Comment by nik736 | Hacker News Reader

Comment by nik736 | Hacker News Reader

You have to pay taxes in Germany, it doesn't matter if you found a company in the US, Estonia or somewhere else, you are living in Germany and that's the important thing that decides you need to pay taxes there.

In Germany you could do a "Nebengewerbe or Einzelunternehmen", where you can write invoices in your name, this is a fast way to get started.

Otherwise you have the UG, which can be created with 1 EUR "Stammkapital", or the GmbH with 25k EUR, but you only need to have 12,5k when founding it.

Which taxes have to be paid is different if you do the "Einzelunternehmen" or found a company (UG/GmbH). With the company there is the Körperschaftssteuer instead of the Einkommenssteuer, additionally the regular Umsatzsteuer (19%) and also you have to pay Gewerbesteuer. Gewerbesteuer, Körperschaftssteuer and Einkommensteuer all have a free amount per year, if you don't hit that limit you don't have to pay it.

I would advise against founding in a different country, because taxes have to be paid in Germany and founding a company outside of Germany makes it a mess and really expensive.

One thing I still haven't completely figured out yet is the difference in liability between a UG (Haftungsbeschränkt) and Einzelunternehmen in Germany. As an Einzelunternehmen, you (as the sole proprietor) are liable with your private assets for any outstanding bills etc, I get that part. But is there anything else you're on the hook for? Am I'm missing something?

Let's say I started a SaaS company as an Einzelunternehmen. What's the risk for me personally since I can always spin up and immediately cancel cloud resources with hourly billing as customers come and go. I don't see a lot of financial risk in terms of customer churn. Again: What am I missing?

Customer and legal problems put you at great financial risk. E.g. customers get out of paying one way or another and you cannot cover operational costs, you lose customer data and get sued for damages, you screw up on GDPR and get fined, etc.

Bugs in your infrastructure could also cause you to accidentally spin up a shitton of instances far exceeding your operational budget, but that isn't the primary concern.

OK, I get that lawsuits would be a good example of "liability", but my question is this: Are you really not liable for the things you mentioned (GDPR, customer data) if you're the CEO of a UG/GmbH and it falls back on you because you're the one that designed the whole product?

Only if they can prove that you willingly or carelessly neglected your duties as a CEO. These are very narrowly defined, though: https://de.m.wikipedia.org/wiki/GmbH-Geschäftsführer-Haftung

There is also always the chance of getting sued. If you lose in court as a Einzelunternehmen, you personally will have problems If your UG or GmbH loses in court, you personally don't have any problems.

I have my full-time job in Germany. I don't work freelancer as a full-time. This project doesn't take 40 hours week. I built the platform, and now I am maintaining it as a side project. However, I want to make it profitable.

> "Nebengewerbe or Einzelunternehmen",

Can I still do this while I have other full-time job ?. In Germany, they have the status of freelancer, and I am not on freelance VISA. I thought that it is only for freelancers.

P.S: feel free to suggest organizations/lawyers/consultants who can help with these matters.

It doesn't matter if you already have a full time job or not.

Yes, you can do the Nebengewerbe/Einzelunternehmen while having a full time job. You should create an additional bank account and use that one for your side business, which will make it easier for book keeping (otherwise you have to open your private bank account to the tax authorities). You can also get a VAT ID, if you do EU business outside of Germany.

Freelancer is something else as you might think, some jobs fall in the category of "Freiberufler", which is some creative jobs, etc... All others are simply "Gewerbetreibende".

You can also found a UG/GmbH on the side, you don't need to do it fulltime. You should look in your contract though if there is anything that prevents you from doing so.

Sadly I can't suggest anyone since I had to take care of everything myself as well, I simply work together with a regular tax guy. I am based in Germany as well and started basically the same way as you.

> It doesn't matter if you already have a full time job or not.

It does, assuming he's going to have his company pay himself a salary. (Otherwise he'd need to wait for the yearly dividend.) In case of a salary, he'd have to

1) pay for social security and so on and make arrangements with his employer (basically, to decide who pays how much).

2) again, make arrangements with his employer because of the non-compete rule. It doesn't actually matter whether it's mentioned anywhere in the contract, as it's the law. (I forgot the exact article but it's somewhere in BGB.)

It matters a little but not as much as you may think.

(By the way nothing says the dividend has to be yearly, as a company you can pay multiple dividends a year if you so choose. It's more paperwork, and probably costs more in time from his accountant but otherwise you can do it as far as I know.)

Onto the two points, 1) The Social security is based on their wage, and no arrangement with the employers bookkeeping is needed. Their full time job would likely be Tax Class 1 (Or 3 if married) and the second job would be Tax Class 6. If there did happen to be a discrepancy it would likely be small, and paid back when they do their tax return. I also think that the Geschäftsführer of a company doesn't pay social security (or maybe pays a reduced amount?), but I might be wrong on that bit.

2) Yeah he/she must inform their boss, but unless they directly compete with the company, or the side business would affect their job performance they don't really have a valid reason to say no.

My suggestion would be to form a UG, they're relatively cheap and would be easier than the hassle of a foreign company. A foreign company whose operations are based completely within Germany would be liable to pay tax in Germany anyway.

I've heard http://firma.de are good with this sort of thing, and they have several articles on the different company forms in Germany to help. I am however in no way affiliated with them, and haven't used them myself yet.

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