How to Sell on Amazon Europe From the US
Learn how to sell on Amazon Europe from the US with our comprehensive guide.
Thinking about starting a business in Germany? The country’s robust economy and central location within Europe make it an attractive destination. However, navigating the legal and administrative landscape can be daunting for those unfamiliar with the German system.
There are specific requirements to consider, such as obtaining the right visa, choosing the appropriate structure for your business, and understanding tax implications.
Navigating the complexities of starting a business abroad just got easier. Check out the Wise Business account - Easy to set up, easy to use. | |
---|---|
Germany, a powerhouse in the European economy, offers a wealth of opportunities for foreign entrepreneurs. However, navigating the legal and bureaucratic landscape can be a daunting task.
The World Bank's Ease of Doing Business index ranks Germany 125th out of 190 countries for the difficulty of starting a business—underscoring the need for careful consideration and expert guidance.1
Before getting into the process and covering the initial steps let’s figure out whether you can even start a business in Germany as a foreigner.
Yes, you can start a business in Germany. The country accepts foreign entrepreneurs, but the process can vary depending on your nationality and business model.
For foreigners, including individuals from other countries and self-employed international freelancers, obtaining a residence permit is the first step, which involves demonstrating your business's viability and potential contribution to the German economy. Once your residence permit is approved, you’re ready to tackle the other steps of business registration.
Getting your business in Germany can be done in a few steps. Let’s look at the 5-step process for starting your business:
Your business and tax registration process will depend on your category. For example, freelancers will primarily register with the tax office, while self-employed entrepreneurs will register with the local trade office and obtain a trade license (Gewerbeschein).3
The cost of registering a company in Germany varies depending on the chosen legal structure. It can range from €20 to €50 for a sole proprietorship to €2,000 to €3,000 for a limited liability company (LLC). These costs include registration fees, notary fees, and potential legal and consulting fees.
Here are some key costs to consider based on your business:
💡 Lower the costs of setting up a business abroad with Wise. |
---|
Understanding Germany’s legal framework is essential for a smooth and successful venture. Some of the key documents and legal requirements include:
Beyond these requirements, your business will have additional legal requirements depending on the business structure you choose.
Germany offers various legal structures for businesses, each with its advantages and requirements. As a foreign entrepreneur, understanding these structures is crucial for making an informed decision that aligns with your business goals and financial capabilities.
Germany offers various legal structures for businesses, each with its advantages and requirements. The most common types include:6
Sole Proprietorship (Einzelunternehmen)
Partnership (Personengesellschaft)
Limited liability Company (GmbH)
Entrepreneurial Company (UG)
Stock Corporation (AG)
Note the actual registration process varies based on the chosen structure.
Beyond the basic registrations, various business licenses and permits may be required depending on your specific industry. These could include:
For example, a restaurant may need a food handling license, while a construction company may require building permits.
No, if you're a non-EU citizen, you'll need a residence permit for self-employment. It's required for freelancers and entrepreneurs looking to do business in Germany.
The requirements for obtaining this permit include:2
Initial permits are usually granted for a set period, with the possibility of extension or obtaining a settlement permit if the business is successful.
As a foreigner looking to start a business in Germany, you might need a visa. The business visa in Germany is known as the Schengen visa. This visa is your initial entry ticket, allowing a 90-day stay for business planning and setup.
However, you might not need a business visa to set your business up. Residents of over 60 different countries, including the US, are permitted to enter Germany visa-free and remain there for 90 days.7
If you do need to get a Schengen visa, you’ll need various documents to apply, including:
Visa fees vary depending on your location and visa type, but the Schengen costs €90 and takes 10-15 days to get.
Opening a business bank account in Germany is a must for foreigners. It facilitates transactions, simplifies tax management and adds credibility to your venture. However, the process can be complex for non-residents due to additional documentation and scrutiny.
Each structure has specific requirements for opening a bank account. For example, a GmbH requires notarized company formation documents, while a sole proprietorship might need proof of freelance registration.
Here are some essential tips for opening a business account as a foreigner:
Some banks specialize in serving international clients and offer English-speaking support. Research various banks and compare their fees, services, and online banking features.
Starting a business in Germany comes with unique challenges, especially when it comes to finances. As a foreign business owner, you'll need a solution for managing multiple currencies with minimal stress.
Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 160+ countries.
Wise Business offers a versatile and cost-effective solution to simplify your financial operations in Germany.
With Wise Business, you can focus on growing your business in Germany from the get go, without the burden of unexpected hidden fees.
🔍 Read the guide on how to open a Wise Business account |
---|
Getting a German business account can take time and require in-person appointments, but with Wise Business you can register online, and get Euro account details with ease.
The HRB Certificate, also known as a certificate of good standing, confirms your company's legal existence and good standing within the German business registry. It details a company's name, registration number, registered office, business address, branches, activities, directors, and issued share capital.
You can get an HRB Certificate from the German Handelsregistereintragung. It takes roughly 2-3 days to get and costs £300. You can also get an HRB from the court with an Apostille, which takes 15-20 days and costs £500.4
Starting a business in Germany as a foreigner requires careful planning and adherence to legal and administrative procedures.
Here are some useful resources for further reading before embarking on your new business in Germany:
🔍 Looking to hire employees in Germany? Read the guide to employee benefits in Germany next. |
---|
Sources:
All sources checked August 2024.
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
Learn how to sell on Amazon Europe from the US with our comprehensive guide.
Learn how to start a business in Portugal as a foreigner with our detailed guide.
Explore the steps to starting a business in Brazil as a foreigner. Understand the legal framework, necessary documentation, and local market insights.
Unlock the secrets to starting a business in Italy as a foreigner. From legal guidelines to cultural tips, find everything you need to establish your business.
Discover the essential steps and requirements for starting a business in Spain as a foreigner. Learn about legal procedures, visas, and helpful resources.
Learn everything you need to know about foreign entity registration in California. Our comprehensive guide covers legal requirements, necessary documentation, a