How to open a business in Germany
This state attracts businessmen from different parts of the world who are looking for an opportunity to earn money abroad. It does not provide for a strict framework of foreign capital, the only condition is that the firm must conduct all financial movements through the bank.
What is the attractiveness of doing business in Germany?
Starting a business in Germany is available to anyone who has free funds, relevant knowledge and experience. The state has the best conditions for business promotion, state support, a stable economy and policy are guaranteed here. You can earn much more here than at home.
If you have a positive credit history, a foreigner can get a loan at a low interest rate. In Germany, borrowed funds are available at approximately 4% per annum for any type of activity.
In Germany, it is customary to study any profession. It is very difficult for a German to imagine that an ordinary salesperson behind the counter will not have a specialized education. Such specialists can spend more than one year to learn not just how to trade, but also to study legislation and sales psychology.
In addition to excellent training and high competition in the labor market, highly qualified specialists from different European countries often come to Germany. But, despite this, the services of qualified and educated specialists are cheaper here than in the same Russia.
If a foreigner opens a business in Germany for the first three years, the tax and state authorities do not interfere in their activities. Therefore, most businessmen take advantage of this opportunity to file reports with zero income.
In the list of advantages of starting a business in Germany, you can also specify:
- ability to use a German brand to sell your products;
- the funds invested in the business are recognized as foreign investments, so they are reliably protected by the state;
- the business owner has the option to refund VAT;
- business activity in Germany allows you to have an account with any German banks, which are considered to be the most reliable in the world;
- special visas for up to one year are available for foreign entrepreneurs;
- a businessman is entitled to benefits and government subsidies.
Germany has a high standard of living, and having your own German company allows you to get a residence permit in the future and move here for permanent residence.
The country’s economy has shown steady growth in recent years and does not plan to stop. The state has excellent infrastructure, easy access to financial and labor resources, almost complete absence of corruption and a minimum of obstacles to business development in this country.
Germany has a comprehensive program to support entrepreneurs. Here you can start a business activity even without attracting borrowed funds, there are various grants. After winning such a grant, you can easily start a small business.
Nuances of starting a business in Germany
Germany has the same legislation for all businessmen. The law regulates all the processes of doing business in general provisions, and each province has its own provisions.
To name the most popular profitable type of earnings in Germany will not work. Everything will depend on which area the businessman gives his preferences to.
Traditions are strictly observed in the country, unlike legislative acts. Therefore, the division of provinces into areas of activity is based primarily not on laws or government policies, but on accepted traditions developed by the firm over the years. For example, every year more and more businessmen come to Bavaria, whose activities are focused on innovative developments and modern technologies.
When starting your business in Germany, it is recommended to keep in mind the mandatory industrial tax in the country, it can vary from 15 to 20%. Each field of activity pays its own percentage.
Start a business in Germany with state support
One of the many features of a small business in the Federal Republic of Germany is the possibility of developing an innovative field of activity. Now in the territory of modern Germany there are various preferential programs and subsidies from the state for entrepreneurs.
Every resident of the country planning their own business has the opportunity to receive a loan from the state of up to 50,000 euros for up to twenty years. At the same time, in the first two years you can pay nothing to the bank, there will be no commissions and interest. For the next eight years, you can only pay interest, usually from 4 to 5% per annum. The body of the loan itself can be repaid only from the 11th year of using borrowed funds.
Small and medium-sized businesses can reduce their costs as much as possible due to low taxes, subsidies from the state and low rental payments. That is why now small forms that are part of a large holding company are particularly popular with domestic investors.
European Business Development Loan
Today, loans for starting your own business can be issued in Germany at 3-4% per annum. At the same time, loans are issued for a fairly long period, and at first you can not pay the debt. In other words, credit conditions in Germany are very attractive for novice businessmen.
Foreign entrepreneurs can apply for a loan, but it will not be so easy to get the money. If you expect to get a loan from a German banking structure, you should consider the following nuances::
- first of all, you will have to convince the credit institution of its own solvency.At the same time, the specialists who will conduct the business themselves are important.Only after studying these parameters will the bank make a decision on issuing a loan.Ideally, if the company’s management team includes highly qualified Germans;
- all plans of the future company will need to be documented;
- it doesn’t matter what your business idea is.The main thing is to conduct a proper presentation of the company, so that bankers can understand the prospects of your project;
- the industry in which you plan to work is also important.Banking structures regularly monitor the economic situation in the country.If your industry is experiencing a downturn, it will be as difficult as possible to get a loan;
- the presence of a businessman in the ownership of any property will be a plus.The more assets a businessman has in Germany, the more likely he will be to approve the loan.
The process of raising borrowed money to start a business in Germany is quite lengthy and requires patience. In this case, it is better not to rush, the credit institution may take your impatience for an unfavorable signal and refuse you.
How to choose a business form
One of the main reasons for the popularity of Germany for foreign entrepreneurs and the development of activities here is the ability to choose the legal and organizational form of doing business from a variety of options. There are individual entrepreneurs, as well as partnerships formed with shared participation.
The most affordable for foreigners in Germany is considered to be an individual entrepreneur. To register this form of activity in some areas, you need to obtain a permit.
If the activity is planned to unite two or more entrepreneurs, the best option is to start a business in Germany by opening a civil law society. It is not necessary to register it in the commercial register, and the company name is not used. All obligations are carried out at the expense of the property of the company itself or of each of its members.
