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How to found a company in Germany: 14 "easy" steps and lots of pain

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Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#11

Post by _dain_ »

yau8edq12i wrote: post #8
_dain_ wrote: post #5

Earlier quoted context omitted.

Every little speed bump you put in the way will deter some people on the margin.

If you have 25k€ of capital but get flustered because the state wants to make sure that you are not opening a shell company for someone else and that your articles of incorporation are legally valid, then maybe you need to rethink something.

I disagree. 25k euro is simultaneously a large and not a large amount of money. It's big enough to lock out many potential small business founders. But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Especially in the early days of a company when your stress level is already through the roof dealing with the actual problems of your new business.

I am generally suspicious of rhetoric like "you're a little well off, so we can heap arbitrary amounts of bullshit on you and you shouldn't complain".

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#12

Post by bradhe »

jFriedensreich wrote: post #9

i could not find the most important question while skim reading: does it have to be germany. i would rather sit in boiling water than found a company there again. you don't always have to move away completely to have a non germany company though i can also recommend that final step.

Bingo. I live in Berlin. I know loads of folks who found Delaware corporations, use deel.com to work for them, and eventually found a GmbH when they need to.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#13

Post by tticvs »

bildung wrote: post #10
_dain_ wrote: post #5

Earlier quoted context omitted.

Every little speed bump you put in the way will deter some people on the margin.

And yet the self-employment rate in Germany seems to be higher than in the US: https://genderdata.worldbank.org/indicators/sl-emp-self-zs/?...

Most self-employed people in Germany operate as "Kleinunternehmer" and therefore lack the liability protections provided by the LLC equivalent discussed in the article. It's apples to oranges.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#14

Post by shaism »

yau8edq12i wrote: post #4
bouncing wrote: post #2

Not to brag, but there are so few things to actually feel some civic pride for in America, and business registration is one of them, so I guess we have that. I can get an IRS EIN (tax ID), register an LLC, obtain a sales tax license (only required for selling stuff), and open a business checking account in about 2 hours in Colorado. Someone who knows what they’re doing and doesn’t spend time researching banking optio…

Unless you're opening companies on a daily basis to evade taxes or whatever, I fail to see why you would need the process to be that fast. Because with such short delays, nobody will have actually checked anything, so the only winners are fraudsters, in the end.

I think the time is not necessarily the issue. The issue is that everything is very manual and “analog” in Germany. You have to find a notary, register the “Gewerbe” at the Gewerbeamt, get a tax ID, and so forth. All are different processes with different institutions.

In theory, you can do the notarization online, but when I attempted to do it, the first notary did not even reply, and the second one told me: “The system is currently down. I would need to come to the office.”

In the US, you can just use Stripe Atlas or similar services, and get everything done for $500 in a nice digital interface within 2 or 3 days. But even if it took 2 weeks, it wouldn’t matter much because one doesn’t have to put time and energy into it whereas in Germany you have to contact people, coordinate, etc…

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#15

Post by OtherShrezzing »

Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comparison in the UK, there's a £12 registration fee, and a £1 (one pound) minimum initial share capital. It must put limited liability out of reach of so many people.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#16

Post by davidw »

OtherShrezzing wrote: post #15

Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comparison in the UK, there's a £12 registration fee, and a £1 (one pound) minimum initial share capital. It must put limited liability out of reach of so many people.

It's extremely regressive. I started an effort to reform things in Italy and... it kinda sorta got some actual results, although not quite as much as I'd hoped

https://blog.therealitaly.com/2015/04/16/fixing-italy-a-litt...

How many days of wages is 12,500 for the average worker? In the US, even for someone making minimum wage, you could pretty quickly cover the costs of forming an LLC, let alone someone making more.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#17

Post by intelVISA »

OtherShrezzing wrote: post #15

Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comparison in the UK, there's a £12 registration fee, and a £1 (one pound) minimum initial share capital. It must put limited liability out of reach of so many people.

Is running under a limited enough to limit liability? I'm no lawyer but thought you'd have to establish all the corporate infra (bank, tools, etc) to avoid piercing the veil in your daily ops.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#18

Post by xxmarkuski »

To be honest, I don't think much of notaries and believe that they stifle innovation and harm the German economy, especially SMEs, but also clubs and citizens. For example, the purchase or sale of a property can only be carried out with a notary who reads the purchase contract for both parties. For this service, he charges a fee of around 1.5% of the sale price. The entire profession is strictly protected by law and there is no competition.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#19

Post by intelVISA »

bradhe wrote: post #12
jFriedensreich wrote: post #9

i could not find the most important question while skim reading: does it have to be germany. i would rather sit in boiling water than found a company there again. you don't always have to move away completely to have a non germany company though i can also recommend that final step.

Bingo. I live in Berlin. I know loads of folks who found Delaware corporations, use deel.com to work for them, and eventually found a GmbH when they need to.

Nice strategy, isn't it tough to get an LLC's bank setup without residency?

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#20

Post by RicoElectrico »

I wonder: why EU did not try to somewhat harmonize company law? I can understand that things like tax code, penal code would not benefit from unification across disparate societies, but companies seem like a ripe target. This should have begun 20 or so years ago.
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