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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

#311

Post by Schlagbohrer »

adamors wrote: post #255
anonzzzies wrote: post #216

Earlier quoted context omitted.

I do not know an EU or Asian country that doesn’t have a similar paperwork misery; I had a company in DE and in many others; you won’t survive in Spain as SL if you are small and follow the rules either. So literally no one does. No different in DE. We never got fined or even reprimanded. Largest fine in DE we got was for charging the wrong VAT for some items and that was not really that bad compared to all the tax b…

In Romania it's so bad that there are companies who will handle everything for you, even if technically the chamber of commerce has a digital interface as well. Everything is handled online and you get digitally signed papers in a reasonable amount of time. This is probably the solution, an EU-wide company that has local offshoots and can handle the bureaucracy for a fee.

When there is an industry offering workarounds-as-a-service, then it is time for legal reform.

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

#312

Post by saltmate »

WaitWaitWha wrote: post #78
earcar wrote: post #18

Earlier quoted context omitted.

You get one chance at getting your company form right. Any other new chance costs a ton of money in restructuring. Software is malleable, companies are less so.

I am not familiar with German business entity structures, so this is very interesting. So, if I started a sole proprietorship, it is not possible to convert it to a full blown, privately held corporation in Germany?

It is obviously possible, the process is probably very similar in effort and expenses to founding it in that form directly.

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

#313

Post by throwaway15805 »

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…

Pretty much. I just have a symbolic 5% stake in the company and working there has certainly not made me rich. I'm still early in my career so I don't have a ton of savings. It wouldn't cause "serious trouble" but paying tens of thousands in taxes on top of the cost and hassle involved in moving overseas is still a significant burden and certainly a case of the regulation missing its mark.

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

#314

Post by wbl »

keiferski wrote: post #293
_fat_santa wrote: post #276

Earlier quoted context omitted.

The US system is built to support entrepreneurship while the EU system broadly is to support the consumer and employee. The US will never be able to match the EU's consumer and employee protections and the EU will never be able to match the US's ease of doing business, because to have one you have to fundamentally give in on the other. Depending on who you ask, one system is wildly better than the other, but at the e…

I think this is a false dichotomy. Consumer return policies, customer service, etc. tend to be much better in the US than in the EU. I would characterize it rather that the US is pro-business and pro-consumer, but somewhat anti-average worker.

Except every two weeks when he gets a bigger paycheck than most senior UK government positions

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

#315

Post by freehorse »

earcar wrote: post #241
Lariscus wrote: post #194

Earlier quoted context omitted.

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

I have founded a UG and upgraded to a GmbH before. It had got us "more credibility" with our clients, and 12,500EUR less in each other's bank accounts. Thanks for your insults.

> I have founded a UG and upgraded to a GmbH before.

So why not to the same here, instead of going with this more complicated setup?

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

#316

Post by ExpertAdvisor01 »

f6v wrote: post #288
ExpertAdvisor01 wrote: post #157

Earlier quoted context omitted.

Don't incorporate somewhere else it will only lead to disaster. The company will end up being German tax resident anyways due to management and control being in Germany as you live in Germany . Then you have to be compliant in 2 jurisdictions (file forms/balance sheets in both countries etc..) and worst case you could become subject to double taxation (if there is no agreement). The optimal solution is just to leave…

> The optimal solution is just to leave Germany Just go to one of them Baltic states. They actually have a functioning electronic ids and other necessary infrastructure. There’s no reason to live in Germany if you’re working with international clients.

Malta and Cyprus offer much better quality of life and also significantly less taxes .

Also Polands IP Box(5% tax rate) regime can be very interesting to software engineers right across the border.

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

#317

Post by notpushkin »

gwd wrote: post #112
bartread wrote: post #62

Earlier quoted context omitted.

In the UK it used to be one form and a fee of £25 or something like that. I think, nowadays, that's probably just done online as well.

That won't get you a VAT ID, which is the key thing he says he needs to be able to bill people outside of Germany. It is significantly cheaper than 9k EUR and faster than 6 months to get in the UK, however.

Do you really need a VAT ID though? There is the “reverse charge” mechanism, which IIRC you can use until you sell a lot in any given country. (IANAL)

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

#318

Post by doikor »

WarmWash wrote: post #224
Lariscus wrote: post #194

Earlier quoted context omitted.

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.

A lot of places in Europe are around the same.

In Finland forming a non listed stock company is 240€ in fees without any requirement for capital/assets.

I think Estonia is even cheaper.

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

#319

Post by nish1500 »

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…

High initial capital requirements have repeatedly proven to be more detrimental than beneficial (https://mariusring.github.io/web/BacherFagerengRingWold_Sele...). Germany is an outlier in wanting to keep the barriers high.

Running a business in Germany is for a closed inner circle. The apparatus is not meant for broke college students turning their weekend project into a company.

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

#320

Post by solatic »

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…

This is not an argument that founders should seed 25k EUR to cover liability, it's an argument that GmbH bank account amounts should be visible publicly. If I want to put in a catering order, the catering business does not need 25k EUR to cover liability. If I want to build a data center, 25k EUR is not nearly enough.
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