What do we know about Germany? A lot here are the top associations with the Germans:
- BMW – where would you go without this brand ☺
- Adult video. You can make jokes about Germans in these questions…
- Taxes on everything: air, water, education, and even driving on those same superhighways ☺
- German beer and, of course, Oktoberfest.
- The Klitschko brothers know German, live in Germany from time to time, and are the darlings of the German sporting public.
Business in Germany
Germany is one of the top 5 wealthiest countries in Europe. Germany’s budget has been running a surplus in recent years, indicating that the country has more money than it can spend.
According to an annual study by the World Bank, Germany was ranked 24th out of 190 countries in the “Doing Business 2019” ease of doing business.
At the same time, Germany has a shortage of foreign investment, so the government has introduced a unique program to attract investment, allowing non-residents to open and run their businesses much easier than before. The only thing the government requires from non-residents is paying taxes and not breaking the law.
If in 2012, foreigners could open a business in Germany only if a minimum of 250 thousand euros, but now open a business can be any law-abiding foreigner with an adequately drafted business plan approved by the local authorities.
The residence permit and citizenship in Germany
Although the residents of Germany pay crazy taxes, their standard of living is difficult to compare with us Ukrainians because they can easily afford to buy a car or go to some Mediterranean resort.
Anyone who has ever thought about a residence permit in Germany must know that starting or buying a business in Germany multiplies the chances of non-residents getting a residence permit and citizenship.
The German Residence Act describes the basics of doing business with foreigners. This law confirms the right of foreign residents to obtain a residence permit in Germany for three years if their business is booming in the country.
If your business continues to flourish, you will likely be allowed to obtain permanent residency and citizenship in Germany. And then you can easily buy yourself a brand-new BMW .
Company registration in Germany
So, you have thought about a residence permit, and now the question has risen, “So, how to open your own business in Germany?” Nothing supernatural from you will be required, just a tiny piece of time and, of course, the desire.
And so, here are a few conditions under which you can register a company in Germany:
- You must know clearly that the region where you want to register your business – needs you and will be economically viable.
- Your business only has to have a positive impact on the economy. Don’t even try to go anywhere without a business plan if you want to do something spy and destructive. Germans are not only punctual but also very picky and calculating. So prepare in advance and calculate everything to the penny
- The availability of project funding, and most importantly, the confirmation of these funds, will help you get the “green light” to register your project.
Here are a few solutions for a non-resident to open a company in Germany:
- Get a residence permit in Germany
- Hire staff and rent an office
- Buy an existing firm.
- Hire a CEO with a residence permit in Germany
- Get non-resident access to stay (residence permit)
In Germany, almost all small businesses have the status of LLC. All you need to register your business is an authorized capital of 25k euros. You can either register the company directly or through intermediaries who work with the German Chamber of Commerce and Industry.
The procedure for registering a business in Germany
Anyone wishing to open a business in the territory of the Germans must go through, let’s say, a few circles… or instead 8 points:
- Open an account in a commercial bank. We are always glad to help with the opening
- Draw up the articles of association of the company and legally certify it
- Register these articles of association at the Commercial Court Registry Office in the place where the company is established
- Obligatorily notify the local business administration office of the registration of the company.
- Enter into a social security agreement.
- Obligatorily notify the Labor Office of the establishment of the company
- Search for and register employees with the social security system
- Send all documents and references (all of the above) to the local office of the German tax office
Keep in mind! That in Germany is very, well, very vigilant moments on the organization of labor, Sots. In the face of the enterprise, insurance and performance by you, of their labor obligations. And do not let you …, not to carry out all the procedures for the legal registration of the employee. Fines, fines…
Business Taxes in Germany
- VAT – 19%
- Income tax – 14% (of the total income received)
- Industrial business – its tax on income: from 7 to 15%
- Corporate tax – paid by all founders of legal entities – 15% of gross profit
- Capital Gains tax derived from sales of German or foreign subsidiaries has a preference and is exempt from 95% tax.
Tax period and VAT reporting in Germany
The tax year coincides with the calendar year. The entrepreneur must file an electronic pre-tax declaration quarterly by the 10th day of the following month and pay the tax. If the input tax exceeds the VAT, a refund is paid. If the tax for the previous calendar year was more than €7,500, declarations are required to be filed monthly.
Dividends on business in Germany
Dividends from a German company (from resident and foreign companies) are exempt from 95% tax (the exemption does not apply if banks and financial service institutions hold the shares for trading purposes). Minimum shareholding requirements may apply.
Our team is ready to provide consultation on these issues. Our business hours: Monday to Friday, 9:00 AM — 7:00 PM. Contact us via WhatsApp, Telegram, or Viber, or submit an inquiry through our online form.
