Starting a business in Germany

Registering a company in Germany

Business registration
An entry in the commercial register may be mandatory or volunteer. The entry (in German: "Anmeldung") is mandatory for larger companies. The number of employees and their qualifications, the services provided, the turnover and some other legal requirements are all factors depending on which the registration of a business may be mandatory.

There are some legal consequences of registration in the Commercial Register. One of them is that you must advise the local trade licensing office of your company's activities.

The majority of these offices require a report to be filed personally. In bigger towns, offices offer business registration forms thatyou can find on their website.

If you speak German, you can get a valid help with forms via the Economics Ministry's business start-up software package (Softwarepaket für Gründer und junge Unternehmer). You can download the version 9.3 on their website.

Legal structures for companies

There are many possible business structures, depending on different factors, as for example the dimension of your business or whether you start up on your own or with business partners. here you can find some examples of German companies' structures:

  • Sole trader (e.g. businessperson or professional);
  • Registered trader ('e.K.' in German, it means "Eingetragener Kaufmann");
  • Limited liability company ('GmbH' in German, it means "Gesellschaft mit beschränkter Haftung");
  • Civil law partnership ('GbR' in German, it means "Gesellschaft burgerlichen Rechts");
  • Private limited partnership ('KG' in German, it means "Kapitalgesellschaft");
  • Stock corporation ('AG' in German, it means "Aktiengesellschaft");
  • General partnership ('OHG' in German, it means "offene Handelsgesellschaft");

Trading concern (with limited liability);

By the choice of the structure for your business we strictly recommendedyou to consult a lawyer or a tax consultant. This is because plenty of very important legal and tax differences among them occur.

German social security registration

 

Even if no one probably expect the Social Securuty Act to apply in Germany, for an American or for any non-European company the social security system in Germany could still represent a very different constellation from the each national social security system. You are better to ask a German tax consultant (we hope this internetsite may help you for this) if you do not want bad surprises. In general, employers have to calculate the sickness, healthcare, pension and unemployment insurance contributions for their employee and report and pass these to the German employee's sickness insurance schem. This schem is backed up with proof of contributions. The social security contributions are paid half by the employee and half by the employer , unless your employees work less than 15 hours a week. These special cathegory of workers are called in Germany "geringfügig Beschäftigte".

You may find some very interesting information (in English)about starting up a business in Germany on the website of the German Ministery for Technology and Economy .