A GPO is not a legal entity, and there is no mandatory minimum authorized capital.
The next form is an open trading company, which implies an association of two or more persons for conducting a common business activity, which has a common name. Individuals and legal entities can use this form. For this option, the amount of authorized investments is also not set. Each participant is responsible in case of debt to the state or customers.
It is possible to combine legal entities and individuals in a Limited Partnership. There can be any number of members in the society. Such a society must have at least one full and one limited member, usually referred to as a limited member. The limited partner is liable for all possible obligations with his share in the authorized capital, but he does not participate in the affairs of this partnership, unless this is stipulated in the charter.
A partnership is an association of 2 or more people from different professions, such as doctors, teachers, lawyers, etc. A similar partnership is created after signing the contract and entering the relevant data in the register.
How do I start my own business in Germany and get a bank account?
After receiving a copy of the certificate of registration of your company in Germany, you need to contact any bank to open a current account. It is advisable to choose a banking structure that has several branches.
Whichever bank you choose to conduct financial transactions for your company, you will be provided with complete instructions that will help you use all the services offered.
After registering an account, you should immediately deposit the amount of your company’s authorized capital — 12,500 euros. The documents confirming payment should be provided to a notary so that he can transfer them to the municipality for assigning your organization an individual number in a special register.
Obtaining a phone number takes about one month, but the company can conduct its business from the moment of opening a current account and depositing the amount of authorized capital to it.
How to start a business in Germany with a profit?
Before you think about how to open a store in Germany so that it makes a profit, you need to study the basic needs of the citizens for whom your company will work. The most profitable business in any city in the world is real estate. This is a profitable and interesting business for working in Germany. In other words it will be relevant for Germany:
- acquisition of residential, warehouse or commercial premises for their subsequent rental. If you correctly approach the choice of a real estate object for further leasing, the business will pay off as quickly as possible. The main thing is to take into account all the technical parameters, location, presence near populated areas, etc.;
- purchase of land for development. The finished property will be easy to sell and earn a good income;
- hotel maintenance. Opening a hotel, you can guarantee a quick payback and good earnings, the Federal Republic of Germany is very attractive for tourists from all over the world;
- hostels for the elderly are a profitable business in Germany, which guarantees a good stable profit. Such institutions can count on state support, benefits and subsidies.
In addition to real estate, it will be profitable to open a cafe or pastry shop in Germany, this will bring a good income. But it is worth considering that the demand for expensive establishments in this segment is beginning to decline markedly. Most locals will choose an inexpensive place with good food for lunch or dinner.
If you are interested in starting a business in Germany, consider opening a small cafe in a passable location and offering high-quality service and a varied menu. Your expenses will pay off very quickly, and your profit will only grow.
A good way to invest free money is to open a store for food, basic necessities and household chemicals. These areas are always in demand, especially if the store is located in a residential area. With proper business management and a competent approach to business organization, your store will pay off very quickly.
In addition, in Germany there is such a thing as “a person of a free profession”. Specialists in this area of business are exempt from business taxes. This category includes the following professions::
- doctors and all representatives of the medical field of activity;
- specialty of the legal direction;
- designers, people of creative professions;
- theater and film actors;
- journalists, linguists, translators;
- photo masters, etc.
Innovative ideas and projects are welcome in Germany as business ideas. Products that guarantee the preservation of the environment have special prospects.
Acquisition of an existing business
Thinking about how to open a business in Europe, many people come to the decision to acquire an existing business. Own a business in Germany or another country of the European Union will allow you to increase your status in society and make useful connections with partners.
At the same time, many foreigners choose not to create a new business, but to buy an existing one. The Federal Republic of Germany offers all conditions for acquiring a valid case. In Germany, you can easily buy a company that produces goods or provides any services, along with premises, equipment, employees and customers.
It is very profitable to acquire a ready-made operating business here. The stable economic situation in the country and loyal laws contribute to this procedure. But before choosing an object for purchase, it is recommended to analyze all existing offers on the market, carefully study the official documents on the selected business, check the reputation of the enterprise in the market, find out the opinions of partners, etc.
If you do not find any obstacles during the verification process, you can submit documents to the municipality. You must also provide a plan for the management and development of the acquired business for several years in advance.
In Germany, the purchase and sale of companies is carried out quickly and without problems, however, in order to run into scammers, it is better to use the help of professionals. In Germany, there are many professionals who guarantee legal support in the process of registration in the ownership of commercial, residential real estate, operating businesses, etc.
Investing as a profit-making option in Germany
When you are thinking about how to open a business in Europe for profit, you can try to start investing your free money in the German economy, this is a reliable and guaranteed way to increase your own capital.
Every foreigner has the opportunity to use their funds as an investment in a ready-made business, banking instruments, etc. The purchase of real estate is a guarantee of quick reimbursement of all costs and good profit in the future.
Rent in the country is especially in demand, as most Germans prefer to live in rented apartments all their lives, so there will always be customers in this segment.
In addition to buying real estate, investments such as:
- term bank deposits with good annual profit rates;
- federal land bonds and other securities;
- buying shares is accompanied by some risks, but if you are lucky, the profit will be good.
In modern Germany, everyone who has sufficient capital gets excellent prospects. To do this, you need to clearly understand what you want, know how to properly manage your finances and comply with the laws of the country.