HN Gopher Feed (2017-10-12) - page 2 of 10 ___________________________________________________________________
How to Set Up a Company in Germany for English-Speaking People
146 points by shapiro92
https://blog.datacircle.io/2017/10/11/setting-up-company-in-berlin/___________________________________________________________________
0xfaded - 4 hours ago
Countries in Europe now offering start-up visas (without major
capital requirements): - Denmark - France - Italy -
Netherlands - Spain - Portugal - Lithuania - Estonia -
Austria - Sweden I'm currently applying for Denmark. Invest
Denmark has offices all over the world (including Palo Alto) and
will be more than happy to assist you through the process.I've been
in SV for 3 years, but never went for the green card. The US won't
let me stay, so I guess I'll have to go suppress wages somewhere
else.
[deleted]
gibasmaciej - 5 hours ago
4-5 weeks ?!
[deleted]
flexie - 5 hours ago
How does a buyer know that there are no hidden liabilities in
your GmbH? Does it come with your personal representations and
warranties securing that?
Xylakant - 5 hours ago
A GmbH would need to have proper accounting, all liabilities
would have to be in the books. Anything else would be fraud and
that?s one of the things that suddenly pierces the veil of the
limited liability for the CEO (whether you can extract any
money from the seller is a different, albeit related question)
Do your diligence. You could also make the personal liability
part of the sale. On the upside, buying a used GmbH may come
quite a bit cheaper if the company owns no assets: the initial
25k are not a minimum that needs to be kept, they can be spent
on things the company needs, so you might be able to pick up an
empty shell for far less than that amount.I?d not buy a GmbH
from a random person on the Internet, but if you?re in a hurry
to get a GmbH set up, there are notaries and lawyers that
specialize in selling ready-made GmbH shells.You?d still have
to get the sale notarized and probably need to jump through a
few hoops to rename the company to something suitable, but
there are a few reasons that may be attractive, primarily that
it offers limited liability from day one. Quite a few people
forget that in the intermediate phase between notary and
confirmed registration (GmbH in Gr?ndung) the shareholders are
personally liable for all businesses and contracts that the
company enters into.
martinald - 4 hours ago
What a giant pain in the ass compared to a UK incorporation. Takes
about 5 mins, ?15 and less than a day to form.You can also sign up
for taxes online in a few clicks.
ivan_gammel - 5 hours ago
The Very Important Question is how much time and money it takes to
close the company, not how to open it. Not all startups are
successful, so it always makes sense to think about the shutdown.
shapiro92 - 5 hours ago
you have to continue doing taxes for another 3 years if I am not
mistaken. Depending on your accountant that would be around 1k
per year.
daftmonk - 4 hours ago
Just want to note that if you're not tied to Germany in particular,
Netherlands is a much better option for US citizens looking to
start a company, thanks to the Dutch-American Friendship Treaty.
(yes, it's DAFT - https://en.wikipedia.org/wiki/DAFT). NL is a
pretty easy place to business, at least as an entrepreneur. (Things
get more complicated with lots of employees, like in most of
Europe.)The tl;dr version is US citizens can get a residency permit
(2 years, renewable indefinitely, considered a non-temporary
purpose of stay so you're eligible for permanent residency after 5
years) to start a business in the Netherlands with very few
restrictions and very little in the way of capital requirements
(?4500 in the business account.) Plenty of attorneys in the
Netherlands can take care of the necessary paperwork for ?1500,
give or take, but lots of people manage it themselves too.A few
blogs and guides of the many out
there:https://daftvisa.wordpress.com/step-by-step-guide/
https://survivingdaft.tumblr.com/ http://passthesourcream.com/daft/
beagle3 - 1 hours ago
Will the Dutch actually let you manage your finances if you are a
US taxpayer? Many countries will now limit US tax payers to
checking accounts exclusively, sometimes blocking money transfers
and stuff - thanks to FATCA.Furthermore, US taxpayers have crazy
FBAR/FATCA reporting requirements about any money you have
signatory rights outside the US, even if it isn't their money -
to the point that having e.g. a CFO with a US citizenship -- even
if they never set foot in the US -- is becoming a serious
liability for a company.
atupis - 3 hours ago
Estonia is also good option https://e-resident.gov.ee you can do
everything remotly
archagon - 4 hours ago
Have been seriously thinking about doing this, but the residency
requirements give me pause. (You must always have a mailing, non-
PO-box address in NL ? essentially, your own place ? and have to
stay in the country 6 months out of a year, though apparently
it?s not really enforced.)In Europe right now and maybe 25-75 on
just pulling the trigger... who knows if our so-called president
ends up doing something stupid that blows up this treaty? No
other easy paths to residency in the EU as far as I?m aware!
