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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

#161

Post by splatzone »

twixfel wrote: post #87
alphager wrote: post #79

Earlier quoted context omitted.

The Notar does much more than just read the contract; he is liable for the correct administration of the transfer of ownership (done by a three phase process which guarantees that the seller cannot get the money without transferring the property and the buyer cannot get the property without selling the money). The concept of title insurance doesn't exist in Germany as the Notar eliminates the risk.

OK but how is it that other countries get by without them for founding LLCs? Are there countless scams going on in the UK surrounding limited company for example since you don't need a notary there? There's often lots of post hoc justifications in Germany for "why it is that way" (and has to be that way). But nobody ever seems to stop and think: ok but the rest of the world seems to get by OK without these reams and…

Fraudulent limited companies are a major problem in the UK. But I think the tradeoff is probably worth it

https://amp.theguardian.com/business/2022/dec/03/crisis-uk-c...

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

#162

Post by Rinzler89 »

Biganon wrote: post #155
nicbou wrote: post #114

I document German bureaucracy for a living,[0] and everything is like that. Every life event - immigrating, getting a job, getting married, having a child, buying a car - is mired in slow, paper-based bureaucracy. It is a constant, significant impediment to life in the country. Just last week, I was telling people that the best way to get married in Germany is to get married in Denmark. I cannot overstate how terribl…

I refuse to believe it is worse than France. I trust the Germans to at least be somewhat efficient.

>I trust the Germans to at least be somewhat efficient.

They're eficient at creating more bureaucracy as a universal solution to all problems.

Having dealt with Germany I have come to realize that excessive bureaucracy is basically a jobs program and a way for people to cover their ass whenever the shit hits the fan.

Something goes wrong and you're the big boss? Add more bureaucracy as your attempt to "fix" the problem and your justification to why your job is valuable to the company.

Something goes wrong on your watch? It's not your fault if you followed all the bureaucracy conjure by your bosses.

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

#163

Post by tut-urut-utut »

philwelch wrote: post #136
yau8edq12i wrote: post #43

Earlier quoted context omitted.

Even the USA does not have harmonized company law. Pretty much anything except what concerns the IRS says is in the hand of the individual states. Why would you expect the EU to do so?

Someone in the US can start a Delaware LLC or C corporation without living in Delaware. Can someone living in Germany set up an LLC or corporation in Denmark or Estonia instead of Germany?

Yes, but they would still be a subject of German taxation, which is ridiculously complex and expensive compared to Delaware LLC or an Estonian company run by a person not living in Germany.

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

#164

Post by AndroTux »

artemonster wrote: post #156
AndroTux wrote: post #148

Earlier quoted context omitted.

Estonia, like stated in the article. As a German founder living in Estonia, I can confirm that the difference in complexity when it comes to founding a company, filing taxes and dealing with bureaucracy isn’t even comparable.

do you know how in such cases salaries works? i.e. founder and employees are german and the company is in Estonia. Do they work as contractors? I thought to be a normal salaried employee you had to have the company also registered in germany too.

No, you don’t necessarily. Estonia has an e-Residency program targeted exactly at this scenario: Having a company in Estonia but living abroad. However, Germany being Germany, you will still have to deal with the Finanzamt and all the nice stuff that comes with it. So while you can run an Estonian company from Germany and be employed by it, I doubt you will gain much freedom from it. There’s really no escaping German bureaucracy without leaving the country.

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

#165

Post by pantalaimon »

yau8edq12i wrote: post #37
bouncing wrote: post #25

Earlier quoted context omitted.

I had my first LLC in grade school over a summer. I didn’t make a ton of money, but I did earn enough for my first real computer, which launched my interest in programming. When my wife started her current business as a consultant, she was living off her savings from teaching high school. If you think every entrepreneur has €25k of capital, you need to reevaluate what your country thinks of entrepreneurship.

As explained in the article, if you don't have 25k€ of capital, then you open an Einzelunternehmen (sole proprietorship), not a GmbH (LLC). It's a much simpler process.

