Business Registration in Germany
December 19, 2023
A sole proprietorship is one of the most common and popular legal forms for startups in Germany. This type of company has numerous tax and legal […]
January 1, 2024
• A small business in Germany can provide the prerequisites for moving towards self-employment. This type of business is attractive for founders who want to start without worries, with low capital, or as a side business.
• Business registration and obtaining a license is essential for starting a small business in Germany. Entering the commercial register is not required. However, depending on the business, some documents may be required.
• Accounting for a small business in Germany is simple and is done using surplus income accounting. Also, there is no obligation to keep accounts and publish annual financial statements in the Federal Gazette.
• You can use the legal forms of sole proprietorship, UG, GbR, or GmbH to set up your small business in Germany as an individual or a group. However, you should pay attention to things such as liability, requirements related to double-entry bookkeeping, and entry into the commercial register.
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.
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.
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.
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.
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.
April 22, 2024
Summary of important information about the VAT number in Germany
• The responsible tax office, as one of the departments involved in the business registration process in Germany, will automatically be notified of your business registration at the trade office.
• You must apply for a sales tax number when you start your business in Germany and as soon as the business license is available. The reason for this is that you have to correctly record all the financial transactions of your business in the accounts from the beginning.
• Receipt and collection of sales tax is part of a commercial activity. Finally, you must pay it to the tax office by mentioning your requested tax number.
• To obtain a VAT or sales tax identification number, you can submit your application online when registering your business and as part of your tax registration. Another way is to submit your request in writing and directly to the responsible federal tax office.
• VAT number is used in Germany to facilitate trade with other EU member states. Note that the corresponding country code will be placed in front of the numerical sequence.
• The German sales tax law explicitly states that you can use the VAT ID number on your invoices instead of the personal tax number.
• Small businesses in Germany are not required to declare sales tax as long as they do not exceed the limit. It is essential for cross-border trade in the European Union to Obtain a VAT identification number.
April 29, 2024
One of the common questions of our clients is often related to the purchase conditions and how to conclude a GmbH company purchase agreement in Germany. […]
