This is absolute nonsense. Using buzzwords can not replace reasoning. There are structural problems why germany failed to build a digital economy.
Can you provide more details about this? How is this a problem and why does it affect startups?
[1] https://www.sup-kanzlei.de/fileadmin/user_upload/Scheinselbs...
Effectively... "Don't work as a freelancer for a company if they are your only client. That's employment."
[0]: https://www.gov.uk/guidance/understanding-off-payroll-workin...
One of the most important rules in Germany for startups: Employ as few people as possible. And I am not joking.
It's actually surprisingly easy to still fire people, you just have to have valid reasons: employee didn't come to work, employee works badly (Schlechtleistung), employee yells at customer, lack of work to do at the company etc. You just have to create the paper trail and follow the clearly defined process for firing (i.e. it has to happen at least two times, and you had a stern talk with the employee about it (Abmahnung).
You can also still fire employees without given cause in the first (up to) 6 months of employment.
What you definitely can't do is discriminate against employees, e.g. fire pregnant women because they are pregrant, fire migrants because they are migrants and so on. You have to have an actual, factual cause.
Also let's be clear with the concept of Scheinselbstständigkeit: This is simply a hedge against companies engaging in tax fraud by pushing people to be self employed when they really aren't. Scheinselbstständigkeit only triggers if a person gets over 80% of their revenue from a single customer, over a longer time, and has other things that hint at employee status, e.g. an own desk and company mail account, has to ask for holiday and so on. Simply having a large contract for e.g. 4 months with a single customer won't trigger Scheinselbstständigkeit.
In reality you just cant say that is the reason. If you fire the pregnant woman within the first 6 months you conveniently don't have to say anything.
You also get the inversion, we have to fire the migrants within 6 months.
I think the argument was that if someone worked for you for a few years as a freelancer and they suddenly become your employee you might be stuck with each other. Firing them will be much more suspicious. What to do with the other clients now that you are employed?
What is also kinda lame about the uncertainty is that freelancing may require much more dedication and working strange hours that might not even be legal as an employee.
I don't know what the solution is. Perhaps we need to merge the different formulas and adjust the salary.
If you run a society like that, you immediately face a problem: people try to get around the employee protection measures by relying on the gig economy, by hiring freelancers or by starting small companies.
So, the German tax agency has the additional authority to crack down on that. If you work freelance or run your own company, you need to always have several customers. If your only customer is a single company, the tax agency argues that you aren't actually a freelancer/small company, you are a de-facto employee of that company, and the two of you are violating several laws and owe back-payment on several employee benefit systems. Also, that's fraud BTW, here's your case number.
All EU countries have these perks with some variations between them. Only the "hard to fire" part varies more.
Don't forget that outside of Europe, most big economies were built on the ongoing exploitation of the working class. I am not saying this didn't happen in Europe, but at least there are efforts to curb this.
So a CIO complaining that he can't exploit people for cheap labour is not an argument for broken IT laws. It's an argument for seeing that it works as intended.
Most states in Europe treat you like you're mister money bags for anything above 50k a year.
You can choose:
- Cost of living (read Housing)
- Taxation
- Income
Government's need to curb one of the first two or boost the third, otherwise people will always be looking for the exit door.
In Australia, Canada and the US I can open a company in about 30 minutes from picking the name to opening a bank account I can get money into.
In Germany the last time I tried it was about 7 weeks.
And that the "easy" part (as we know that it could be done as quickly as in 30 minutes) takes forever does not speak well of the UX of managing a business on that country, because e.g. closing a business, which is by nature more complicated, could end up being a hellish ordeal.
If you want to found a limited liability company (i.e. GmbH) you also can start with picking a name and opening a bank. Add "i.G." to your company's name (i.e. GmbH i.G.) and start doing business.
Both approaches require you to register your business somewhere down the line, foremost for tax reasons. And yes, this can take quite some time, I had one occasion where we waited for 16 weeks after filing, but did business all the time. Note that some services are unavailable to you as long as your company is not formally registered, e.g. insurance.
If you are in a real hurry and need a running limited liability company, just buy one. Better tax advisors usually have a few "empty" GmbH in their files they sell you for the price of capital stock plus some handling fees. This gives you all required IDs immediately and you just have to transfer the bank account and, if you want to, change the name. Depending on the availability of a notary, this can be done in a few hours but usually takes a few days. One additional advantage of buying a shell is that you get history, which makes a lot of things easier.
IMHO, the British approach is more pragmatic: Why would you not make it as simple as possible to incorporate and run a company?
Ultimately the state should make it as cheap and straightforward as possible, get out of the way basically, and let people get on with it. It's difficult to find a reason to do differently
This is absolute nonsense. In the UK you can open a limited company with 12GBP in a matter of days. Oh and it’s completely online, something which Germany will never have in the foreseeable future.
I'd say in Germany for starting a new GmbH you'd need at least 4-5k set on the side for lawyer/notary/accountant fees, this can be deducted from the 12.5k/25k bank account but it's a pain in the ... for the average startup.