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Bootstrapping a SaaS Business in Germany: How I did it

lukashermann.dev

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Re: Bootstrapping a SaaS Business in Germany: How I did it

#61

Post by paxys »

PedroBatista wrote: post #12
gumballindie wrote: post #2

This is such a european startup story - where most energy is spent setting up a company and navigating bureaucracy rather than building a product. If anyone wonders why europe has such a lower number of startups this is why. And it’s not the government at fault. It’s the culture. Like seriously just pay someone 200€ to do this on your behalf and focus on stuff that matters not the “legal gray area” of earning pocket…

This varies wildly from country to country and Germany is known for their anal retentive bureaucracy and obsession with paper. In many other countries who didn't have the mental anesthetics of "we are Germans, we are the best" and had to make a living and get competitive the process is much simpler ( not all, far from it ). Also, "in the US is very easy and cheap" is a fallacy. First companies don't exist "in the US"…

You can get a business registered in Delaware in under 30 minutes by filling out a handful of forms online. If you don't want to do even that pay some service like Stripe Atlas $200-500 and the entire process will be down to minutes. There are still plenty of hurdles in running a tech startup in the US but bureaucracy is not one of them.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#62

Post by mbrain »

nforgerit wrote: post #57
LeanderK wrote: post #27

Earlier quoted context omitted.

why is this even the first thing that comes to mind when thinking about the legal form? This is highly unethical in general and really just super selfish. F*k you if you avoid taxes, especially in a country like Germany where society paid for your university studies etc.

German here. You mean the German education system that has been going down the last 2-3 decades? Are you even aware that the German tax system is redirecting tax income from smaller companies to richer ones (e.g. if they soon introduce "reduced electricity prices" for some heavy industry companies)? Are you aware that the system taxes employees relatively high and companies and capital income pretty low with thousand…

non-German living in Germany, I couldn't agree more. When I complain about this, Germans usually reply with 'then go back to your home'.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#63

Post by Roritharr »

mbrain wrote: post #60
Roritharr wrote: post #55

Earlier quoted context omitted.

I've just described a very simple case, it could be much more nuanced and just as problematic. Let's say you were one of the founding members of a startup in your 20s, you join and get 20%. After 3 years of not seeing much success you leave, hungry for cash in your pocket. The remaining two founders continue and grow the business substantially over the subsequent 5 years. Your 20% stake never meant much because the c…

> Now you could try to sell your shares to the other two founders before trying to move, which doesn't exactly simplify your life at this point. Just curious, could you just give it away for free or do they also have some value that will be taxed even though you didn't get any money?

IANAL nor am I a Tax Advisor, but from my understanding transferring the shares for a value for obviously less than the fair market value would come under scrutiny because the tax authority could interpret this as a way of evading income taxes for the founders.

We've had a similar situation happening and it took quite some legal fees to ensure we had all answers ready and in writing before the tax authority would start to ask their questions. It's a complex situation.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#64

Post by nforgerit »

mbrain wrote: post #62
nforgerit wrote: post #57

Earlier quoted context omitted.

German here. You mean the German education system that has been going down the last 2-3 decades? Are you even aware that the German tax system is redirecting tax income from smaller companies to richer ones (e.g. if they soon introduce "reduced electricity prices" for some heavy industry companies)? Are you aware that the system taxes employees relatively high and companies and capital income pretty low with thousand…

non-German living in Germany, I couldn't agree more. When I complain about this, Germans usually reply with 'then go back to your home'.

Ha, that's a very typical answer my compatriots would give. What Germans lack in competence they make up with arrogance. That just seems to be our thing.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#65

Post by Lionga »

mqus wrote: post #46
urduntupu wrote: post #35

Earlier quoted context omitted.

Nothing against paying some taxes. But keep in mind that Germany is among the top ranking highest tax paying countries. And there are better "society functioning" countries than Germany, at much lower tax rate. Not every tax rate is fair. Some tax rates are unethically high b/c due to a overloaded govt. apparatus.

> some taxes Not just "some taxes", but all of them. Keep in mind the author probably studied in germany and never had to pay any substantial fees to the university, his parents got money during his childhood and he will get money even if he does not immediately find a job after he closes his business. Taxes do go both ways. And just because you think the government is too big, you don't get to decide how much you pa…

Or you if you want things to change you leave the country. Chance of success: 100%

Chance of success with "vote, lobby and/or take part in political processes": 0,001%

I was paying over 50% of my income in taxes in Germany, now I live in a country where most things actually work better and pay around 10%.

Germany has become an absolut shit show for everyone who is capable and not in the business of scamming via Gov. The chancellor Scholz is literally the guy who helped to steal from gov. via Cum Ex in the biggest scandal of the country. And now the prosecutor to investigate and prosecut cum ex gets defunded. You can't make that shit up.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#68

Post by mbrain »

ponector wrote: post #28
varispeed wrote: post #25

Earlier quoted context omitted.

Why would you look to avoid paying tax though? I can understand doing so in a country that is squandering money - like the UK, where you pay through the nose and get very little in return, but Germany? I heard public services and basically what you get for your tax is pretty decent.

Everyone is trying to minimize taxes in a legal way. The best example is Apple. With enormous profits they pay almost zero federal taxes.

When you ask about ways to minimize, you are treated as a criminal who is avoiding taxes.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#69

Post by mbrain »

Roritharr wrote: post #63
mbrain wrote: post #60

Earlier quoted context omitted.

> Now you could try to sell your shares to the other two founders before trying to move, which doesn't exactly simplify your life at this point. Just curious, could you just give it away for free or do they also have some value that will be taxed even though you didn't get any money?

IANAL nor am I a Tax Advisor, but from my understanding transferring the shares for a value for obviously less than the fair market value would come under scrutiny because the tax authority could interpret this as a way of evading income taxes for the founders. We've had a similar situation happening and it took quite some legal fees to ensure we had all answers ready and in writing before the tax authority would sta…

Fun stuff Another sad thing is, you can easily get buried in the costs of Legal/Tax advisor costs even for some simple stuff.

That is why sometimes its better not to 'entreprendre' anything while living in Germany. The system is setup in a way to make you work full-time for corps.

Re: Bootstrapping a SaaS Business in Germany: How I did it

#70

Post by Lionga »

Luc wrote: post #58
throwaway60722 wrote: post #53

Earlier quoted context omitted.

Just over the border is a country with effective income tax for self-employed businessmen around 5-15%.

Why not name the country?

There are many, Cyprus, Romania, Bulgaria, Andorra to name a few
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