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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)

#191

Post by allendoerfer »

I will play devil's advocate and defend some parts of the German system. Although my actual personal opinion of some of those institutions may vary, I will try very hard to keep this simple and just take the opposing side.

- IHK: Not bad, see German apprenticeship system

- GEZ: Not bad, see American media landscape (e.g. Fox News vs. CNN)

- Paying 25.000 € for your own GmbH shares: (1) These are not shares. (2) There are other options. (3) Your company keeps the money, you are not paying anyone. (4) It is only 12500 € up front, you can guarantee for the other 12500 € (5) You get rid of personal liability, so it is fair for everyone to know, there is at least some money within the newly created entitiy.

- Notary, having registers with names etc.: Not bad, see tax havens

- (Seemlingly) not having to pay taxes when your company is sold by a holding company: It is not the same thing. While a holding company selling shares is taxed a miniscule amount, it is actually taxed as soon as the money is paid out to you personally, making you effectively pay more taxes overall in addition to the operating costs of the holding company. The holding gets the benefit of being able to reinvest the gross amounts.

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

#193

Post by ghufran_syed »

hef19898 wrote: post #144
abhinai wrote: post #128

Earlier quoted context omitted.

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.

This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.

And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?

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

#194

Post by [deleted] »

dathinab wrote: post #29

> Kebab costs 2€ This is a very very outdated price, and as far as I remember it was only possible due to some very doggy things going on. Even a few years back the price was around 3.5€ (in cheaper areas of Germany). Before COVID the price was more around 4-4.5€. Now it's 6€. (Prices based on cheaper areas of Germany).

[deleted]

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

#195

Post by spacetraveler11 »

As a software dev freelancer I was using the Single-Person-Company (Einzelunternehmer) option that Germany offers. Personal liability is a risk of course (that can be mitigated by getting insurance and was never an issue for me) but in terms of upkeep it was very easy thanks to my tax consultant. This option is however not recommended if you want to get investors, especially from abroad.

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

#196

Post by mishaker »

SkyAndSand wrote: post #188
mishaker wrote: post #186

Earlier quoted context omitted.

The thing is: even if your company is abroad, if you live in Germany then that constitutes "Permanent Establishment". So that means that Germany considers that the company is in its own juridiction so german laws would apply. This also should be true about the holding (although I am not sure). You cannot simply have a German holding which contains foreign operating companies and not get involved with German bureaucra…

While I generally agree I am wondering if this still applies if you have multiple founders in multiple countries. Eg the founders are living in Germany, Australia and the US. The company is a German GmbH. You’d probably not automatically create PEs in Australia and the US just some of the founders living there?

Yeah that would be yet more complicated. I think it depends on the tax treaties between these countries.

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

#198

Post by hef19898 »

ghufran_syed wrote: post #193
hef19898 wrote: post #144

Earlier quoted context omitted.

This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.

And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?

Because easy access to vebture capital, a huge single language market, a risk affine culture and prior success in these fields seem to play a much larger role than how difficult it is to incorporate. If an entepreneur is already discouraged by incorporating, maybe he should stay an employee.

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

#199

Post by ChuckNorris89 »

codethief wrote: post #174
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…

> Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Compared to where?

Finland, Norway, Sweden, Denmark, Netherlands.

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

#200

Post by ChuckNorris89 »

brtkdotse wrote: post #153
ChuckNorris89 wrote: post #80

Earlier quoted context omitted.

>If you never make any profit Sure but then that's not really anyone's goal starting a company in Germany. So ultimately you will have to deal with this issues if you don't fancy being homeless.

Payroll is a deductible cost and not taxed as profit

True. Sorry, my mistake.
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