Founding a company in Germany: €9600, 152 days and I still can't send an invoice

stop50

For information: GmbH & Co. KG is one of the most complicated forms an company can be founded, the same goes if the inner company is an UG. Many things have to be done twice. The only good thing is that an investor or an owner are not liable with their private money.

ptrmcrthr

"The one thing the state exists to let me do, bill them cleanly, is the one thing I still can’t." I sympathize but I'm not sure that is the sole reason the German state exists.

VadimPR

Before Europe gets lumped in as one country, founding a company in Netherlands and Sweden, speaking from personal experience, is a breeze. Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start!

semessier

the real problems with administration dome starts after founding in many but not all European countries. There is light at the end of the tunnel as an EU Inc. is proposed. However the bureaucrats in probable but all countries will try to water it down to pointless to keep or extend their responsibility territory and duties.

bibinou

The mantra has always been to only create the company after sending the first invoice. Edit: oh it's setup like this to cheat on taxes.

jingpostmedia

Similar story in the UK\u2014registered a company online in about 24 hours and had a business bank account within the week. The gap between the best and worst EU jurisdictions for this is staggering.

jascha_eng

idk I founded a UG within a few weeks recently. Yeh it costs me maybe a thousand or so in notary fees but that's it.

lnsru

I am an electrician. Got my certification done with Handwerkskammer, went to the city hall, registered my company and filled online form rejecting the option with VAT number since all my clients are in greater Munich area. Same path could be chosen with VAT number. Ranting about choosing most complex business form and having no money for a consultant is not adequate in my eyes. Btw I am always liable as electrician (since it is dangerous) and can’t hide behind limited liability company in Germany.

throwaway15805

Been there too. Paying thousands of € for a notary just to read some text you wrote out loud to you is absurd. The cherry on top is the exit tax: > And no, I could not just leave instead. My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving. This is ostensibly there to prevent large-scale tax fraud but has ridiculously low thresholds that make life difficult for anybody who is shareholder of even a small company.

Kim_Bruning

I looked into GmbH (german) , BV (dutch) , and OU (estonian) . GmbH seems very unpleasant. BV and OU are easier to obtain. But BV requires your primary place of business to be the Netherlands, which isn't always practical when you're trying to extend your activities internationally. OU is supposed to be better for international operations, but -because it's a single country initiative- creates new and interesting tax problems. At this time, the whole system seems to revolve around geographic location. As long as you stay put you're sort of fine, but if you move around within the EU, the law doesn't stay stable around you. This is impractical. EU Inc seems to be a new initiative to fix a lot of the patchwork problems, but doesn't seem to be live yet. ( https://commission.europa.eu/topics/business-and-industry/do... ) I'm told that interstate commerce in the US isn't always necessarily easier, mind. Maybe the EU can take some lessons learned.

zurfer

We outsourced it for 2.5k (extra) and it was still painful, took almost 2 months and worst of all wasted so much time and focus. The worst was sitting at the notary, and getting read out loud by her what we were about to sign (also paying for that). If you think about starting a company, spend some time to think through what it would mean for you to be a Delaware C Corp or an Estoinian one. It will increase your chances of success as you can focus on what matters.

bartman

Wait until you want to convert the UG to a GmbH and realize that it's not simple or cheap at all. It's not enough to have had properly filed tax returns every year, have a large enough profit-collection-line item in your books (25k EUR+) and then fill out a form. No, if you want to use the profit your UG was required to accrue to raise your capital stock to 25k and rename it to a GmbH you need to get your annual accounts audited. Or alternatively, you can pay in the difference between your current capital stock (e.g. 2k) and the 25k minimum for the UG and then rename the company and "just" have to pay for the notary, publishing to public records, court, ...

preya2k

Not sure what he means with "2000€ share capital", which allegedly is locked. Typically, you can spend your "Stammkapital" for business purposes (e.g. in a GmbH). It doesn't need to stay in your bank account.

WaitWaitWha

I think most red tapes and bureaucracies have loop holes. For example, a different, simpler type of business type, then conversion to the actual desired type. At least, this has been my experience in a few countries I worked in. Sometimes it will cost more up front, but if the end result is significantly faster, maybe it is worth it. I am sorry he has to go through this just to start a business.

lifestyleguru

The only way to start a company in Germany is Societas Europaea and have lawyer parents. Otherwise don't bother.

KingOfCoders

(2026) 1.) Yes, it took 3 months to switch the company hq + IRS + Notar etc. 2.) But it really does depend a lot on the city, state etc. 3.) UG is 500 EUR - changing to GmbH is then also quite cheap

Lucasoato

Why so little? You are priviledged! Imagine 3 young Italians that would like to work together in a startup. Let's consider only the first year, imagine a B2B SaaS, they are incorporating but they'll work on the product and approach possible customers. Zero revenue. Well, if you followed the law, you probably would spend something between 23'000€ and 25'000€ in total. WITH NO REVENUE. This is because even if you work for free for your company, you still have to pay taxes for INPS, our pension system. And if someone invests in your company, you can't live out of nothing and would like to pay a founder even the minimum salary, YOU HAVE TO PAY INPS AGAIN. This is crazy, our country is a joke. EDIT: Adding a bit more of scary context and nice sprites. None of the common financial advisor you find in Italy have ever heard of funding ways or contract terms that are really well known globally. Do you want to include drag along and tag along clauses in your company statute? You have to talk with really expert lawyers and notaries in Milan that will bill you thousands of € for something that in Delaware is a pretty much standard single line of text.

FLHerne

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. > And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH The post itself explains exactly why the first complaint is a fallacy and the second one is true: > The simplest setup is a sole proprietorship [...] also makes me personally liable for everything. A client sues? They are not suing a company. They are suing me. My savings, my apartment, my name. > So I wanted real limited liability, which means a company. The liabilities of a limited-liability company aren't your risk. The people who stand to lose out if your company folds are not you but your customers, creditors and anyone else with a claim to more than the company can repay. The more capital it has, the less likely it is to collapse while having more liabilities than assets.

sph

Is it as tortuous to open a self-trader account with VAT ID, or is it just to found a company (the German equivalent of an ltd)?

InsideOutSanta

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. But it was his call. As the author has already pointed out, he could have started a sole proprietorship, but he did not want to take on that risk. The 25'000 is because it's not his risk if he starts a GmbH, it's the GmbH's risk. Also, the 25'000 are not a toll, it's the company's Stammkapital. The GmbH owns that money. And afaik, in Germany you only have to pay in half of the 25k.