How long it takes to start a business in Germany depends entirely on which door you come through.
As a freelancer you can be earning today. You tell the tax office you’ve started and that’s the whole procedure. No trade office, no notary, no capital, no waiting.
Set up a company with limited liability and it’s notary appointments, a register entry, and a wait measured in weeks. The share capital for that runs anywhere from one euro to 25,000, depending on which form you pick.
What both routes share is predictability. The rules are written down. They read the same for somebody born in Hamburg and somebody who arrived last year. And they change rarely enough that advice from five years ago is usually still good.
What they never do is get out of your way.
Which is why the first real decision isn’t the one most people expect.
Trade or Profession
Before the legal form, before the capital, before anything involving a notary, one question decides how the rest of it will look. Does your work count as a Gewerbe, a trade, or as a freier Beruf, a liberal profession?
Land on the profession side and you never visit the trade office at all. You tell the tax office you’ve started, and that is the whole registration. No trade tax. No compulsory chamber membership. Simple cash-basis books however large you get.
Land on the trade side and you do every bit of it.
Same person, same laptop, often the same work. Completely different administrative life.
The dividing line sits in section 18 of the income tax act, and the list there is a period piece. Doctors and lawyers, engineers and architects, journalists and translators. Also commercial chemists, photo-reporters, and maritime pilots. ;-)
It was drafted decades ago and it still decides what a software developer pays.
What it doesn’t mention at all is bloggers, streamers, or anybody earning a living on a platform. The law predates the lot of them, so the tax office reasons by analogy, and it usually lands on trade. A journalist running an ad-free channel in her own field can stay on the profession side. Take the first sponsorship deal and you’ve moved.
You don’t get to pick your side either. The tax office decides, and it decides partly on how you describe the work. “Engineer for software development” gets waved through where “IT consultant” invites a closer look. Have the wording checked before you file anything, because being reclassified later comes with back payments.
Picking a Legal Form
Two families, and the choice is mostly about liability.
A sole proprietorship or a GbR partnership needs no minimum capital, no notary, and no register entry. You could be in business this afternoon. You also answer for the debts with everything you own, house included.
A GmbH caps that. Minimum share capital is 25,000 euros and the articles have to be notarized. The company exists from the moment it appears in the Handelsregister or commercial register. Liability stops at the company.
You may register having paid in half of the capital. The other half isn’t waived, only deferred, and it falls due when the company calls for it.
The UG is the way in for anyone without 25,000 euros lying around. It starts at one euro and arrived in 2008 as the German answer to the British Limited. It is not a shortcut past the notary, though. The procedure is identical to the GmbH, register entry included.
What differs is the money. Whatever capital you declare has to be paid in full and in cash, with no half now and half later. A quarter of each year’s profit then stays locked away as a reserve. Once the balance reaches 25,000, the UG can convert into a proper GmbH.
Larger forms exist. For a first business here, these are the ones that matter.
The Registration Trail
The order matters more than the paperwork does.
For a GmbH or a UG the notary comes first, because the articles are worth nothing until they’re notarized. Then the capital goes into a business account. Then the notary files with the commercial register, and the entry takes anywhere from a few days to a few weeks. Since August 2022 the whole formation can run by video conference, which is the biggest improvement the process has seen in decades.
Next comes the trade registration at your municipality’s Gewerbeamt. Unless, of course, you’re on the profession side, in which case you skip this step and go straight to the tax office.
Either way, the tax registration questionnaire is compulsory. It goes in electronically through the ELSTER portal within a month of the day you actually start trading. Your tax number comes back in roughly two to six weeks, and you cannot issue a proper invoice until it does.
One thing you don’t have to do is join a chamber. The trade office forwards your details to the chamber of commerce or the chamber of crafts by itself. Membership is compulsory, and resigning from it isn’t an option.
The statutory accident insurer wants you registered too, even if you work alone and never hire a soul.
Costs at this stage are smaller than people fear. Registering a trade is a two-figure sum that your municipality sets. A notarized formation using the standard template runs to a few hundred. Write your own articles and it moves into four figures. The real money is in what comes afterward, and health insurance is the big one.
The Trades You Cannot Simply Enter
Some trades stay closed until you qualify.
The crafts code names the trades where you need a Meisterbrief, the master craftsman’s certificate, before you may run your own shop and train apprentices. Roofers, electricians, and hairdressers are on that list. Working in those trades for somebody else is open to anyone qualified. Running the business is not.
That puts you under the Handwerkskammer, the chamber of crafts, rather than the chamber of commerce. The entry in the crafts register is its own step with its own fee.
Qualifications from elsewhere in the European Union have recognition routes. Budget time for them.
One more thing to settle before any of the above. If you’re not from the EU, the right to be self-employed has to sit in your residence status. It doesn’t arrive on its own. Start with German visa requirements and immigration to Germany, because everything on this page assumes that part is done.
And if the business rests on something inventable, look at a German patent early rather than after the first trade fair. Showing the thing in public before you file can cost you the right to protect it.
The paperwork is literal and completely indifferent to how good your idea is. It’s also identical for everybody and it stays put, which is why the people who got through their first year rarely complain about the second.
For where the money to run it comes from, see German banking. The kind of companies all this eventually produces sits on German companies, and the wider view is on German business.