Business tax is calculated from a combination of a uniform tax rate of 3.5% (basic rate) and a municipal tax rate. The amount of business tax you have to pay depends heavily on where your business is registered, as this tax is a municipal tax. Each municipal area and city has a different multiplier, called Hebesatz. It ranges from 200% to 900%, with an average of 402% in 2018. We know this sounds like a lot of gibberish at the moment, but we`ll give you an example calculation to help you understand. Several banks are responding to the growing need for modern banking services for small and medium-sized businesses, such as Kontist, Qonto and N26. Most of these banks also allow the connection of specific accounting software to simplify the bureaucratic burden. Unlike freelancers, who are exempt from this tax, you may have to pay business tax if you are self-employed with a trading company. Your obligation to pay business tax starts when your profit exceeds 24,500 euros per year.

This also means that you do not pay business tax on the first 24,500 euros of profit per year. The federal government and the various German and EU Länder have funding programmes to support business start-ups in Germany, especially in East Germany. These can include low-interest loans with long repayment periods and non-repayable grants. The KfW Group manages the largest promotional loans granted by the federal government. The Employment Agency also offers subsidies to recipients of unemployment benefits. Certain trades and professions in Germany are protected, so you need to take extra steps before you can register your company and start trading. As soon as you have registered your company, your registration information will be automatically transmitted to the tax office, the local trade association and, depending on the type of registration of the company, possibly also to the district court. However, bureaucracy is a trigger for many foreigners when it comes to setting up a business in Germany.

If you have any doubts or need help, you can contact firma.de who will be happy to guide you in English to start your business in Germany. Choosing the right structure is important because it will affect your corporate taxes and personal debt in the future. Individuals or companies wishing to move to Germany should seek advice from experts on legal, accounting and tax matters. This advice is available from private companies. In addition, various German authorities have information in English on their websites (as well as a number of downloadable brochures in English) that offer tips and advice on setting up a business, self-employment and a variety of other topics related to doing business in Germany. The amount varies depending on the amount to be invested, but the actual administrative burden is not too heavy. In general, there is a company registration fee of €400 in Germany, and to set up a GmbH, investors must subscribe to €25,000 of seed capital. However, setting up a “mini-GmbH” is much cheaper and requires an initial investment of as little as €1 (see below for more information on this type of business). For the establishment of a GmbH, one person is sufficient, for whom the share capital must be at least € 25,000. A notarized contract must be concluded between the partners, and the legal existence of the company only begins with its registration in the commercial register. The name of the GmbH must derive either from the corporate purpose or from the name of the shareholders and contain the addition “limited liability”. Shortly after registering your business with the trade office, you will receive a message from your local tax office, usually asked to fill out the “Tax Registration Questionnaire” form.

To speed up the process, you can also download a form to fill out or submit via ELSTER. The form is only available in German; If you are unsure of anything, it is advisable to consult a tax advisor instead of risking a delay due to incorrect entry of information. You must provide the following information: This is very important and it is an area where German differs from some other corporate cultures. There is chatter, but in German workplaces it is not normal for colleagues to talk about their private lives. The German way of working separates the personal and the private, so stick to professional matters. If you`re a freelancer or small business owner, you don`t need a business account1. You can use your personal bank account. Check your bank`s terms and conditions. Some banks don`t allow you to use your personal account as a business account1.

Before you can set up a company in Germany, you must first make sure that you are allowed to stay there long-term. Under EU law, citizens of the EU, EEA or Switzerland can live and work freely in Germany, including on their own account. A GA must have a board of directors which is authorised to decide on all matters relating to the operation of the company, which is appointed by the supervisory board and is accountable to it. The shareholders of an AGM exercise their power to issue instructions at ordinary general meetings. Information and contact details of private companies that promote their start-up services can be found on this website using the following links. For anyone who wants to become an entrepreneur, Germany can be a great place to start a new business. This is evidenced by the large number of small and medium-sized enterprises (SMEs) that form the backbone of the German economy. However, there are a few administrative issues that need to be addressed before you can officially become your own boss. In addition, an annual tax return must be filed for your business, in which you disclose all income and sales.

To work as a freelancer or start your own small business in Germany, you need to have several registrations and permits before starting your business in Germany. Not really. You just have to be organized. When you start your business, you`ll need to fill out a few forms, but there`s a lot of information online to help you. Your tax advisor can register a business for you. Firma.de can register a company for you. There are many resources to help business owners, including in English. The growth of German start-up culture has not been produced solely by German youth. The dynamics of Berlin and Munich are in fact an international phenomenon to which so-called expatriate entrepreneurs make an important contribution.

If your business idea does not qualify as a liberal profession, then you are a trader. Therefore, you must register with your city`s trade office to obtain a business license. If you run an online business, whether it`s an Etsy or Shopify shop, or a blog that makes money, you`ll need to register it as a business business. As an entrepreneur in Germany, you have to deal with numerous contracts, laws and legal regulations (e.g. leases for your office space, product liability, etc.). The great advantage: if all business transactions are contractually defined, you are guaranteed a high degree of legal certainty. In addition to general advice and guidance, EA`s English-speaking staff will personally advise you on setting up a business in Germany, help you fill out the forms and documents, and forward them to the relevant administrative authorities. EI can help you with many of the processes described below.

However, things have changed. Supported by the government`s Digital Agenda 2020, the e-commerce and information technology sectors play a much more important role. Berlin has become a haven for innovative software companies, web designers and marketers. Munich`s high-tech economy has embraced AI and new manufacturing techniques, while Frankfurt attracts a large number of financial entrepreneurs. Foreign entrepreneurs are always welcome to set up businesses in Germany, but if you are wondering how to start a business in Germany as a foreigner, there are some special considerations to consider. Look at the list of requirements below and tick off the various necessary documents, but there are also general issues. If you want to move to Germany and be self-employed and meet certain criteria, you will most likely receive a residence permit (for you and your family) if you can prove that your company has a positive impact on the German economy. Since there are many different forms of commerce, let`s look at the different legal forms and their meanings. There are three broad categories of business forms: It is a well-known fact that Germany has one of the strongest economies in the world.