How to start a company in Germany - bureaucracy checklist 🇩🇪

Starting a business in Germany is an exciting bureaucracy adventure and a great learning opportunity how to print, fill out and scan documents 💼🚀

In the past 5 years I started four different businesses. It was always the same struggle which took weeks to months. Here are 20 key points I considered before sending the first invoice. 👇

  1. Capital: Set aside a total of €25,000 for GmbH (limited liability company). Other options are possible and up to your personal needs.
  2. Articles of Incorporation: Partner with a notary to draft your company’s articles (usually 1-2 weeks).
  3. Bank Account Setup: You need a corporate bank account for depositing your capital. Your initial Bank account name will have the suffix iG for "in Gründung" (in founding).
  4. Notarisation and Capital Deposit: Deposit your share capital, which your notary will verify.
  5. Commercial Registry Entry: Register your company in the commercial registry to legally commence business operations. Hopefully your company will be accepted.
  6. Company is registered: Don't forget to inform your bank about the registration to get rid of the iG suffix in your bank account name.
  7. Beware of Scams: Disregard scam letters that mimic official requests for payments. You will get dozens of them.
  8. Transparency Register Registration: Ensure your company is listed in the transparency register.
  9. Local Trade Office Registration: Register your business with the local trade office.
  10. Tax Office Registration: This step is crucial for obtaining your tax ID and VAT number.
  11. Official Business Address: Rent an office if you need an official address other than your home, as P.O. boxes are not accepted.
  12. Insurance: Secure the necessary company insurance.
  13. Accounting Software: Invest in accounting software.
  14. Payroll Setup: As a managing director, you must set up a payroll for yourself.
  15. Accounting and tax consulting costs.: Budget for ongoing accounting and tax consulting can be around 2.000€ annually.
  16. Tax Compliance: Prepare for monthly, quarterly, and yearly tax obligations.
  17. GDPR Compliance: Ensure your privacy policy complies with GDPR, and have Data Processing Agreements (DPAs) with service providers.
  18. Legal Notice Compliance: Include a compliant legal notice on your website and in emails to avoid hefty fines.
  19. Invoice Regulations: Ensure your invoices meet German regulatory standards.
  20. Exit Tax: If you move out of Germany, be aware of the potential exit tax implications

And just like that, after a thrilling paper chase and a crash course in German bureaucracy, you're ready to send your first invoice! 🚀 This isn't tax advice, and sure, the path of an Einzelunternehmer, for example, might have been easier, but I needed a GmbH for reasons. Now go forth, send those invoices, and may your cash flow be ever in your favour. Remember, every invoice you send is a trophy of your bureaucratic battle won.💰

What's your take? Do you think starting a business elsewhere in Europe involves the same level of bureaucracy and time commitment? 🤔