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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)

#71

Post by jhoh »

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…

That‘s simply not correct. Instead of founding as a GmbH you can start with an UG. A UG is legally virtually the same thing as a GmbH and you only need 1€ Stammkapital.

Once you start generating money with it, you can transform it to a GmbH. The only thing you achieve by that is displaying that your business is at least backed by 25k€.

In addition to that, you could also just start your business as a GbR. Funding this can be done completely for free (without needing any lawyers, paying fees etc.). As a GbR you‘re personally liable as a founder but when starting small that usually isn‘t a problem.

Founding in Germany kind of sucks, but for many different reasons.

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

#72

Post by SkyAndSand »

I_am_tiberius wrote: post #61

I find it a pity that YC requires companies to found a parent company in the US in order to invest in them. That's the only reason I have not applied.

Not true anymore:

> We invest in US, Cayman, Singapore, and Canada corporations. We have founders who apply to YC from all around the world and many have already incorporated in their home countries.

https://www.ycombinator.com/deal

I am currently trying to figure out what the best jurisdiction for an international team actually is: https://news.ycombinator.com/item?id=31620700

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

#73

Post by hef19898 »

harha wrote: post #37

Wait until you need to dissolve a UG, that’s a long painful and expensive process

I did it with a GmbH. You can always merge it with you as solo-entrepreneur. You need a balance sheet (don't ask me about the time limits, there was a Covid exception when I did it), a notary for paper work and of you go. Fast, easy and painless. Needs some additional paper work if there a more than one share holders. There are some loss carry forward limits and liability aspects to consider, the act itslef is quite easy so.

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

#74

Post by SkyAndSand »

hef19898 wrote: post #68
SkyAndSand wrote: post #45

As someone who also has fought a lot with the German bureaucracy, I'd tend to use another jurisdiction in the future as well. I'd be more than interested in hearing your opinions about what the best jurisdiction for internationally distributed teams actually is: https://news.ycombinator.com/item?id=31620700

If you want to avoid tax problems, and problems around social security, you would need a local legal entity in every country you have employees. At least in Europe. You also need, in cases you move e.g. inventory, local VAT numbers. Those can be had without incorporating. All that is just usuall incorporation and emoloyer stuff so. Solved hundred of thousands of times every day.

> If you want to avoid tax problems, and problems around social security, you would need a local legal entity in every country you have employees.

My understanding is that we could work around this issue by using https://www.letsdeel.com/ or https://remote.com/?

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

#75

Post by lucakiebel »

sokoloff wrote: post #70
SkyAndSand wrote: post #49

Earlier quoted context omitted.

.. and you are personally liable for anything damages caused by the business.

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

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

#77

Post by jokethrowaway »

I'm not sure this would fly well for Germany.

Generally, in most European countries, if you're resident in one country and open a company in another one (and start paying corporate tax there) you need to prove there's a valid reason to have the company there.

It can be hiring people there, having a director there, having an office, having your board meeting there.

Otherwise the company where you reside can argue that your foreign company is actually done to avoid paying taxes in the country you reside and ask you to pay corporate tax rate as you would in your country of residence.

Maybe having shareholders (Y-comb) is proof enough you can claim to be a Delaware company - but for small German businesses I don't think it's as simple.

Happy to be corrected.

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

#78

Post by leobg »

solar-ice wrote: post #66
leobg wrote: post #50

Earlier quoted context omitted.

Why then would a Delaware Corp?

It won't. Good luck employing people in Germany as a US company too - you really want at least a German subsidiary for that.

Sure. These are two different things. Liability protection and, let’s call it social acceptance. OP article suggests a UG as your personal holding company, which then owns the shares in the actual outward facing entity. That UG, I think, could be replaced by an Ltd. it’s easier and cheaper to set up, and insulates you against personal liability just as well as a UG or even a GmbH would.

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

#79

Post by hef19898 »

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...

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

#80

Post by ChuckNorris89 »

justusw wrote: post #44
thesimon wrote: post #38

Earlier quoted context omitted.

Filings will cost you at least 100/year for nothing. And you have to keep 25% of your profits you have 25k€. All unnecessarily complex.

If you never make any profit, you don't need to set aside 25 % of your profits.

>If you never make any profit

Sure but then that's not really anyone's goal starting a company in Germany. So ultimately you will have to deal with this issues if you don't fancy being homeless.

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