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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)

#131

Post by ChuckNorris89 »

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…

>your Döner shop successfully tackles daily

Let's be real, that's not an Apples to apples comparison. You Döner shop doesn't sell internationally to various business customers like SW companies do, plus they often involve a lot of tax fraud by not giving receipts to all paying customers and not declaring all profits.

Any Döner shop usually has constant revenue from day one, while SW startups can go a long time without any revenue.

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

#132

Post by hef19898 »

SkyAndSand wrote: post #112
hef19898 wrote: post #94

Earlier quoted context omitted.

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…

I never filed yearly accounts for the UG so afr, the first two years you don't have to. IHK sucks, I agree. GEZ isn't mandatory if you register your UG where you live, after all you pay already.

All in all, I'd say cost of doing business. What's next, do we atart complaining that Lenovo isn't providong free laptops? Or that office space costs money?

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

#133

Post by solar-ice »

SkyAndSand wrote: post #97
solar-ice wrote: post #66

Earlier quoted context omitted.

It won't. Good luck employing people in Germany as a US company too - you really want at least a German subsidiary for that.

Can't you work around this by using https://www.letsdeel.com/ or https://remote.com/ ?

In theory, you can't employ someone in Germany for longer than 18 months via an employer of record. If you want to employ someone for longer than that, you must have a German legal presence. This is one of the ways that Germany ensures that employee rights are actually enforceable.

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

#134

Post by hef19898 »

ChuckNorris89 wrote: post #131
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…

>your Döner shop successfully tackles daily Let's be real, that's not an Apples to apples comparison. You Döner shop doesn't sell internationally to various business customers like SW companies do, plus they often involve a lot of tax fraud by not giving receipts to all paying customers and not declaring all profits. Any Döner shop usually has constant revenue from day one, while SW startups can go a long time withou…

But they registered a Gewerbe, cope with cash registers, file for VAT monthly, are maybe even properly incorporated.

International sales are easy, in most acses they are without VAT and easy enough to file. International slaes, so, have nothing to do with German incorporation but are either EU or whatever driven.

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

#136

Post by I_am_tiberius »

SkyAndSand wrote: post #130
I_am_tiberius wrote: post #91

Earlier quoted context omitted.

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.

Ok, got it. My point was that you need to found a parent company in general. As I'm Austrian it doesn't matter if it's in the US, Canada, Singapore or Cayman Islands.

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

#137

Post by hef19898 »

Aulig wrote: post #102
hef19898 wrote: post #12

Earlier quoted context omitted.

Or keep the GmbH / UG and create a sperarate entity in an other country that has full or partial ownership. Either way, paying some tax law expert, even if expensive is the best advice. And not having a limited liability entity is actually pretty stupid, for a full catalogue of reasons.

Because of personal liability? Looking less legitimate to other businesses? Or what other reasons are you thinking of?

Mainly liability, a UG is liable for whatever amount it was founded with, a GmbH for 25k. A person is liable for, well, an unlimited amount. Which can suck, e.g. you run eCommerce and sales crash. A GmbH is liable for 25k of ooen invoices (or whatever assets the company currently has), a person would owe the full amount.

Plus, a GmbH is a professikbal business, the looks cannot be under estimated.

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

#138

Post by hef19898 »

SkyAndSand wrote: post #127
hef19898 wrote: post #86

Earlier quoted context omitted.

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?

Employment, VAT, local taxation. Do it properly and you can even, at larger scales, do stuff like Amazon or Apple.

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

#139

Post by jermaustin1 »

davidkuennen wrote: post #135

Wouldn't I have to pay 21% US taxes and the German taxes as well if I do it like this?

I'm not an accountant, but I believe you would US taxes on C-Corp profits, and German taxes on wages/dividends. There are also reciprocal tax agreements for earned income. It would probably be best to leave your profits in the c-corp, and wait until you are in America to do a dividend (which if your shares have been held for over a year is long term cap gains).

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

#140

Post by SkyAndSand »

I_am_tiberius wrote: post #136
SkyAndSand wrote: post #130

Earlier quoted context omitted.

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.

Ok, got it. My point was that you need to found a parent company in general. As I'm Austrian it doesn't matter if it's in the US, Canada, Singapore or Cayman Islands.

True, as Europeans we are basically always disadvantaged and need to set up a new entity to be able to receive an investment from YC (or likely most US investors).
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