Hidden Costs of Starting a Business in Germany

Starting a business in Germany might seem straightforward, but there are many hidden costs that many entrepreneurs don’t anticipate. Let’s go through them one by one.

1. Registration Address

One of the first things you need is a registration address for your company. A simple PO box is not enough—the address must meet the official requirements and serve as the legal seat of your company for its entire existence. The cost varies depending on the city and location, typically ranging from €130 to €500 net per month. It is important to remember that the registration address will be an integral part of the cost of starting a business in Germany.

2. Notary Fees

Many service providers offer business registration packages but do not include notary fees in their offers. And, for example, the cost of notary fees for formation with individual articles of association, especially in two languages, may reach €2,000 or more.

3. Sworn Translator Costs

If you don’t speak German, you will need a sworn translator when notarizing legal documents. This is an additional cost of company formation that many entrepreneurs forget to consider. In Germany, the cost of sworn translator services for notarization varies between 200-500 euro depending on the language, city and the interpreter.

4. Commercial Register & Trade Registration Fees

Registering your business involves fees for:

• Commercial Register (Handelsregister)
• Trade Registration (Gewerbeanmeldung)

Additionally, any changes post-registration, such as modifying shareholders or legal structure, incur further notary and government fees. It’s important to plan all structural details in advance to minimize extra costs of starting a business in Germany.

When you contact our company, we are glad to offer you our special Company Setup Audit to plan the company structure and discuss the challenges that almost every entrepreneur faces when registering a company in Germany.

Book your personalized Company Setup Audit: Book Audit

5. Chamber of Commerce Membership Fees

Once registered, businesses automatically become members of the local Chamber of Commerce and Industry (IHK). The membership fee depends on the city and revenue:

• Even if your company is inactive, you must pay at least €60 to €200 per year.
• If your turnover is above a certain threshold, fees increase significantly.

6. Broadcasting Fee

Even if you don’t use radio or TV, every company in Germany must pay the broadcasting fee (Rundfunkbeitrag):

• Businesses with up to 8 employees: €6.12 per month
• Businesses with 9 to 19 employees: €18.36 per month
• The larger the company, the higher the fee.

7. Mandatory Accounting (VAT Return & Annual Balance)

All companies must submit:

• Monthly VAT returns, unless you are registered as a small company who does not pay VAT
• Annual balance sheets to the tax office, prepared by a tax advisor.

The cost of annual balance services depends on the revenue and profit but typically starts at €1,500 per year. Many accounting firms do not mention additional annual balance costs when offering accounting services.

8. Minimum Wage Compliance

Germany has strict minimum wage laws, and businesses must ensure compliance. As of January 1, 2025, the minimum wage in Germany is €12.82 per hour. This means you cannot pay your staff less than this amount and need to keep in mind these costs of starting a business in Germany.

9. Social Security Contributions

In Germany, employers must pay social security contributions for their employees. On top of the employee’s salary, businesses must contribute approximately 22.5 % in social security costs.

10. VAT for Businesses

Often the prices for most services in Germany are given without VAT, which is generally 19%. If you are registered as a regular company, you can usually reclaim VAT. However, if you are registered under the small business (Kleinunternehmer) tax scheme, you cannot reclaim VAT. This means that instead of paying €1,000, you will pay €1,190, with the extra €190 being non-refundable.

11. Compliance Costs & Industry-Specific Regulations

Businesses must comply with various regulations, which may involve additional costs. For example, a restaurant business owner must:

• Participate in mandatory training through the Chamber of Commerce
• Obtain food safety certifications
• Provide Instruction According to the Infection Protection Act
• Apply for a gastronomy permit (if applicable)

as well as observe other regulations.

For different kinds of businesses different certificates, permits, licenses etc. would be required, whose cost may vary from 200 to thousands of euros. It is important to consider those expenses and add them to the cost of company formation.

How to Avoid Unexpected Costs when Starting a Business in Germany?

For many entrepreneurs these fees are hidden, because they don’t have extensive information beforehand and can miss crucial details. Protect your business from unexpected costs and hurdles with our Roadmap development service. With it, we guide you through essential steps like obtaining permits, structuring your company, and staying compliant—saving time and money while avoiding setbacks. And, of course, we would be happy to bring your roadmap to life.