Setting up a business in Germany

A Strategic Roadmap

Watch our video about the important factors when setting up a business in Germany:

Understand Your Market: Start by getting a clear picture of where your potential customers are located. Evaluate the infrastructure, business climate of each federal state. This will help you pinpoint the regions that best align with your business goals and choose the best business location in Germany for your needs.

Know the Regulations: Germany has complex regulations, so it’s important to understand the legal landscape. A number of activities in Germany are considered monitored activities or require a special license. The requirements for getting those licenses may vary from state to state. You need to carefully study this matter: what licenses or permits are required for setting up your business in Germany and what are the requirements for them.

Evaluate Tax Implications: All corporations in Germany must pay taxes. This taxation includes three components: corporate income tax, a solidarity surcharge, and trade tax. Trade tax rate varies across Germany, but don’t let that be your sole deciding factor. Analyze the tax structures and the ease of moving money in and out of the country.

Assess Resource Availability: Check the availability of essential resources such as raw materials and labor. Germany has a shortage of skilled labor and it is crucial to understand your needs prior to choosing the location of your future company. You can also plan to bring your own staff to Germany. We’ll be glad to assist you not only with planning and opening a business but also with legally bringing your staff from your home or another country. 

Plan Your Legal Structure: There are many factors to consider when setting up a business in Germany. Company form, such as UG or GmbH. Do you want to open an independent company or a subsidiary? Also, one must understand that company formation in Germany with foreign shareholders has numerous challenges. We encourage you to check out our article. For example, if the subsidiary is to be formed with a foreign company as the shareholder, there are many difficulties connected to the process. For companies registered in some countries, it is impossible to open a subsidiary at all.

Plan for Residence Permits: There are company forms in Germany where the owner doesn’t need a residence permit to operate in Germany. However, if you plan to obtain the German residence permit, you must consider this from the start. Regional interest in your business model is crucial when authorities evaluate your eligibility. What’s beneficial in one federal state might not be in another. For our customers, we evaluate and plan from the beginning, providing information about the chances and the optimal path forward.

Choose Where to Live: Decide where you want to live, especially if you’ll be running the business in person and not remotely. Different cities offer varied lifestyles and cultural experiences, so choose a location that fits your personal preferences and business needs.

Develop a Clear Roadmap: Based on your research, create a clear roadmap for your chosen federal state. This well-thought-out plan will guide your market entry and set you up for success.