CalRobert - 10 minutes ago
Well, there's always the whole "get a job" path. If you're
single you might find a European partner which helps.If you're
a US citizen another temporary option (but among the easiest)
is to get a working holiday visa for Ireland. I believe it's
the only EU nation offering working holiday visas to the US. I
probably wouldn't bother with it if the DAFT were an option -
when I got one it was much earlier in my career.Not sure how
the residency requirement is a bad thing? NL is pretty nice as
I understand it. Incidentally, this blogger did the DAFT and
describes their experience: http://shawnindutch.com/
archagon - 7 minutes ago
Yeah, I've read that blog! Very useful. I'm sure NL is
wonderful, but I can't quite commit to living there full
time. For one, all my friends and family live in California.
It would be very hard to justify paying rent on an empty
apartment for half the year just to keep qualifying, and I
would surely get lonely in any case. (Although, I guess I
could Airbnb it out if there are services that can do the
landlordy bits while I'm away. It would be hard to set this
up ahead of time, however. Even finding a regular, un-Airbnb-
able NL apartment without the NL SSN-equivalent is a bit of a
Catch-22, since most apartments require the SSN but applying
for DAFT is what gets you the SSN in the first place. And you
can't apply without a mailing address, as far as I'm aware.)
eastendguy - 1 hours ago
There is the blue card http://www.bamf.de/EN/Infothek/FragenAnt
worten/BlaueKarteEU/...Essentially all you need is a normal IT
job above a certain threshold
archagon - 1 hours ago
Sorry, I forgot to add ?...for a self-employed person?.
jorvi - 4 hours ago
Not only that, we are considered the best non-native English
speakers of the world, so even if you aren't keen on learning
Dutch (boo!) you'll manage pretty easily :)
astrange - 2 hours ago
They're also all taller than you, so you'll have to get used to
looking up.
ant6n - 3 hours ago
The Dutch are also great at German!
Freak_NL - 3 hours ago
Only in as far as our languages are similar (they are more
closely related than either of them is to English). A lot of
younger Dutch are quite limited in the languages they speak;
often just Dutch and passable English. Don't expect people
under 30 to be able to read a German newspaper
comprehensively or hold a conversation beyond ordering beer
in a Biergarten when in Germany. Older generations with a
tertiary education degree often can speak and read at least
either French or German at a more useful level though.
pwagland - 2 hours ago
While this may be true, you will find quite a reasonable
number of people who can speak non-English foreign
languages quite well, and that excludes the foreign
nationals that come to live and work in the Netherlands as
well.If you wanted to serve a largely German speaking
clientele, then you could reasonably expect to get a decent
number of applicants in the Netherlands in my experience,
especially in the border regions. The kids here are still
learning German and French in school, and while they might
speak it less, there are still plenty that go there
regularly.
sarabande - 3 hours ago
I looked this up to make sure [0]; it's true, and the countries
with a "very high" proficiency are: 01 Netherlands 02
Denmark 03 Sweden 04 Norway 05 Finland 06
Singapore 07 Luxembourg 0: http://www.ef.com/epi/?mc=we
Geekette - 1 hours ago
I question the validity of "global" rankings that don't
include regions like East, West or South Africa, where
countries like Kenya, Ghana, Nigeria, South Africa have very
high English proficiency rates (especially given that it's
also an/the official language in most cases).
oblio - 1 hours ago
I think the point of those ranking is ESL. So if English is
an official language, you're out ;)
[deleted]
earlybike - 2 hours ago
Before setting up companies in a different countries than where you
live: This can get very messy and you should either have the
company in the country where you live or live in a country which is
very tolerant (tax-wise) about having companies in other
countries.On a secondary note: Germany is the worst country to
incorporate: bureaucratic, expensive, tax offices are expensive and
stuff is complicated, worst privacy regulation to come (from a
company perspective), Labour is expensive compared to their skill
level and English skills.One good thing though: since share
transactions are done with state notaries there is more safety when
doing them and less need for lawyers for simple transactions. For
more complicated transactions with higher funds it gets expensive
again. The Articles of Association must be German, the rest can be
in English.
