Setting up a company in Germany
3 Fatal Misbeliefs of Foreigners
Unfortunately, the internet is overrun with misleading information. And it is not surprising: often texts on forums, information websites, and even on the websites of “specialists” are written by copywriters without specialized experience. Think about it: can a person without a legal or economic education understand in 3-4 hours the nuances of registering a company or obtaining a residence permit? Can a specialist without highly specialized practical experience of work with foreign entrepreneurs know what traps await the foreigners?
Losses from incorrect formation can exceed the cost of services by several times. And closing a company is 3 times more expensive and lasts 7 times longer than opening it.
1. A foreigner can easily set up a company in Germany
There are numerous offers on the internet for simple and quick company formation. Websites are full of detailed step-by-step information. It seems that for 500 euros the client receives tons of useful documentation. No wonder: even German entrepreneurs are drowning in terms. How can a foreigner understand the differences between the offers?!
Let's get it right. Imagine that 15 forms have been filled out for you, a meeting with a notary has been coordinated, and you were given step-by-step instructions on what to do with all of it. Sounds like a self-assembly of an Ikea closet, doesn’t? Only, unlike a closet, the cost of a “false assembly” while setting up a company in Germany can cost tens of thousands of euros.
Little things that cost a lot
For example, not everyone knows that not all notaries consult on legal matters. This means that all responsibility and consequences for any wrong “decision” rest solely with you. Therefore, at the slightest inaccuracy, you will have to pay the fees and for the trip to Germany again in order to make changes. As a result, even the slightest change might cost you around 2 000 euros.
According to some notaries, 30% cases of setting up a company in Germany fail just because of non-delivery of the invoice for the registration fee at the place of the company registration. Obtaining a VAT number for the company with a foreign managing director is another very important, but complicated procedure. Not even all tax advisers and tax offices themselves are familiar with it. Thus, only in the process of getting the VAT and tax numbers, the tax office gets in touch with the entrepreneur 5-7 times with clarifying questions. Things are even more complicated with opening a bank account for foreigners.
As you can see, even if you arm yourself with detailed instructions, you run the risk of company formation failing or getting huge fines. Wanting to save a few euro on setting up the company, you can lose tens of thousands.
Setting up a company with us is safer than a journey accompanied by a Presidential Motorcade
Why study a list of names of the founding documents that say nothing to you? With us you get company formation in Germany on a turnkey basis. Leading Nexus experts prepare all the documents and apply for company formation, tax and VAT numbers by themselves. The communication with the register courts and tax authorities is our task.
During 17 years of work we have served clients from almost all over the world: from Russia to Dubai. We know the traps that foreign entrepreneurs face. Based on the lessons learned, we have developed backup plans. The smooth work process is ensured because all stages of the project are managed by a certified Project Management Professional (PMP) in strict accordance with the international PMI PMBOK® standards. We successfully registered companies, even when opening a bank account in Germany seemed impossible.
2. Having a company in Germany automatically grants you the right for a residence permit
This is probably the most common and “expensive” misbelieve that most of the foreign entrepreneurs have. Here is a typical situation: 3-4 shareholders intend to set up an import-export company to get a residence permit in Germany according to § 21 as self-employed. A year later the entrepreneurs find out that their chances of getting a residence permit are negligibly small. Their plans and hopes crash like waves against the cliffs. Thousands of euros are lost for registration and maintenance of the company, for flights and accommodation.
Opening a company in Germany provides a substantial ground for obtaining a residence permit in accordance with § 21 only if a number of conditions are met. The main ones are:
economic interest and needs of the German region where the company will be set up. That is why, before setting up a company, it is important to decide on the type of activity that is necessary for the region. Only because this condition isn’t met many entrepreneurs are denied a residence permit. We advise our clients on the relevance of their business to a particular region, consider the chance of obtaining a residence permit with their type of activity.
the company's activity should have a positive impact on the economy of the region. That is why prior to forming the company it is important to estimate the prospects for business development, to make a realistic assessment of the economic indicators of your business, to consider benefits for the region.
residence permit according to § 21 can only be granted to managing directors who hold the majority of the shares of the company or at least the same number of shares as other shareholders. In practice, if a small company has more than one managing director, then substantial evidence is required of why the company needs two managing directors. Therefore, it is important to decide before registering the company in Germany which of the founders intends to obtain a residence permit as a self-employed.
there are numerous of other important legal and economic issues that must be considered when setting up a company if you plan to apply for a residence permit in Germany in the future.
How we solve it:
For obtaining a residence permit for the self-employed we have developed a special package of services. Before setting up the company, we analyze the situation and form the company, taking into account the fact that the managing directors are going to apply for a residence permit in Germany. The assessment is carried out by an immigration lawyer, leading economists with the involvement of subject matter experts.
You save tens of thousands of euros and up to a year of time. We assist you with obtaining a residence permit. The risks of refusal are significantly minimized because the registration of the company and the preparation of documents for the residence permit application are carried out according to the 5-step Nexus Immigrate technology. See how it works here.
3. It is easier to get the German residence permit for business if you get a permit in another European country first
Eager to live in Germany? But it seems that getting a German residence permit is extremely complicated or even impossible? You go over alternative “easy” options of EU countries. You naively believe that in a year or two you will move from some other European country to the desired Germany. Does it ring a bell?
Don’t cheat yourself – it’s not going to happen. You are only moving further away from your Holy Grail. As a holder of an EU residence permit, you may only work in the EU Member State that has granted the permit to you. It means that if you got a residence permit, for example, in Latvia, you are allowed to work only in Latvia.
Stop accepting compromises! Ensure yourself and your family a safe and comfortable future in Germany. Because of our 5 steps Nexus Smart Immigrate technology the opportunity of getting a residence permit for business directly in Germany is a real. Without senseless wastes on compromise options. Without additional risks. Without losses of 7 years of your life. See how it works here.
This document (and any information accessed through links in this document) is intended for general informational purposes only and is not a substitute for professional advice. Each situation is unique and professional advice should always be obtained before taking or refraining from any action.