You can also create an UG (haftungsbeschränkt) which is basically a GmbH with the 25k€ requirement removed. The only drawback is that this can make the operation look less trustworthy, depending on whom you are dealing with.

If you are selling Hot Dogs, nobody will bat an eye if it’s a UG, but if you apply for a big software contract, people might be wary.

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

#166

Post by ricc »

mk89 wrote: post #154
ricc wrote: post #140

Earlier quoted context omitted.

Big chains and enterprises, for sure. But there’s still a lot of SMBs not accepting credit cards.

Are these the same SMBs that ... accept only cash? :) Or do they really exclude CCs?

They exclude CCs. They have a card reader but they either have a sign saying, or the vendor will simply say, “keine Kreditkarte”.

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

#167

Post by Rinzler89 »

mk89 wrote: post #109
lttlrck wrote: post #83

Earlier quoted context omitted.

I moved from the UK to Germany in 1996 and back then the banking & payment was just sooo backwards. Some stores were incredibly anachronistic (Lerche springs to mind - since closed down) Sorry to hear it's still the same.

Germany and "digital" payments have a history due to old reasons. We don't appreciate its meaning anymore, but cash is literally the only anonymous payment method you can have in this lifetime, and people in Germany tend NOT to trust any entity/company/government holding your data for no particular purpose. The downside of this is the split brain problem that you have with distributed systems: a state knows something…

N'ah mate, the main reason is tax fraud, not trust in data holding entities, otherwise nobody in Germany would use Google/Instagram/TikTok if they cared so much about their data privacy.

Being free to dodge the tax man is incredibly valuable for small business and individuals in Germany as a lot of wealth is built on tax fraud. That's the kind of privacy people mean.

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

#168

Post by nicbou »

freyfogle wrote: post #146
nicbou wrote: post #129

Earlier quoted context omitted.

I don't think that it is overdone. It's bad everywhere, and it's much worse in Berlin. If you've experienced anything like a modern bureaucracy, Germany is infuriatingly backwards. The article is painfully accurate down to the minute detail.

I have lived/worked/banked in four countries (UK, US, ES, DE). Germany is not at the cutting edge, but it is far from the worse. The interactions I have had with bureaucratic systems in Thüringen have all been entirely fine. Friendly people, clear process, done quickly. Obviously that is only an n=1. It is a rural area that is not overloaded as Berlin is. Which country would you consider "modern"? My experiences: In…

My biggest gripes, summed up:

- The requirements are arbitrary, undocumented, and largely depend on how the case worker feels on a given day. Common wisdom is to bring far more documents than asked for, just in case.

- Everything is paper-based. You are expected to act as a transport layer between offices that won't talk to each other. Everything is mailed, because digital communications are distrusted and digitalisation lagging far behind.

- Everything takes far longer than it should, partly due to the above, and due to chronic understaffing of government offices.

This is a problem in all major cities, and many of the smaller ones. In this case, n is a pretty big number backed by the many relocation consultants I work with. You got lucky, and I envy you.

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

#169

Post by pantalaimon »

_dain_ wrote: post #52
yau8edq12i wrote: post #39

Earlier quoted context omitted.

> It's big enough to lock out many potential small business founders. They can open an Einzelunternehmen (sole proprietorship) instead. You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. > 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 describe…

>They can open an Einzelunternehmen (sole proprietorship) instead. Sole proprietorship doesn't have liability protection. That's not a small thing. >You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. "[Thing] is too complex, don't bother with it" is not an argument against making [thing] less complex. It's actually just a restatement of the problem! Other count…

You can create a UG (haftungsbeschränkt) with all the lability protection of a GmbH with 1€ capital.

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

#170

Post by whalesalad »

nicbou wrote: post #114

I document German bureaucracy for a living,[0] and everything is like that. Every life event - immigrating, getting a job, getting married, having a child, buying a car - is mired in slow, paper-based bureaucracy. It is a constant, significant impediment to life in the country. Just last week, I was telling people that the best way to get married in Germany is to get married in Denmark. I cannot overstate how terribl…

What are the redeeming qualities of Germany?
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