nik736 - 4 hours ago
You can also found the GmbH with 12,5k EUR instead of 25k, which
makes much more sense than going the UG route.
shapiro92 - 3 hours ago
A few cents from my side, setting up a company like GmbH or UG
helps when you target a German market. Germans are like that, they
love to see the GmbH after the name of the company that they own or
they buy / collaborate with.Now an UG is young in comparison to
GmbH, it is slowly being accepted.
weinzierl - 3 hours ago
Incorporating as a GmbH is the most common way to start a company
in Germany (about 40%). The UG form is not very common (about 9%)
and especially if you plan to do business with other companies in
Germany I would not recommend it, because UGs are often frowned
upon.Founding a GmbH is not only relatively expensive, it also
takes time. Many founders avoid incorporating themselves but
prefer to buy a new GmbH. This is actually a business here, there
are companies that keep a pool of fresh GmbHs and sell them to
founders. Search for 'Vorratsgesellschaften' if you are interested
in going that route.
k__ - 6 hours ago
Is this even necessary?Can't they simply set up an LTD in Ireland
and "use" it in Germany?I know some Germans who did this for tax
reasons, but I could imagine that Ireland formalities are easier to
understand for English speakers.
gwbas1c - 6 hours ago
I've found that it's always easier to follow "normal" routes
until you know what you're doing. In the US, the equivalent is a
Delaware corporation. Companies typically incorporate in the
state they operate in when they are small and the owners are more
concerned about running their business. Reincorporating in
Delaware happens when companies are large enough to hire someone
to handle the paperwork.
ringaroundthetx - 5 hours ago
> Reincorporating in Delaware happens when companies are large
enough to hire someone to handle the paperwork.right, all
$200/yr worth of work.anyway, Europe is full of little hamlets
that offer convenient incorporation services.
Xylakant - 6 hours ago
You can do that, but then you?ll have to deal with Irish Tax law
and if you want to pay yourself a wage you?ll be employed by an
Irish company. This will lead to it?s own set of complications.
You?ll probably need a bank account in Ireland etc. If you?re
selling things in germany you?d still need to collect German VAT
depending on whether your customer is a company or a private
entity, ...Registering a British LtD used to be common when the
UG didn?t exist and you?d need at least 25k for a GmbH to get
limited liability, but it?s fallen a bit out of fashion since
then.
Sujan - 5 hours ago
And now there is a Brexit looming... Poor LTD owners :/
Xylakant - 5 hours ago
No pity from my side, but yes. Some folks will pay a hefty
price for the shortcut.
phillc73 - 5 hours ago
Another shortcut, while still remaining in the EU is a
Maltese Limited company. Very similar rules and structure
to operating a UK based Limited company, but a much better
corporate tax regime.I went this route, using an accountant
recommended by a trusted friend. Bought an existing "off
the shelf" company and have a Maltese business bank
account, all without leaving the comfort of my desk.
charlesdm - 5 hours ago
Have you physically been to Malta? Do you pay non Maltese
taxes? Do you understand tax law? If no then it is likely
you are committing tax fraud (perhaps without even
realising it).People need to understand this: there is no
free lunch. If you think you can be classified as a
Maltese company, sitting at a desk in
European country here>, you are dead wrong in 99.9% of
the cases. Get proper tax counsel (not an accountant, a
lawyer -- accountants are generally sloppy with details,
and details matter, e.g. a word in a contract can
matter).Technology and internet based businesses have
some unique opportunities to optimise taxes, but the line
between fraud and optimization is quite thin.. get good
counsel, or prepare for a dispute where you take your
(local) tax authority to court.Source: a decent knowledge
of corporate and tax law and plenty of tax disputes,
which I've mostly won.
a-saleh - 4 hours ago
If I am thinking about something like this (my reason so
far is fairly contrived, but I would really like to use
Stripe, that is available i.e. in Ireland, while in mz
country, it mostly seems to be paypal/braintree), where
would I be able to read-up on gotchas, before I consult a
proper lawyer?
charlesdm - 4 hours ago
You probably want to consult a (reputable) local tax
lawyer. They tend to be expensive, but check
legal500.com.
phillc73 - 4 hours ago
Thanks for your concern, but I am very happy with the
professional advice I have received and am entirely
confident that no tax fraud is being committed.
graeme - 4 hours ago
I read your comment, and the feedback you?re replying
to.I notice that you have not mentioned the word
?lawyer?. Instead you said accountant and professional.
