From the flourishing start-up scene of Berlin to the financial buzz of Frankfurt, there is no doubt that Germany’s strong economy makes it a popular destination for entrepreneurs. No surprise then, that a new business is founded every 20 minutes in Germany’s capital city alone!
How to start a business in Germany
Before you give up your job and embark on your dream of having your own company, there are a few administrative hurdles that need to be overcome. What kind of permits and licences might you need? Do you need to register with the German Chamber of Industry and Commerce (Industrie- und Handelskammer) or the Chamber of Crafts (Handwerkskammer)? Does your business need to be entered into the Commercial Register (Handeslregister)? Before you start up your own business, make sure you get to grips with the basics.
German business structures
One of the most important decisions you'll make when you start your own business in Germany is to choose a legal form for your business. The structure you select has major implications for your personal debt liability, how much tax you pay, whether you need to register with other organisations, and even the name of your company!
Business taxes in Germany
All self-employed workers in Germany, both business owners and freelancers, are liable to pay business taxes. The type and amount of taxes you pay depends on your turnover, profit and the kind of business you run. Find out what kinds of German business taxes you may encounter, how to register with the tax office, and why employing a tax advisor might be a smart move.
Start-up grants & Financial incentives for businesses in Germany
The strength of the German economy is based on the federal government’s willingness to invest heavily in new businesses, research and innovation. Currently, around 3 percent of GDP is diverted towards promoting economic growth in this way. Learn about the grants, loans and other financial incentives on offer in order to make the most of them.
Going freelance in Germany
Freelancing is a form of working in Germany that involves relatively little red tape compared with other forms of self-employment. You just need to make sure you are registered with the tax office and submit your annual income tax declaration. Be aware, however, that the definition of the profession is relatively limited, so before you decide to become a freelancer in Germany make sure you understand what it involves.