1. Register your business
Before you set up a business in Germany, you must complete a number of formalities. These also depend on whether you want to work on a self-employed (gewerblich) or freelance (freiberuflich) basis. Freelancers must register with the tax office (Finanzamt). If you want to register as a self-employed entrepreneur, first contact the local trade office (Gewerbeamt). The Authority Finder (Behördenwegweiser) will guide you towards the authorities you will need to deal with and will tell you where you can find them in your area.
Please note: Dealing with various authorities is sometimes not easy. Nevertheless, you should try and utilise their support. Therefore, be prepared - this is the best way to be helped. Complete the formalities in good time. And: Don't be scared off by the bureaucracy and inform yourself in advance about mandatory registrations and approvals!
2. Pay taxes
When you set up a business in Germany, you usually also have to pay taxes to the tax office, i.e., to the local authority of Germany’s fiscal administration. The type of taxes you will need to pay depends, among other things, on your company’s size and legal structure as well as the amount of income.
In addition, you must submit an annual tax return for your business to your tax office, in which you disclose all earnings and turnover.
Tip: Seek advice from a tax advisor to avoid making mistakes and possibly incurring tax debts. The tax office will also help clarify tax-related questions.
3. Safeguard yourself and your company
Being self-employed also means that you need to take care of many things yourself. This includes your safeguarding yourself - for example, in the event of illness or unemployment - but also your company. Theft, burst water pipes, fire damage: Events like these are rare, but can quickly jeopardise the existence of a new company.
The start-up portal explains which insurances are important for you.
4. Inform yourself about the contracts and laws that affect you
From the lease agreement for your office space to product liability - as an entrepreneur in Germany, you are bound to have to deal with numerous contracts, laws and legal regulations. The big advantage is that if all business transactions are contractually defined, you are guaranteed a high degree of legal certainty.
You can find an overview of all the important laws and contracts that affect you as an entrepreneur on the start-up portal. Additional information will be provided by the Chambers of Industry and Commerce. If you need additional support, please consult a lawyer.
5. Fulfil your duties as an employer
If you would like to employ your own staff in your company, you must observe a number of rights and obligations. In order to be allowed to hire staff in the first place, you will need a company registration number. You can find out how to obtain this number and which steps still need to be taken on the start-up portal. Remember that as an employer in Germany, you are obliged to pay taxes and social security contributions every time you pay wages.
Of course, you will also need to observe a number of legal regulations in regard to your employees. For example, you must continue paying your employees salaries and wages even if they are ill; in addition, your employees have a right to annual leave. It is also important to note that employees cannot be fired without a valid reason, either. You should inform yourself well about your rights and obligationsregarding your staff.
BMWi Authority Finder
BMWi Overview no. 32: Special permits