August 01, 2018
Germany is seen by many as the powerhouse of Europe. With its stable economy and its growing property investment opportunities, it will come as no surprise why many look to Germany when looking to set up a successful business.
The German economy is the largest in Europe and with its excellent proximity to other countries, Germany is a great place to set up a business. With its attractive business locations, the country recorded a 6-year growth high in 2017 and the economy still remains Europe's biggest this year according to the GTAI.
If you’re wanting to know why Germany is a good real estate investment opportunity, check out our article on: Good investment opportunities in Real Estate - Germany >
Top Tips for Setting up a Business
That being said, as with any investment opportunity, you must seek advice from the property experts before setting up a business in Germany, especially if you are not familiar with the Germany market. Some of our top tips include:
Set up for success
Before you set up a business in Germany there are a number of requirements that you need to adhere to in order to get your business off to the right start. One of the first things you need to do is register your planned activity, in this case it will be to start a business in Germany with the local trade office or the tax office depending on if you’re working as a freelancer or self-employed.
Other requirements for setting up a business in Germany state that you’ve never been banned from practicing the profession that you are wanting to set up and to prove that you do not have a criminal record. To find out more about how to set up for success in Germany, contact EW Real Estate today for more professional advice.
Legal structure of your business
Before you set up a business in Germany, you must decide which legal structure your company will take. The legal structure options include:
- Gesellschaft mit beschränkter Haftung (GmbH): The equivalent of a limited company
- Aktiengesellschaft (AG): A joint stock Company. This requires a minimum of 5 member and €50,000 starting capital
- Offene Handelsgesellschaft (OHG): All partners have liability and operate the business within a contractual agreement
- Kommanditgesellschaft (KG): General partners with Unlimited liability
- Einzelunternehmen: Owned and ran by one owner
Like most countries when you set up a business in Germany you will need to consider the taxes you will have to contribute towards. In Germany you will have to be aware of different taxes that will concern your business that includes the municipal trade tax (Gewerbesteuer), the value-added tax (Mehrwertsteuer), the income tax, Solidarity surcharge, church tax of your employees and you may also be subject to Corporate tax (Körperschaftsteuer).
The Municipal Trade Tax - In Germany known as the Gewerbesteuer, this is applied as a tax on the profits of a business, this is the most important original source of income for cities and towns in Germany.
The Value Added Tax (VAT) - In Germany known as the Mehrwertsteuer (MwSt) which is currently 19% on most goods in Germany.
The Corporate Tax - Known in Germany as the Körperschaftsteuer, which is currently 15% of earnings.
If you’re looking for more information on taxes and how it will affect you setting up a business in Germany, visit the Expatica website here >
If you’re a business entrepreneur and already have successful companies set up outside of Germany, you may think the process is straightforward. Although Germany has plenty of business opportunities, it’s important to consult the experts about any additional costs, taxes and hidden extras that you may not otherwise be aware of.
Find a home for your Business
Once you have considered the legal requirements to set up a business in Germany, you must now find the perfect location to set up your company. At EW Real Estate we are the property experts, we have a variety of commercial and business property to suit all. Check out our latest commercial properties for sale >
Find the right professionals
If you're new to the German market, you must seek advice regarding legal, account, and other real estate information that will affect how your business is essentially set up. Here at EW Real Estate we specialise in everything property, if you have a question we will have the answer. So if you are looking to set up a business in Germany, contact the experts on: +49 30 47365973 or email us on: firstname.lastname@example.org