I?m going to write the rest of this on the assumption you
have not spoken to a tax lawyer.You?ve set up a structure
for years, and are likely investing tens or hundreds of
thousands in equity.A consultation with a good tax lawyer
can be had for $100-$200 in most cases, or even free
sometimes.Your situation might be 100% correct! In which
case, you have spent very little.But if your situation is
wrong? You risk the total destruction of your business,
tens of thousands in penalties and legal fees, and
possibly jail.Speak to a lawyer, if you
haven?t.Incidentally, I had the same idea as you:
Canadian business, international clients. Could I
incorporate abroad and save? My tax?s lawyer?s answer was
no, the local revenue authorities would not see it that
way.You?re in another jurisdicion, so the plan may work.
But, you will spare yourself the possibility of ruin by
checking with a tax lawyer in the jurisdiction you live
in.
charlesdm - 3 hours ago
You're not wrong. I have a friend who used to work at PwC
essentially handling tax avoidance tactics for clients,
and she recently switched to a reputable accounting
office due to unhealthy work pressure.She's knowledgeable
and is clearly aware that the advice being given by her
current accounting office is much worse (and often
incorrect) in comparison to the advice given by people at
her previous job.They're excellent at handling
accounting, but not good at structuring (non local)
things and avoiding tax.
Keats - 4 hours ago
How do you get around corporate tax residence?
charlesdm - 4 hours ago
Just make sure to have good legal counsel. Because
something is "legal" for person X doesn't make it legal
for person Y.A wealthy family with a company that employs
1000+ people will generally get away with more than a
lone wolf with no political connections (not that I'm
saying you're a lone wolf, just saying it's not always
clear cut). Best of luck!
Xylakant - 4 hours ago
You?d also have to obey the bookkeeping requirements of
the companies country of origin. For example in germany
the line between paying yourself a wage and ?verdeckter
Gewinnentnahme? is important (you can?t just take money
out of an LtD) and it?s important to understand the host
countries law. When things start to go haywire you?d need
to hire an expert in Maltese law and that may just be
very expensive from the comfort of your desk. You might
also in addition require an expert in German tax law on
top of that. I?d avoid that.
charlesdm - 4 hours ago
There are also differences between pure emoluments and
traditional board meeting or director fees, etc. You'll
have to check the DTA between your country and Malta.In
addition, (Maltese) social security might be due on
salaries received, or could be exempt.
Sujan - 5 hours ago
"Funny" that the "bank" that is suggested in the article is
one of them: https://www.getpenta.com/imprint.html
shapiro92 - 4 hours ago
they were part of an accelerator in the UK probably due
to that.
shapiro92 - 5 hours ago
Guys I just released it also on ProductHunt!
https://www.producthunt.com/posts/how-to-setup-a-company-in-...
Scotrix - 5 hours ago
Don?t start a company in Germany if you don?t have to. Expensive
and bureaucratic tax system (accountants and time wise), regular
accountancy checks which you have to pay your accountant for, very
hard to close down and insolvency is very complicated.
mannigfaltig - 4 hours ago
[deleted]
exhilaration - 4 hours ago
Because it protects entrenched players?
claudius - 4 hours ago
It doesn?t really stifle innovation in any way?
eastendguy - 4 hours ago
Is this hearsay or your experience? "regular accountancy
checks"... I even forgot when our last one was...maybe 5 years
ago. And this seems is typical.
matt4077 - 4 hours ago
Meh... It's not quite as easy as one might wish, but I haven't
seen any business where it had any significance. If you're small,
it's about $300 to start and maybe around $500 for an
accountant.It get's more complicated once you have employees, but
even that's not relevant compared to almost any other aspect of a
business. I think we're paying EUR30 per quarter for managing the
employees taxes and various benefits.If you're doing GAAP
accounting, you're 95% done with taxes as well. And since these
standards have converged over the years, the only difference in
bureaucracy that remains is people's enduring stereotypes.
bflesch - 5 hours ago
Yeah it is very bureaucratic indeed. If you want to raise money
or add shareholders you need to make official appointments w/
lawyers and pay significant fees.
devdad - 5 hours ago
Is that correct, ?25000 to start a GmbH? The Swedish equivalent
(AB), probably some differences, costs ~?5000.I think the
registration cost another ~?150.
beberlei - 5 hours ago
It is not a fee you have to pay, you have to guarantee this
amount of capital, sort of as a signal to other companies in the
market what solvency to except at least :-)You can actually spend
the money on things after the court verified the capital is
present with your corporate bank.
devdad - 4 hours ago
This is the same as an AB. Many start by having ?5000 and then
selling things they own such as computers to the AB, to get the
funds "back". I think Sweden changed from ?10000 to ?5000 a
couple of years ago.If the UG or GmbH goes belly up, am I in
any way personally responsible?
