An Argentinian in Stuttgart: Founding a Startup in Germany
startup-stuttgart.de
startup-stuttgart.de
You can still go for a UG or GmbH later. It's really not necessary in the beginning, especially if you have hardly any revenue.
Getting a GbR (Gesellschaft bürgerlichen Rechts ) setup is also possible at the Bürgeramt and similarly easy.
Also: as mentioned in the interview getting a "Steuerberater" once you have some income is a good thing to do. They can advice you in many financial and basic legal things and do most of the paperwork for you so one can concentrate on actual work ;-)
still you have to know enough german or have a german friend who can help you.
in my case we are bootstraped and the cost of a Steuerberater (tax advisor) is kind of high so we are delaying it as much as possible. Still I will need one next month :)
I would actually recommend seeing a Steuerberater before you form your company or register anything anywhere. There's a lot of money you can save on that front.
In any case the registration at the Gewerbeamt (Gewerbeschein) is a different beast than the contract and paperwork needed to form a company. In some cases freelancers are required to register and in some cases companies can be exempt. It's basically a license to do business. If you register you need to pay Gewerbesteuer which can be costly (you can deduct that from you income taxes but often not in full).
So if you can freelance instead of registering a Gewerbe for a single person, do so, by all means. Talk to a tax accountant to know if you really need to register.
the bank asked me for the contract, I guess I can have a GbR founding contract without registering the GbR, but I registered just in case.
Thanks for the tip. I'll try to look it up. As a quick question, do these two forms provide you the same liability protection as LLC?
What about bookkeeping regulations? Is it any simpler than UG/GmbH? Simple that I can do it myself, with only a minimal help of Steuerberater?
is not actually a legal form. It only means that you are a single entrepreneur/founder.
> Gewerbeschein
is not required in all cases, especially not for IT people. The final decision is with the tax administration. Your tax accountant can help you there. The general consensus is that if you can avoid it and be a regular freelancer, do so. In pretty much any case you need it if you form a UG or GmbH.
Bookkeeping regulations depend partially on how much income you have. If you have less than 17 500 Euros income a year you can actually be VAT exempt which removes the need for a Umsatzsteuervoranmeldung, but on the other end of the spectrum, you can have the full bookkeeping requirement similar the one that a GmbH has for a GbR if the GbR earns too much.
This is not correct. The default case is Einnahmen-Überschuss-Rechnung, but if you surpass either 400k/year (or in some cases 600k per year) for two years, you're subject to double accounting even as Einzelunternehmer or GbR. The tax administration can even compel you to double accounting in other cases (like high earnings in a couple of month). I know, since our GbR was subject to double accounting. Sadly.
Right, but a Gewerbeschein helps if you have any other income that's not from freelancing. For example Google AdSense or Amazon Affiliate links etc.
Limited Liability is what you're aiming at.
That is correct, but in most cases highly overrated for people just starting out, especially in IT. An IT-Betriebshaftpflicht (insurance) could be considered though, depending on the type of work you do.
sure, depending on the income. However, having one subjects you to gewerbesteuer which you can otherwise avoid. So you might want to balance the benefits against the costs.
> That is correct, but in most cases highly overrated for people just starting out, especially in IT
It's highly overrated especially if you're a single person enterprise since then, the owner/ceo can be personally liable in a couple of situations. It's a pretty definite must though if you consider having employees.
Depending on what you want from the company you need a GmbH/UG or similar construction. For example it's very hard to find investors for a GbR since a GbR is not a legal persona and cannot own assets. So all the money invested would be basically given to the founders. For various legal reasons it's very hard to invest money into a startup as a GbR, the chief reason is that the GbR is not required to register who is the CEO and can legally speak for the company.
Still, the chief reason people form a UG/GmbH is limited liability :)
something along the lines of "no big company makes business with a GbR".
Are you something like a freelancer/coder? Nobody gives a shit about your type of business. The task is to get the job done.
Do you have a B2C business? Customers absolutely don't care.
Do you have a B2B business selling a product or a service? Well, then it might make a difference, but not to every client.
People in Germany are waaaay to self-conscious about the type of company (Rechtsform). It is understandable somehow. I went to a couple seminars (Existenzgründungsseminare) and 2 out of 4 presentations were by lawyers about picking the Rechtsform. Who gives a shit? The attendees didn't earn a single Euro yet and still, they were discussing the Rechtsform as it was the most important thing on earth.
http://de.wikipedia.org/wiki/Aktiengesellschaft_(Vereinigtes...
