of paper (from what I understand, I never needed one).

Edit: Regarding your last point, yes, you can. Upside, it's simple. Downside, you are liable and carrying losses forward is tricky. Among other things.

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

#127

Post by SkyAndSand »

hef19898 wrote: post #86
SkyAndSand wrote: post #74

Earlier quoted context omitted.

> If you want to avoid tax problems, and problems around social security, you would need a local legal entity in every country you have employees. My understanding is that we could work around this issue by using https://www.letsdeel.com/ or https://remote.com/ ?

Or skip the "digital" shit and do it the proper way. If you get VC money we talk millions just do it professionally. If it's not VC money chancesvare you won't need any of it. And if you di, kudos, your business is viable enough to go international. Which brings us back to point one, do it professionally.

> Or skip the "digital" shit and do it the proper way.

What do you mean by that? The employment aspect?

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

#128

Post by abhinai »

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.

Distraction. Being compliant with all these regulations takes the very valuable focus away from the main goal of a startup: Finding product market fit. Established companies have no problem being compliant because they already have everything setup.

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

#129

Post by weinzierl »

SkyAndSand wrote: post #106
sokoloff wrote: post #70

Earlier quoted context omitted.

Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.

Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?

You can set up a UG for quasi nothing in Germany and it would be roughly equivalent to a US LLC or UK LTD with no capital. Thing is that almost no one does and the reason is that it is hard to do business as an UG because lack of trust as GP said.

I can't tell you why it is like that in Germany, but I'm curious why it isn't like that in the US and the UK.

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

#130

Post by SkyAndSand »

I_am_tiberius wrote: post #91
SkyAndSand wrote: post #72

Earlier quoted context omitted.

Not true anymore: > We invest in US, Cayman, Singapore, and Canada corporations. We have founders who apply to YC from all around the world and many have already incorporated in their home countries. https://www.ycombinator.com/deal I am currently trying to figure out what the best jurisdiction for an international team actually is: https://news.ycombinator.com/item?id=31620700

Are you sure? - they still have this in the FAQ section: "What if we incorporated as a non-US corporation? If your company is already incorporated somewhere other than the United States, Canada, Singapore or the Cayman Islands, in order to participate in YC you will need to create a parent company that is in one of those jurisdictions. The existing company will then become a subsidiary of the new United States, Canad…

That doesn't really contradict what I posted? If you have a company in US, Canada, Singapore or Cayman Islands you can use that. If not you need to set up a company in one of these jurisdictions.
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