Good preparation is key to success start a business in Germany. This country has a reputation for being overly bureaucratic, which is why it is necessary to fill out various forms, several visits to government institutions in addition to banks, notaries and probably legal or financial professionals. However, Germany represents one of the best European countries to start a business.
Self-employed workers can enter two different types of business, where different rules are applied: business people or members of a liberal profession.
In the first case, autonomous businesses are included that allow you to earn money, for example, merchants, suppliers, among others. If it is of this type, then the entrepreneur must:
- Contact with the Chamber of Industry and Commerce or the Chamber of Crafts rated to determine if you need permissions, licenses, permits or even a specialty exam.
- If you are planning to start a company in the qualified trade or a similar sector, a registration with the Merchants Register or a register of activities similar to this one in the Chamber of Qualified Trades is required.
- After having all the documents duly completed, the company must be registered in the Office of Trade the city where the entrepreneur wants to open the business. This office will inform all other relevant authorities, such as the tax department, insurance, about the new company.
- In addition, it is mandatory to be a member of Chamber of Industry and Commerce or Chamber of Crafts rated.
In the case of a liberal profession, which includes professions in the health branch (doctors, veterinary dentists, physiotherapists), in the legal, tax or consultancy branch (lawyers, notaries, tax consultants), in the scientific or technical branch (engineers , architects), in the linguistic and information field (journalists, translators), among other branches. If there is any doubt about whether your business is included in this type, you can always consult the Institute of Liberal Professions or Tax office.
If the business to be opened is of this type, then the entrepreneur must take into account:
- The activity is what matters and not your qualification. An architect who wants to start a business in the construction industry is not considered a member of a liberal profession, for example.
- O Tax office is that it decides whether your business is classified as a liberal profession or a business profession.
- Freelance entrepreneurs are only registered with the Tax Office, which provides them with a tax number, and it is not necessary to be enrolled in the Office of Trade.
- Members of this type of business do not pay tax on trade.
- For some liberal professions membership in the respective chambers where they are inserted is mandatory. In addition, some of these also need to respect certain rules of their profession. In order to determine whether the entrepreneur's capabilities meet these requirements, access to the Recognition in Germany.
The conditions for start a business in Germany it also depends on the nationality of the entrepreneur. If he is a national of one of the member states of the European Union, countries belonging to the EEA or Switzerland, he does not need a residence permit to set up a business in one of the member states. However, there are some exceptions and these can be found in the Federal Office for Migration and Refugees.
If the entrepreneur has no European nationality, he must submit an application for the respective foreign mission provided by the Federal Republic of Germany in order to obtain a residence permit.
In certain cases, foreigners who have already resided in Germany and who have received a residence permit for purposes other than self-employment, may open such a company. In order to obtain more information, a consultation at Escritório Federal for Migration and Refugees.
If the business is a liberal profession or freelancer, it is only necessary to request a tax number provided by the Tax office place. Since the application form is in German, it is advisable to ask for help from someone who understands the language so as not to make mistakes when filling it out.
All other types of business must be registered in Office of Trade in the municipality where the company will be formed. Therefore, the following documents are required to start a business in Germany:
- An identity card or valid passport
- Depending on the activity, a license or authorization
- Between ten and forty euros for the registration fee, depending on the municipality in question
- A residence permit that also allows the entrepreneur to engage in an autonomous commercial activity, for non-European citizens
- A craft card, if the business is in this sector, or a trade card in the case of trade sector
The Office of Commerce automatically notifies the following authorities where it must also be registered: Office of Taxes, corresponding trade association, the Chamber of Industry and Commerce or the Chamber of Qualified Trades, the local court (Commercial Registry), the office of trade supervision that is responsible for the health and safety at work of its employees and customers.
Fees and taxes
Before choosing a specific legal structure, a tax advisor should be consulted to discover the tax implications of that choice. There are several taxes:
This is paid whenever a sale or purchase of goods or services occurs. The standard rate is 19% and there is a reduced rate of 7% applicable to certain professions such as arts and media. The company is obliged to invoice its customers for VAT and declare it separately from invoices. There are facilitators for entrepreneurs where the payment of this fee is not mandatory if the volume of business including the tax payable does not exceed € 17,500 last year or else this volume plus the taxes payable does not exceed € 50,000 this year.
This is paid every quarter to the municipality where the company is located. The rate is defined by the municipality itself and can vary between 7 and 17.5%.
This being paid in almost all purchases related to the company. This differs from VAT in that it is considered the VAT paid by companies to other companies. In addition, it must be declared separately from other invoices.
This is assigned to everyone who works or runs their own business. The value of this depends on the personal profit that the entrepreneur generates with his company.
This being paid solely by the profit generated by business type GmbH or AG.
Finally, the surcharge is charged to finance German reunification and is currently 5.5% of corporate or income tax.