If you want to start a company in germany, it's a good idea to start as a one-man-show ("Einzelunternehmer") or if your more than one founder as a GbR ("Gesellschaft bürgerlichen Rechts"). The "more professional" GmbH ("Gesellschaft mit beschränkter Haftung") is more expensive and has a lot of costs and paperwork involved.
Oh, and if you can effort an Steuerberater, do it! It saves a lot of time and stress!
I would say for IT: Either go Freiberuflich, or GmbH. Freiberuflich has the benefit of easier book keeping, lower tax (no Gewerbersteuer), and the drawback of liability and that you must not sell things (e.g. computers, or of the shelf software), but only own code or design. GmbH has the drawback that you need to do real book keeping, and likely need a Steuerberater.
The GbR is the default to avoid. One can do it as single founder, as long as there is no risk. But once you have more founders go for a different form.
The larger issue associated with both legal forms are actually the bookkeeping requirements since unlike a GbR or freelance, the company is actual a legal entity and does own all its money, so you need to pay yourself a wage instead of just taking money from the company. However, you can get a tax accountant to do all the bookkeeping for you for a reasonable amount.
you have to still try to do better if you want to keep it that way ;)
Not sure what you mean by your second sentence, I'm not German.
edit: this is why it is typically un-German to boost, and more typically German to complain -- they are just pointing out what to fix!
what I mean with the second sentence is that if you want to keep getting good results you have to have a critical view of the things you can improve and try to improve them.
Getting good results in one area shouldn't be an excuse to justify not being good in others.
I hope the interview doesn't sound like I'm only complaining about Germany, it's more in the hope that it improves so more companies can be created and maybe the example is followed by other european countries.
Denmark might be the easiest for foreigners: you can register a sole proprietorship free online, and get a tax code, within an hour. It's only in Danish, but simple enough Danish that Google Chrome's translation can handle ok: http://www.virk.dk/myndigheder/stat/ERST/Registrering_af_enk...
The government also recently translated their entrepreneurs' handbook to English, with background information on laws, incorporation types, employment norms, etc.: http://startvaekst.dk/entrepreneurshipindenmark.dk/tools_and.... And Copenhagen, at least, has an office specifically for assisting non-Danes in starting businesses and navigating any regulations: https://subsite.kk.dk/sitecore/content/Subsites/CityOfCopenh.... In general the civil service is surprisingly English-friendly.
But I'm disappointed there isn't more of a tech scene here. Stuttgart does have a lot of great schools, but this is an engineering town, not an IT city. Industry here revolves around Damiler and Porsche. The students are all in mechanical engineering, it seems. I'm thrilled to read something about this area, but I have to say, I'm awfully puzzled at the same time.
I'd be very interested in more interesting things to work on, but as it is, its mostly big business IT with lots of Java and XML.
The last time I'd looked up Stuttgart's hackerspaces on hackerspaces.org, the pages looked dead.
if you are around you should go and take a look.
look at the latest trend of startups that have hardware as part of their product and the internet of things movement, that will require different skills and there's a lot of that in stuttgart :)
With the volume of engineers in this part of Germany I would have imagined the IT/Software scene would have been even somewhat existent.
P.S. Cool to find someone else from stgt
Thanks for sharing this Momo.
You're not obliged to enlist the help of a Steuerberater. If you've just got an Einzelunternehmen or GbR, you only have to file a list of earnings and expenses (Einnahmenüberschussrechnung) plus some forms.
Also, become a member of the Bund der Steuerzahler (www.steuerzahler.de / www.steuerzahler-baden-wuerttemberg.de). They offer a vast set of brochures and summaries on their website's members area which can help you find your way around the German tax system. It's also possible to call them and ask for help if you have trouble with specific rules (though they're not allowed to provide proper consulting like a Steuerberater). Membership costs just 56 Euro per year.
I've been doing my tax declaration myself for years now and the few times I've interacted with Steuerberaters I realized they don't know more about the tax system than myself (sometimes they know less).
"the interview is lacking the most important question: What are the legal requirements and steps for a foreigner coming from outside Europe to fund a company in Germany and to become resident."
perhaps someone here knows?
I can't answer the questions since I have a dual citizenchip: Argentinian/Italian thanks to my grandparent :)
from what I've heard there is a new law to attract engineers and similar professionals to work on big companies only with the condition that they have a contract and are paid more than X annually (I don't remember the amount).
I don't know of something similar for founders.
Here is a more useful site explaining how foreigners can come and work in Germany: http://www.make-it-in-germany.com/en/
But yeah, I don't see anything about founding a company...
https://news.ycombinator.com/item?id=3224374
The guy who's interviewed there is lucky to have Italian citizenship (EU country; easy to move, live, work, incorporate a venture).