Wise Business Group
March 19, 2024
The new immigration rules in Germany at a glance
In 2023, the German government created new changes to the immigration rules for skilled workers. These changes have been made to attract skilled foreign labor and solve the labor shortage in Germany. The significant changes are related to the following:
• Requirements for obtaining a blue card
• Recognition of educational qualifications
• Introduction of opportunity card
Generally, according to the changes made in the immigration laws to Germany, a broader range of jobs with lower earnings will be eligible to obtain the German Blue Card. There is no requirement to recognize educational qualifications before entering Germany. If specialists get enough points, they can enter Germany using the opportunity card and search for their qualified job.
March 11, 2024
A review on "Made in Germany" label provision
"Made in Germany" label is somehow equals a guarantee for high quality products. To sum up, for using this label, you should follow some rules:
Your production process including development, design, production and quality assurance must be done in Germany.
The parts determine the nature of your products should be made in Germany. In other words, the base of value chain should be in Germany.
March 4, 2024
A brief overview of the types of legal forms in Germany
The legal form of a company specifies the ownership structures and the distribution of risk and liability in that company. Therefore, choosing it before starting a business is especially important.
Legal forms in Germany are divided into three categories: corporations, partnerships, and sole proprietorships. Each of them also has different subsets as follows:
Corporations in Germany
• Limited Liability Company (GmbH)
• Company with limited liability and limited partnership (GmbH & Co. KG)
• Entrepreneurial Company (UG)
• Public joint stock company (AG)
• Private limited company based on shares (Ltd.)
Partnerships in Germany
• Civil Law Partnership (GbR)
• General partnership (OHG)
• Limited Partnership (KG)
Sole proprietorships in Germany
• Sole proprietors
• Sole merchants
• Freelancers
• Small business owners
To choose an appropriate legal form for your business in Germany, you should pay attention to the number of founders, required share capital, start-up process and costs, liability, and accounting requirements. You can also consult experts in this field.
February 23, 2024
An overview of important tax tips for startups in Germany
As the founder of a startup in Germany, you should be fully familiar with the types of taxes that you will be required to pay after starting your business. For this purpose, it is better to get help from a tax advisor in Germany. Here, we briefly mention ten important tax tips for startups in Germany:
1. After registering your business in Germany, complete the tax registration questionnaire and submit it to the tax office. Then, apply for a tax number.
2. Estimate the profit from your business in the first year for the tax office.
3. Read German tax paragraphs and learn about tax saving tricks.
4. Reduce your tax burden by forecasting your business expenses.
5. If you start your business in Germany after a period of unemployment, you can use German tax laws to optimize your business tax.
6. Take advantage of tax benefits for founders in Germany.
7. In the first two years after registering your business in Germany, you must calculate your tax monthly for the pre-registration of the tax return and report it to the tax authorities.
8. According to the amount of profit, the legal form and the size of your business in Germany, use the correct method of determining the profit.
9. Pay attention to corporate performance tax.
10. You can reduce your business tax burden by registering a Gewerbe business in Germany.
February 14, 2024
Part-time self-employment in Germany at a glance
Is it possible to be part-time self-employed while having a blue card residence and an employment contract in Germany?
Yes, the blue card holder can register a company in Germany and hand over its executive management to his spouse or trusted person until obtaining a permanent residence permit. They can also work part-time in this company.
If the blue card holder does not have a trusted person in Germany, they can still be self-employed part-time by registering a side business at the Trade Office. In this case, they should pay attention to the requirements of self-employment in the target city, which is included in the Zusatzblatt sheet. Also, their employment contract should not contain clauses that limit or prohibit them from starting a business.
With part-time self-employment in Germany, you can realize your business idea and have a reliable source of income through your primary job. In such a case, it will be easier to finance the new business, and the time investment and mental pressure to generate income will be less. As a result, you can safely test your business idea and increase your income if it is successful.
Before starting the activity, inform your employer that you intend to be self-employed part-time. In addition, you need to register your business, register with the tax office, and obtain the necessary permits and certificates.
February 3, 2024
A brief overview of due diligence before buying a business in Germany
A thorough evaluation and due diligence of a business before buying it in Germany is mandatory. It will help you understand the various financial, operational, legal, and strategic aspects of the business you want to buy.
To evaluate a business in Germany, you must carefully review various items such as financial statements, compliance with laws and regulations, employment contracts, tax issues, manufacturing and supply chain processes, relationships with customers and suppliers, intellectual property, IT infrastructure, environmental obligations, insurance, the quality of income and key management personnel of the company.
January 23, 2024
An overview of the requirements and the way to receive child benefits in Germany
If you have children and live in Germany, you can receive an allowance from the government to cover the costs of raising your children.
Your child must live with you and be under 18 to receive this allowance. If they are over 18 years old, they must be studying or completing vocational training. Also, enrollment in a school in Germany is necessary for children aged 6 to 16.
First, you must get the benefit application form from the family benefits office and fill it out accurately. Then, submit the completed form with the required documents to the relevant office. This office will approve your application after reviewing the documents and information provided. As a result, you can receive a monthly benefit for raising your children, which amounts to 292 euros in 2024.
January 13, 2024
• Choosing the right location can significantly impact the success of your business in Germany, specifically if the considered business depends on the presence of customers.
• If you do not do a proper location analysis before establishing your business in Germany, you may have to pay for it by moving the location, poor performance, or even bankruptcy of your business.
• When choosing the right location for your business in Germany, you should pay attention to demand, competition, tax costs, transport connections, related requirements, labor availability, financing opportunities, and working and living conditions there.
• If the cost of the chosen property is more than your budget, you can cover it using your savings or compensate for it by earning money from methods such as subletting, adding business partners, or holding events.
January 6, 2024
An overview of the usual tax terms and the tax system in Germany
Tax terms are often difficult to understand. Since the German tax system is very complex, it becomes more difficult to understand these terms, especially for expats. Therefore, to avoid possible mistakes when paying taxes in Germany, you should familiarize yourself with some of the most common terms. The most important are:
• Tax Office: Finanzamt
• Gross salary: Brutto
• Net salary: Netto
• Salary certificate: Wohnbescheinigung
• Tax declaration: Steuererklärung
• Tax identification number: Steueridentificationsnummer
• Tax number: Steuernummer
• Tax rate: Steuersatz
If you are not thoroughly familiar with German tax terms and laws, we recommend seeking help from a tax advisor to fill out your tax return.
