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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

#471

Post by anewhnaccount2 »

usr1106 wrote: post #420
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 am familiar with both German and Finnish bureaucracy. German bureaucracy is (in)famous for paperwork and using faxes. Citizens/residents have no unique identifier (more and more weakened recently) and need to present documentation for everything. If you have no paper birth certificate you are not born... Finland has had much higher digitalization for decades. You have a person number and authorities store everythin…

The degradation comes from waves of austerity politics by right wing governments. These services are expensive and require staff to keep things going. Austerity ideology dictates that there simply must be inefficiency in public services, and cuts are the cure to this disease since this will cause the public sector to "make do and mend" and end up running more efficiently, rather than having a knock on effect and decrease the quality of the services. This is the policy direction responsible for the fall in the quality of public services in the UK, and for some reason Finland decided this was an excellent idea and is following suit. The SDP patched things up a little bit, but not as fast as things can be torn down.

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

#472

Post by hnhg »

personomas wrote: post #413
hnhg wrote: post #104

There is also a brutal and inflexible exit tax. Should you decide to leave Germany, even temporarily, you will be faced with a tax of ~30% of the current valuation of your worldwide shareholdings (in companies in which you have >1% ownership). I commented on this in more detail in another post a while back: https://news.ycombinator.com/item?id=39786934#39788110 In the author's case, because he is using a holding comp…

I believe that the exit tax is usually never actually collected due to double taxation agreements between countries. Source: https://de.wikipedia.org/wiki/Wegzugsbesteuerung#Derzeitige_...

That is an understandable but incorrect conclusion. That should be the case, especially with freedom of movement within the EU, but the German tax authorities are essentially violating those agreements (which will inevitably get challenged in the law courts, but that will take some years). As I said elsewhere, please consult an experienced tax advisor for your particular circumstances as you cannot just figure this out for yourself, unfortunately.

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

#473

Post by nickpp »

zettabomb wrote: post #223
jeffrallen wrote: post #192

Earlier quoted context omitted.

I'm European because of US healthcare, insecurity, inequality, bad food culture, urban planning, and danger from natural and man made disasters, quality and cost of education. Every single one of those things is better in my new European home.

A very good summary. There's also more Nazis in America than in Germany, and more far-right hatred in general.

Thanks for your reply. Care to be more specific? I guess I am more curious about how you were personally affected than generic sweeping statements.

I live in the EU and I used to live in USA for a while so I am always looking for similar experiences and comparisons.

Thanks again!

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

#474

Post by hnhg »

ccozan wrote: post #241
toast0 wrote: post #118

Earlier quoted context omitted.

From the article you linked in that comment[1], it seems like this exit tax only applied to companies where you own 1% or more? and it's structured as the capital gains tax, but due now, so on the current value minus your cost basis. The US has an exit tax if you renounce citizenship, and it's assessed on your entire net worth. If the article you linked is accurate, this german tax seems much more reasonable. EDIT: a…

This rule has been changed in 2006, see the wikipedia entry. Also the double tax rule allows you to tax the win in the target country and not Germany.

It was also changed in 2021, and subsequent rulings that affect it earlier this year. The Wikipedia article is out of touch with more recent developments.

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

#475

Post by histories »

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…

Your website is amazing and has helped me personally thousands of time. It became the first quick english reference for everything when I first moved here. Thank you!

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

#476

Post by hnhg »

_Microft wrote: post #174
hnhg wrote: post #115

Earlier quoted context omitted.

I answered later in the thread: "Unfortunately, so far that deferral will most likely come with the requirement for a security, typically cash. That is the prevailing view of tax specialists right now, but will depend on each individual's experience with their local tax authorities." Sadly, you cannot just leave and think it would be automatically deferred. You must apply for the deferral before you leave and the loc…

What would prevent anyone making off with the money owed if they didn‘t require that?

It depends where you go. I believe (but could be mistaken) that there are agreements between countries, especially within the EU, that enable them to go after you. I am also not sure what the statute of limitations is regarding tax-related crimes. But it could be a valid strategy, I guess!

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

#477

Post by data_maan »

yau8edq12i wrote: post #39
_dain_ wrote: post #11

Earlier quoted context omitted.

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 thr…

> 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…

> If they're not ready to put up with okay-ish bureaucratic friction in the founding phase, they're not ready to open a company.

With this mentality, it's actually a miracle a German startup scene exists at all.

The _last thing_ a founder wants is to wade through useless bureaucracy when there's a product to push and Vacs to talk to.

But Germany never really was a founder's country, and much more ruled by big conglomerates it seems or small family business who did non-innovative things (the bakery at the corner - necessary&nice, but not innovative), than startup culture.

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

#478

Post by CalRobert »

brnt wrote: post #181
Biganon wrote: post #155

Earlier quoted context omitted.

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

I've worked in both, plus the Netherlands. France has one forgiving element: usually some room for the human element. Germans civil servants seem happy to apply rules and procedures, even if they are clearly suboptimal. French civil servants would agree it's ridiculous and are more inclined to help you get unstuck if you can show them that you are. France also seemed further along digitizing things. Total duration is…

My family and I are Irish citizens and while the Netherlands has been good to us, it is surprising to me that when we go to the hospital you have to check in with a specifically Dutch ID. In the name of the person with the appointment. That seems OK since I have a Dutch driver's licence, but my 4 year old daughter does not, and they seemed to have no idea what to do with her. Usually we figure it out but there's not even a check in desk so I end up bumbling around asking random staff members.

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

#479

Post by WA »

farbklang wrote: post #349
awesomeMilou wrote: post #213

Earlier quoted context omitted.

No it's not. With UG's limited liability is only extended to the collateral put in, meaning that as soon as someone sues you for 2€, suddenly you're liable with your private wealth. A GmbH is a true shield against that, you can be sued for millions and are shielded behind the 25k collateral.

This is wrong. The UG offers the same protection as the GmbH. It's probably less trusted. Funfact: you should always use the full title, Companyname UG (haftungsbeschränkt) on all communications and contracts. Emitting the 'haftungsbeschränkt' or shortening it 'haftungsb.' may make you as a CEO personally liable for damages occured.

You, as CEO, are also personally liable in a GmbH if you screw up very badly. In reality, it might not happen too often, but if you act illegally, you're on the hook: https://de.wikipedia.org/wiki/GmbH-Gesch%C3%A4ftsf%C3%BChrer...

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

#480

Post by i_am_a_peasant »

skrebbel wrote: post #448
i_am_a_peasant wrote: post #432

Literally the only good thing about germany are the salaries compared to the rest of europe but even that is becoming less great nowadays.

And the pretzels!

ja they're pretty good, but they're easier to make than you'd think, you just boil them in baking soda for like a minute before baking them, that's what makes them fluffy.
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