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Founding a company in Germany: €9600, 152 days and I still can't send an invoice

paolino.me

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Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#221

Post by amadeuspagel »

matwood wrote: post #192
amadeuspagel wrote: post #167

> My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving. Without this "exit tax", every founder of a successful business would have a huge incentive to leave and to realize the gains elsewhere. It's not a tax for the privilige of leaving, but for the privilege of building a company…

A fourth alternative is to leave, and a fifth is to not start a company at all. Now you understand why the USA deploys 3-4x the amount of VC capital compared to the EU. And prior to the current administration, entrepreneurs mostly wanted to get to the US.

As far as I understand, the US taxes its citizens whereever they live (the third alternative I mentioned).

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#222

Post by moooo99 »

earcar wrote: post #109
robtro wrote: post #65

Germany is one of the worst countries when it comes to bureaucracy nothing is fast here if you go the legal path and stay within the law (which is mostly for small people big players have different ways) and as you see everything costs a lot so if you are founding a pure online business do yourself a favor and incorporate somewhere else and if you still live in Germany look into licensing or subcontracting yourself t…

I have yet to find the mythical efficiency everyone was talking about. Trains, Berlin Brandenburg Airport, this. It's rules and adherence to rules, more than efficiency, that I've found in my experience.

> I have yet to find the mythical efficiency everyone was talking about.

Comes down to a misrepresentation of history. Germans were never known to be efficient, they were known to be precise with everything, including bureaucracy. This happens to be handy with machinery, but not much else.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#223

Post by avhception »

VadimPR wrote: post #8

Before Europe gets lumped in as one country, founding a company in Netherlands and Sweden, speaking from personal experience, is a breeze. Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start!

To be fair, it's also much easier to start a company in Germany if you choose a simpler legal form. It's probably still easier in the Netherlands or Sweden, but the authors pain is at least partially self-inflicted.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#224

Post by WarmWash »

Lariscus wrote: post #194
rob74 wrote: post #165

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it. The 25,000 is there to make sure…

The authors inability to understand this really makes wonder how much of the rest of their story is essentially self-inflicted.

They are jealous of the US system where you can create an LLC in one hour for $200, and by the next day be doing business with all your personal assets isolated.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#225

Post by nradov »

rob74 wrote: post #165

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it. The 25,000 is there to make sure…

There is no need for a company to be able to cover liabilities. It's a stupid rule.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#226

Post by florakel »

piterrro wrote: post #107

I've setup my own company in Poland in 2015, by submitting a web form, 30 minutes later I could issue a fully VAT compliant invoice. This was not an incorporation however - that was a sole proprietorship, but I could still hire people full time, issue invoices etc.

You can do the same in Germany. Costs 29 Euros with an online form. Once the sole proprietorship is setup you apply for your tax id and done. The whole process took 2 weeks in my city. Legally you can even start invoicing as soon as you registered your business.

The problem with OP is that he chose an overly complicated structure. Probably got milked by lawyers and advisors.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#227

Post by chalmovsky »

rob74 wrote: post #165

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it. The 25,000 is there to make sure…

[flagged]

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#228

Post by arjie »

Aurornis wrote: post #149
wongarsu wrote: post #113

Earlier quoted context omitted.

Setting up a plain UG or GmbH gives the same advantage of not being liable with your private money, and is also a comparatively trivial process. Especially if you are the sole owner. Still slow compared to the US or UK, but not half a year slow Starting out a company as a UG & Co KG is a tax optimization move, not a liability issue

> Starting out a company as a UG & Co KG is a tax optimization move, not a liability issue Thanks for the clarification. However I’m still surprised that tax optimization is also considered a footnote in these conversations. In the countries I’m familiar with (mostly the US, minor second-hand experience with friends in some other countries as they started their businesses) starting a limited liability business ventur…

When I first started my company I half assed it. The LLC was quick and the EIN took two weeks. I accidentally signed a contract with my name instead of the company and elected to be a sole proprietorship. These are all the worst ways tax-wise to do this.

By Nov that year I decided to look into the tax implications and they were unpleasant so I wrote the IRS asking to be considered an S corp from the beginning of the year and they sent me a letter saying it was so. I ran payroll in Dec to catch up.

When doing taxes likewise I added a cover letter explaining the mistake about which entity was to receive the money and then assigned the income to the S corp on the return and worked everything through and corrected it in the right way.

The return took months to process and I had a mistake in the taxes that I was fined for a couple thousand which was reasonable but they accepted all these natural errors that I fixed up.

That sequence of encounters with the US government blew my mind. The much maligned IRS was eminently reasonable.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#229

Post by pjc50 »

VadimPR wrote: post #96
sscaryterry wrote: post #81

Earlier quoted context omitted.

Yep, it is straight-forward.

The hard part, I heard, was closing a UK company!

For a small company with 0 assets and one owner which has ceased trading, I believe you can just abandon it, stop filing and wait for it to be wound up - but check this!

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#230

Post by anothereng »

Sweepi wrote: post #134
throwaway15805 wrote: post #101

Earlier quoted context omitted.

The issue is liquidity. The tax comes due as soon as you leave, but you might not be able to liquidate your shares quickly enough to be able to pay those taxes. Depending on how your company gets valued these can be eye-watering numbers. This is something you can solve with enough time, but if I get a job offer where I'm supposed to start in 2 months? Very inconvenient. (There are some ways to spread this out have th…

You own a company so valuable that the tax on selling it shares puts you in serious trouble, but you still need to a start "a job"? A Job that requires you to change your nationality/tax residency to a non EU-state? Edit: Maybe I should give an example: Lets say you build up a company, your shares are worth ~100k, while you payed yourself a living salary of ~2k so you could pay rent and buy groceries but not much mor…

how about not taxing money you dont have?
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