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Comment by wewxjfq | Hacker News Reader

Oh God, this thread will be the usual Germany bashing. There is nothing fundamentally wrong with how Germany handles corporations. The German corporate law is actually pretty good. If I could change two things, I would make IHK membership optional and allow free filings of the financial reports. These are changes that a willing government could implement in a heartbeat.

And I think no country should handle corporations like the US does. The US is a tax haven and the corporate system doesn't benefit anyone but the owners.

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I've started a UG in Germany. It is one of the worst professional experiences I've ever had.

It's extremely cumbersome, bureaucracy heavy, slow and expensive. In addition I've never encountered as many scummy companies (GmbH or otherwise) as in Germany. Corporate rules and culture are both complete trash.

For reference I've started companies in Sweden, and I can do the full process online in an afternoon. Probably less than 30 minutes.

If I ever had to have a business for operating in Germany again, I would create an Estonian business. There's no reason that you corporate entity has to be German itself.

How did you do it? My UG was set up in two days, or three including the bank account, and cost, if memory serves well, 200 bucks ir so. Not the lowest anount because I do have a partner and we had some changes to the companies articles.

Doing the notary/banking/incorporation/tax-agency dance took a while.

But that's only one part of the process. The continuous level of bureaucracy is really high too, and during the years I ran my corporation it never seemed to diminish.

Like what? Notary and bank, sure, that's a requirement. Tax consultabt? Unless you want to do your own accounting you need one, easy enough to send invoices and bank statements once per month. Every company needs accountants to keep the books. I do it once per quarter now for the basically dead UG, it just exists as an empty shell for now.

Regardless of jurisdiction, the bureaucracy will be there. Someone would want you to pay taxes after all.

Speaking of paying taxes, that's much harder than it needs to be too. I did my corporate Swedish taxes between sets at the gym (no exaggeration).

Would reply below, but reached thread max depth.

That tax advisor I got was really scummy and way over charged in addition to being an ongoing headache to deal with.

See, that's why I never filed taxes in Germany in my live so far. Tax advisories are cheap ebough and so much better at doing it.

You’re talking about faster horses, while GP is trying to say that if the tax system is simple, you don’t need advisories AND it takes 5 mins.

> If I ever had to have a business for operating in Germany again, I would create an Estonian business. There's no reason that you corporate entity has to be German itself.

A lot of people in Germany founded a British Limited with a captial of 1 Euro. Then came Brexit ...

Is it a possible for a solo founder in Germany to register an Estonian Business? I had the impression (althought i'm not sure about it and would happily be corrected) you would need to apply for e-residency and need a local contact person for bookkeeping + banking. With the yearly costs being higher than just going for a Gewerbe / UG + local (german) tax advisor.

Would having a "foreign" company have any disadvantages comparing to a german company?

I investigated that, and if you din't live in Estonia you need to go there to finalize some paper work. You are still liable for taxes in Germany, as you are a tax resident. That alone makes you tax advisor more expensive, findibg one that knows his way aroubd German corporations is easy enough, that's bread and butter. International taxation is different, and thus nore expensive. In the end, Estonia is just not worth it IMHO.

Also, most start-ups don't need to be registered as a Gewerbe anyway. And let's be honest, if a "start-up" fails to cope with business and bureaucracy requirements your Döner shop successfully tackles daily you might reconsider running a business in the first place.

Ah yes, then i would conclude that this is not a simple solution.

Please correct me, but would a start-up don't need to be a Gewerbe / UG / Gbr / ... to have an entry in the Handelsregister? You can't just make up a "company" a filed it as "Einkommen aus Selbstständiger Arbeit" when doing your taxes, can you?

Gou need a Handelsregister entry, that's what makes it a corporation. Depending on what you do you might or might not need a Gewerbe on top. Some businesses need one, e.g. car repair shops, others don't. eCommerce doesn't, software usually neither. Best to check with your notary or tax advisor, they know that stuff. If you need one, you take an appointment at your local administration and sign a piece of paper (from what I understand, I never needed one).

Edit: Regarding your last point, yes, you can. Upside, it's simple. Downside, you are liable and carrying losses forward is tricky. Among other things.

>your Döner shop successfully tackles daily

Let's be real, that's not an Apples to apples comparison. You Döner shop doesn't sell internationally to various business customers like SW companies do, plus they often involve a lot of tax fraud by not giving receipts to all paying customers and not declaring all profits.

Any Döner shop usually has constant revenue from day one, while SW startups can go a long time without any revenue.

But they registered a Gewerbe, cope with cash registers, file for VAT monthly, are maybe even properly incorporated.

International sales are easy, in most acses they are without VAT and easy enough to file. International slaes, so, have nothing to do with German incorporation but are either EU or whatever driven.

> In addition I've never encountered as many scummy companies (GmbH or otherwise) as in Germany. Corporate rules and culture are both complete trash.

That's the quintessential HN comment I'm talking about. Just hasty generalizations and accusations. Tiresome.

Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany.

Granted it's just another data point but I feel there's real substance behind this Germany bashing and it's not uncalled for.

Also, Germany is the only EU country I've encountered where scummy law companies break citizens privacy hand in hand with ISPs to spy on your internet traffic and send you fines if you torrent anything copyrighted, while at the same time marking huge fuss about how important privacy is in Germany. Ironic.

If you move to Germany make sure to get defense insurance to protect yourself if you ever need to use a lawyer.

You are free to distrust GmbHs, I'm free to distrust HN comments. One is more warranted than the other.

By all means, feel free to do that, I'm just some random guy or gal on HN. I'm just sharing my life experience.

> Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany.

Compared to where?

Finland, Norway, Sweden, Denmark, Netherlands.

Might be a matter of statistics: All countries you mention are significantly smaller than Germany, i.e. have fewer companies, so the chances of you encountering a (fraudulent) German company when doing business in the EU are higher(?)

I had been working in Austria for last 15 years. From Europe I had to work with companies from Serbia, Croatia, Romania, Bosnia, Greece. Not even one single bad experience!

From my three bad experiences two are from Germany and with both we lost a lot of money and time on lawyers.

The filing is free (you can do it yourself), but most types of corporation require attestation which can cost more than 1k per year.

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