Xylakant - 3 hours ago
The point where you?re selling private property to your
company is the moment you really really really want to talk
to a good tax accountant in germany. If you sell above
reasonable price it?s considered tax fraud (verdeckte
Gewinnentnahme) and the reasonable price is likely to be a
point of contention between you and the tax authorities.
Unless you haven very valuable machinery you want to place
into the company it?s usually not worth it and in this case
you?d want a third party to certify the price. You can,
however, pay yourself a reasonable wage and there are pretty
clear guidelines on what?s considered reasonable. Much
cleaner and easier.Personal liability is a bit a complicated
topic. If you?re a pure shareholder, your liability ends with
the value of the shares. If you?re at the same time the only
shareholder and the CEO and only employee you can be liable
for quite a few things. (Social security, taxes, damages for
your personal actions, anything that constitutes fraud, ...)
charlesdm - 26 minutes ago
This is simple and applies to most (Western) jurisdictionS:
don't sell anything to a company you own or control, at an
above market rate.Now, there are many ways to value
something, and there is generally some room for
interpretation on how much to charge exactly. But you will
need to find a way to justify the price at which a
transaction was concluded.With IP it gets a bit blurry
(e.g. you might own some trademarks you want to transfer to
your new company), but again, there are a ton of perfectly
acceptable ways to value something and not face the wrath
of your local tax collector. Just make sure you have a
reasonable valuation, based on objective facts, and you'll
(mostly) be fine.
explodingcamera - 5 hours ago
You can start a UG which is essentially the same as a GmbH for as
few as 1?
ohthehugemanate - 3 hours ago
German business owner here. The accountants and tax lawyers
here have all told me the UG is looked on with suspicion by the
tax authorities.Don't start a company in Germany. Don't take it
from me, take it from the World Bank, which ranks Germany 114th
in the world for ease of starting a business. Just narrowly
edging out the Dominican Republic.It sucks.
bflesch - 5 hours ago
You need 12.500? in the bank to start the GmbH. But you might be
liable for another 12.500? (to reach full 25.000?) if things go
south.
jononor - 4 hours ago
You must maintain this amount of capital at all times, or
otherwise start insolvency procedures.
Xylakant - 4 hours ago
That is not true at all. You need to have that initially in
the bank but you can absolutely spend it on whatever the
company needs - services, wages, things. You can absolutely
have a GmbH or UG without any cash left.
devdad - 4 hours ago
Is the finances of a UG/GmbH public information in Germany
and easily obtained by citizens?
Xylakant - 3 hours ago
You need to file an end of year statement (Bilanz) with
the register court the year after and these can be
obtained for a moderate fee. The exact details on what
needs to be filed depend on the size of the company,
details (in german) are in this article https://www.gmbh-
guide.de/jahresabschluss-bundesanzeiger.htm...
rhblake - 4 hours ago
Just to be clear, you don't pay the gov't ?5000 to start a
Swedish AB, but you need a minimum of ?5000 share capital.If you
want to be a sole trader (enskild n?ringsidkare/enskild firma)
you need zero capital and the registration cost is zero (costs
about ?100 to register a company name but that's optional) and
everything can be handled online, although if you're not a
Swedish resident you'd need a temporary personal number from the
tax agency first.
devdad - 3 hours ago
Thanks for clearing that up, I now realize I was being
misleading.
jankotek - 6 hours ago
> A GmbH requires a minimum of 25 thousand eurosSimpler advice; buy
a ticket to Bratislava and take it from there.
dullgiulio - 5 hours ago
Easier still, do it online in Estonia.
patkai - 5 hours ago
Yes, the e-residency is extremely cool and forward looking. And
you don't even have to travel there, only to one of their
embassies.
beberlei - 5 hours ago
That is the initial starting capital, not a fee. You can go on
and invest or spend the money after court verified its available.