Are you about to start up your new business? Here, you will find out about the formalities you need to take care of before you can start your operations. Also, we will give you a concise overview on your rights and obligations as an entrepreneur.
Before you can set up a business in Germany, you need to deal with the paperwork. First of all, it is important to know whether you are going to work on a self-employed (gewerblich) or freelance (freiberuflich) basis. Freelancers need to register with the tax office (Finanzamt). If you want to register as a self-employed entrepreneur, you will need to contact your local trade office (Gewerbeamt). The Authority Finder will guide you towards the authorities you’ll need to deal with and will tell you where they are.
Please note: You may find it challenging to deal with the various authorities. However, you should try and utilize their support. Make sure to prepare your meetings with the authorities well – that way, you’re likely to get the support you need. It’s important to get the paperwork done on time. Don’t be scared off by the bureaucracy, and find out beforehand which registrations and approvals you need.
If you are setting up a business in Germany, you will normally have to pay tax to the tax office, which is the local authority of Germany’s financial administration. Amongst other factors, the type of tax you need to pay depends on your company’s size and legal structure as well as on your earnings.
On the Startup Portal, you’ll find an overview of the various tax types. Please note that in Germany, you may have pay certain types of tax in advance on the basis of estimates, and that there are certain payment terms.
In addition, you will need to submit an annual tax statement for your business, which contains the details of all of your earnings and revenues. As you get started, it may make sense to consult a tax accountant to avoid making mistakes and incurring tax debt. The tax office will also advise you on tax-related questions.
Being self-employed means that you need to take care of many things yourself. This includes safeguarding yourself – for example in case of illness or unemployment. Here, you’ll find a concise overview on important insurances and old-age provisions.
Additional information is available on the website of the German Social Accidence Insurance.
Information for women: The E-training offered by the Startup Portal contains six lessons for aspiring female entrepreneurs on the most important steps in setting up a business. In addition, the E-training contains information personal coverage for female entrepreneurs (E-training is available in German only).
Theft, burst water pipes, fire damage: these kinds of events are rare, but they may jeopardise the existence of new companies. That’s why you should think carefully about the types of risk that are particularly dangerous for your business. The good news is that you can take out insurance for most of these risks.
Business liability insurance, for example, is relevant for businesses of all industries. It applies if your company or staff cause damage for third parties. If you have a company car, you will need to take out vehicle insurance, too.
Depending on your industry, location and product range, you may need to take out additional insurance, such as electronics insurance or buildings and contents insurance. An overview is available on the website of the Federal Ministry for Economic Affairs and Energy.
From renting out office space to product liability – as an entrepreneur in Germany, you’re bound to have to deal with numerous contracts, laws and legal regulations. In the beginning, you may feel like you’re surrounded with red tape, which can be very frustrating. However, think of the benefits: if there is a contract for every business transaction, you’re guaranteed high legal certainty.
An overview of relevant laws and contracts you will need to deal with as you set up your own business is available on the Startup Portal. Additional information will be provided by the Chambers of Industry and Commerce. If you need additional support, please consult a lawyer.
If you would like to employ your own staff, you will need to observe a number of rights and obligations. In order to hire staff in the first place, you will need a company number. To find out how to get a company number and what else to bear in mind, please refer to the Startup Portal. Remember that as an employer, you will need to pay tax and social insurance contributions.
You will need to observe a number of legal regulations as you deal with your employees, too. For example, you will need to continue paying salaries and wages even if your staff is ill, and your employees have a right to annual leave. It’s important to note that you can’t fire employees without a valid reason, either. You should make sure to find out your rights and obligations vis-à-vis your staff. The information provided by the Business Portal will point you in the right direction.