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How I would start my next startup in Germany without a GmbH (2020)

richventures.com

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Re: How I would start my next startup in Germany without a GmbH (2020)

#211

Post by ant6n »

geff82 wrote: post #87

Do not forget about expatriation tax („Wegzugsbesteuerung“) when sfter a few years move to another countries. The tax is about 350% of your share of the average of last 3 years profits (might be reduced a tad, but will always be extortionate)

What if the company is not profitable?

(There are ways to avoid the exit tax: u only pay if u lived in Germany in 7/12 last years, u could move ur shares to a trust early, or maintain residency status)

Is there any company structure suitable for a startup that doesn’t require exit tax for founders (gmbh und co kg?)

Re: How I would start my next startup in Germany without a GmbH (2020)

#212

Post by register »

ghufran_syed wrote: post #193
hef19898 wrote: post #144

Earlier quoted context omitted.

This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.

And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?

German people of the elder generation ( boomers ) are generally risk adverse. I would say that this is the biggest reason why.

Re: How I would start my next startup in Germany without a GmbH (2020)

#213

Post by johannes1234321 »

ghufran_syed wrote: post #193
hef19898 wrote: post #144

Earlier quoted context omitted.

This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.

And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?

There are many difference. A key one: German companies will start to cater around German-speaking market, then expand to Europe, then further out.

An American company will focus on American market and while doing that is - due to using a wide spread language - immediately useable world wide and then can adapt to languages and cultures over time.

Re: How I would start my next startup in Germany without a GmbH (2020)

#214

Post by jFriedensreich »

hef19898 wrote: post #79
jFriedensreich wrote: post #24

i get ptsd reading about this and would rather die than having a gmbh again even though i had a holding ug from the start. what also no one tells you is that to get rid of these companies if it does not work out takes one to 2 years and costs a few thousand euros and many nerves you likely don't have anymore at that point. if i start again i am moving to estonia and start a OÜ.

As stated in another commebt, you can merge a GmbH with yourself. Sure, it costs money but is quite simple, fast and straight forward. I have no idea why start-up entrepreneurs fail at stuff your Döner shop or local garage succeed. Or tire change shop is part of a small local chain, every site is it's own GmbH. Just saying...

that is only possible if no other shareholder exists even in tiny minority amounts otherwise you need to buy back all shares according to book value even if the company is practically worthless to you, also dont forget transfer of shares in germany requires notariat with in person paperwork and fees, etc. in addition you transfer all liabilities back to you as natural person that might exist, which defeats kind of the reason for having a limited in the first place. so this is not an option in virtually any normal failed startup cases.

Re: How I would start my next startup in Germany without a GmbH (2020)

#215

Post by torbica »

codethief wrote: post #174
ChuckNorris89 wrote: post #98

Earlier quoted context omitted.

Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Granted it's just another data point but I feel there's real substance behind this Germany bashing and it's not uncalled for. Also, Germany is the only EU country I've encountered where scummy law companies break citizens privacy hand in hand with ISPs to spy on your internet traffic and send you fines if you torre…

> Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Compared to where?

I had been working in Austria for last 15 years. From Europe I had to work with companies from Serbia, Croatia, Romania, Bosnia, Greece. Not even one single bad experience!

From my three bad experiences two are from Germany and with both we lost a lot of money and time on lawyers.

Re: How I would start my next startup in Germany without a GmbH (2020)

#216

Post by loevborg »

dathinab wrote: post #29

> Kebab costs 2€ This is a very very outdated price, and as far as I remember it was only possible due to some very doggy things going on. Even a few years back the price was around 3.5€ (in cheaper areas of Germany). Before COVID the price was more around 4-4.5€. Now it's 6€. (Prices based on cheaper areas of Germany).

A few days ago I was shocked to pay 5.40€ for a (good) döner in Berlin. Inflation has massively hit the city.

Re: How I would start my next startup in Germany without a GmbH (2020)

#217

Post by Xylakant »

dathinab wrote: post #59
mkl95 wrote: post #17

> “In order to start a GmbH in Germany you will need to buy-in. While you can most likely lend the money, it’s a risk you need to keep in mind. If you’re a solo-entrepreneur, that’s a whooping 25.000€ for you.” That sounds pretty uncompetitive when compared to other EU countries such as Spain and the Netherlands, where it's 3000€ and 0.01€ respectively. In Ireland it's also 25.000€, but corporate taxes are much, much…

It's 1€ (or more on your choice, usually ~100€) in Germany, if you go with a UG instead. You also don't "pay" 25k, it's more like your GmbH has to have constant reserves of 25k used in case of an insolvency. Through this means: 1. It's not limited "cash", but can also include e.g. a bought office room, machinery or even resources (it just must always be equal or above 25k at any point in time eve if the company also…

> You also don't "pay" 25k, it's more like your GmbH has to have constant reserves of 25k used in case of an insolvency.

It’s not even that. The GmbH can use that money to buy things or pay for services and entirely use them. There’s no guarantee that there’s any money at all in a GmbH - the only guarantee you have is that someone invested 25k at some point in the past.

Re: How I would start my next startup in Germany without a GmbH (2020)

#218

Post by pantalaimon »

lucakiebel wrote: post #75
sokoloff wrote: post #70

Earlier quoted context omitted.

Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.

That’s exactly what the UG (haftungsbeschränkt) does, you can set one up with (theoretically) 1€ (though in practice it’s more like 250€), and you then have a GmbH with lower liability

And that’s exactly why a UG doesn’t look trustworthy to most business partners

Re: How I would start my next startup in Germany without a GmbH (2020)

#219

Post by gyulai »

gyulai wrote: post #26
cloogshicer wrote: post #3

Thanks for the post. Reading this made me quite angry - politicians here in Germany always talk out of their asses about improving the situation for startups, but when it comes to removing these ridiculous administrative hurdles, absolutely nothing happens. In Austria, where I live, it's even worse. It's not even possible to start a limited liability company without at least 35k starting capital in the bank.

The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. The free movement provision, which is one of the central pilhars of the E.U., extends to free movement of legal persons, and does not end with free movement of natural persons. The UK is no longer in the EU, but you could go with the Republic of Ireland or Malta.

Just noticed that I didn't finish my sentence there: Should read: "...incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. you might incorporate in Delaware and do business in California) ..."

Re: How I would start my next startup in Germany without a GmbH (2020)

#220

Post by gyulai »

ChuckNorris89 wrote: post #92
gyulai wrote: post #26

Earlier quoted context omitted.

The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. The free movement provision, which is one of the central pilhars of the E.U., extends to free movement of legal persons, and does not end with free movement of natural persons. The UK is no longer in the EU, but you could go with the Republic of Ireland or Malta.

>The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria Do you have any more details on the benefits of this operation? AFAIk, operating any business in Austria subjects you to Austrian labor and tax laws, negating any advantage. I was thinking about opening a LTH in a cheap Eastern RU country instead of the UK, and operate it in Austria but that last p…

> Do you have any more details on the benefits of this operation?

You'd mostly do this if you're Austrian and want to stay in Austria. The benefits are relative to starting a GmbH under Austrian law.

* You won't need to put up the €35k in capital.

* You'd have freely transferable shares. In that sense a Ltd is more comparable to an AG under Austrian law than to a GmbH, but much lighter in overhead. You'll need to play by the rules of the country you're incorporated in, where share transfers are concerned, though.

* I've read of companies in Germany using related constructs to try to get around provisions mandating employee co-determination ("Betriebsrat") for larger companies. Air Berlin used to be a Plc & Co KG for that reason, but I may be mistaken.

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