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Comment by lnsru | Hacker News Reader

Can you elaborate more? I am self employed electrician in Bavaria using simple Gewerbe. It is straightforward at the beginning. Literally hundreds of webpages describe the procedure. It is obvious, that growing the company into GmbH with own VAT number increases the complexity. But I haven’t seen it other way in Europe.

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I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks), involving me getting support from a company (firma.de) to help me prepare all the documentation which involved a lot of physical paperwork, then there's the visit to the notary which is required. After you do that, you need to register with the Finanzamt, and then you start finding out about all this other registries you need to pay and register to, or that you're automatically registered, but you receive separate invoices.

Any changes you need to make, adding more capital, change address, requires again, paperwork, tons of hours and again the notary.

Taxes are also quite difficult to figure out, I'm not German born, and my German is good for conversation, but to read and understand the tax has been a problem and I had to rely on very expensive tax consultants. (I know, this is my problem, not a german problem)

It's not that is hard, it's very time consuming, manual, and involves a lot of paperwork. Other countries do this much easier. Also, shutting down a company... I'm still trying to figure that out :(

> I had my experience with bootstrapping a self founded UG (Unternehmergesellschaft), and the process was long (about 8 weeks)

It would have been significantly quicker if you used a well-connected law firm.

I know a number of friends of friends in Germany who have all visited the lawyer, the notary and the bank all in the course of one morning. The whole experience was orchestrated by the lawyer because they knew the notary and the bank manager. In some cases the lawyer even drove them around between locations. ;)

The Steuerberater then took care of the Finanzamt.

Of course this entails extra professional fees. But the point is that there are many examples out there showing it can be done in less than 8 weeks.

But that’s the thing, even though it took weeks I spent a non insignificant amount of euros to set it up, I think it was nearly 2k at the end; and to make it quick would probably be another K or so?

It’s crazy expensive, because of all the bureaucracy. The UG is supposed to be quick and easy to set up, requiring minimum capital… but the process proves expensive.

The question is always the same: do you really need UG/GmbH at the beginning? It’s typical rookie mistake. I did it too, sold the company for 1€ to some shady people at the end. Gewerbe with 40000€ in the company’s account does not have the problems anymore. And the expensive tax consultants are just another cost of doing business in Germany. Ok, the quality of Finanzamt clerks varies heavily depending on location. Current town has nice ones.

I agree, the process is not easy or nice in Germany, but it’s enough to start businesses despite all the complications and overregulation. But getting VAT number and bank account in other comments mentioned Estonia was huge pita for friends.

Maybe I should have taken another road considering the size of my operations, unfortunately I was wrongly advised when starting up, I spent 1k with a Steuerberatung for advice on what was the proper structure for me, and still… I think they just adviced me the option that was gonna cost me the most to operate.

Lesson learned I guess!

I visited many lectures about business at the university, participated at Munich business plan competitions and all the time holding structure GmbH owning other GmbH was the best solution. The reality is that this is best solution for medium enterprises, for the bootstrapped start it does not matter. If I can’t take off as crappy Gewerbe the expensive holding will not help me either. Learning was not free.

My feeling about tax consultants in Germany is that most of them are scammers helping lazy people to enter mandatory things in corresponding Elster fields. The ones with knowledge are super rare. Better ask AI and then verify the information, that’s cheaper and makes more sense.

Some tax consultants are very shady, and some are really arrogant. I'm currently looking for one as we had some disagreements on pricing with my previous one, and many won't even take me due to my volume, or maybe because I ask to speak English, idk...

But sometimes I feel they are doing me a favor by taking my company, rather than me feeling like I'm hiring them as a service.

Agreed. In case you do not have big investors, just register as an individual entrepreneur, get a bank account and get going! It can be turned into a LLC/GmbH later if business goes well.

Also taxes will be much easier. Just get one of the countless apps where you add invoices, and they generate tax reports for you. With an LLC or when employing other people, getting a tax consultant is advised. IMO, they are not expensive - how many hours of your time are you willing to spend on this topic instead of paying e.g. 200 EUR/mo?

Can you recommend a tax consultant that charges 200 EUR/month including preparing the yearly statements?

I’m nearly at 3.5k/year and I have barely 10 invoices a month that I need to process between incoming and outgoing lol

It's a good price because the yearly statements for an LLC/GmbH are costly. We pay about 200/mo for accounting - with some more invoices :) -, 100/mo for payrolls but also the yearly statement alone is more than 2k. You can save that by not having an LLC - I personally think the risk in many software businesses is quite low. And some risks must be accepted as an entrepreneur...

In the UK, it took me half an hour and 30£ to open a Ltd, which I think is the equivalent of a GmbH.

It might have changed, but a few years ago you could go from 0 to a fully functional limited company, with accounting, business account, registered address with mail forwarding, etc. in a matter of days, from the comfort of your sofa.

I think GmbH's have a minimum capital requirement so not entirely the same as UK Ltd which can be opened with £1 of assets.

Possibly closer to the US Inc?

In Germany you also have the UG which is like a small GmbH, with 1 eur minimum capital requirement, that is if you like like the 1k (and up to 2k) it cost to set up.

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