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Opening a startup in Germany, Italy or Spain means enter a world full of bureaucracy and complicated rules: you need enough money to start and an accountant hop

Opening a startup in Germany, Italy or Spain means enter a world full of bureaucracy and complicated rules: you need enough money to start and an accountant hopefully knowing their stuff. Taxes are so high that you will likely struggle (or just close) the first two years and you will eventually start accumulating tax debts. Errors On the other side, some european countries came to rescue with some smart solutions — like the Estonian e-residency program.

toohotatopic 6y ago
>you need enough money to start That's true everywhere, isn't it? >Taxes are so high that you will likely struggle (or just close) the first two years You pay taxes on profits. Especially during the first years you should have so many expenses that taxes shouldn't be a problem.
- fluffything 6y ago
  In Germany you need 20k Euros cash, and an accountant, and to pay all the "bureaucracy costs" of registering a new company. That's something you have to pay independently of whether your startup is making money or not.
  - toohotatopic 6y ago
    That's for a GmbH [1] where you create an independent legal entity. Actually it's 25k and almost 1k in legal fees. Though, you only need an accountant if you have millions in assets or plenty of employees. [3] However, that's for an independent legal entity. If you want to start a business, you can simply register a business, even online [2] for about 25 to 100 euros. If you don't have wealth to protect you don't need a legal entity anyway. [1] https://en.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4nkter_Haftung https://en.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4n... [2] https://www.freistaat.bayern/dokumente/onlineservice/7333142412 https://www.freistaat.bayern/dokumente/onlineservice/7333142... [3] Actually you can buy an old, empty, GmbH for about 5k but then you lose those 5k instead of having them on your balance sheet like you do when you start your GmbH with 25k.
    - fluffything 6y ago
      > However, that's for an independent legal entity. If you want to start a business, you can simply register a business, even online [2] for about 25 to 100 euros. If you don't have wealth to protect you don't need a legal entity anyway. I'm not sure I follow. If your startup isn't even an independent legal entity, AFAICT you can't pay your employees with equity (e.g. stock options). If you could, the risk would be super high. If the startup is an independent entity and the CEO screws up (e.g. goes to jail), you can replace it. But if it is a completely private business owned by one single person and that person doesn't want to be replaced, then whatever equity you had is now worthless.
      - toohotatopic 6y ago
        You are right. I just wouldn't see those points as essential problems: * If you have co-founders, 25k shouldn't be a problem if you pool your money. A group of people who have worked for some years should have that much money or I would fear that they cannot hold budgets for the company * If you have employees, 25k is a month or two of their salaries. You are dead in the water if you don't have that amount of money in advance as a buffer * If the CEO owns something like 90% of a GmbH and he screws up, his 90% go to whoever has to be compensated. There is no fundamental difference to him owning everything. If you are an employee, then you better start your own company with your colleagues, even if it was a GmbH. If you are an investor, well, start anew. You have spend less than 25k or this would have been a GmbH.
        fluffything 6y ago
        > You are dead in the water if you don't have that amount of money in advance as a buffer In Germany, yes. The people that usually have the high-enough risk tolerance to build a startup are usually broke college graduates. For a group of 3 broke college graduates each with 10k Euros in debt from BaFoG, coming up with 25k Euros just to try an idea that in the vast majority of cases will not succeed is pretty much impossible. I finished my masters in germany debt free with 22 years old. The first time I got 25k in the bank was when I was almost 30, that's after working 7 years full time as an employee. My risk tolerance at 30 is completely different from the one I had at 22. At 22 I could have "lost" 1 or 2 years building a startup that fails, living with 500 Euros a month or less in a shared apartment with my university buddies, waiting tables to pay the bills in between, no problem. But now that I have 25k ? There is no way in the world I would quit my job to start a company. I have a family that depends on me, and other things I can invest those 25k in (car, house, pension fund, ...). If you want fresh and broke college students with nothing to do to attempt a moonshot, those moonshots need to be almost free. Only 1 out of every 10.00 or 100.000 moonshots will land your country a profitable company, so you need to have a lot of them. Requiring people to come up with 25k euros upfront is nuts. If you already had a couple of moonshots succeed, and each moonshot created a generation of 300 millionaires like it happens in the valley, then chances are that some of these risk-friendly and nostalgic millionaires will sponsor some of these startups is high. But Germany would need to somehow create that ecosystem first.
- jeltz 6y ago
  Not in Sweden. To start a limited liability company here you only need 2500 euro and no accountant and Swden does have plenty of successful tech companies, it is that the US tech giants tend to buy them out. I own two tiny companies, neither of them which has an accountant.
- Hokusai 6y ago
  I’m sorry that you are being downvoted. Your comment is informative and contributes to the discussion.

toohotatopic 6y ago

>you need enough money to start That's true everywhere, isn't it? >Taxes are so high that you will likely struggle (or just close) the first two years You pay taxes on profits. Especially during the first years you should have so many expenses that taxes shouldn't be a problem.

fluffything 6y ago
In Germany you need 20k Euros cash, and an accountant, and to pay all the "bureaucracy costs" of registering a new company. That's something you have to pay independently of whether your startup is making money or not.
- toohotatopic 6y ago
  That's for a GmbH [1] where you create an independent legal entity. Actually it's 25k and almost 1k in legal fees. Though, you only need an accountant if you have millions in assets or plenty of employees. [3] However, that's for an independent legal entity. If you want to start a business, you can simply register a business, even online [2] for about 25 to 100 euros. If you don't have wealth to protect you don't need a legal entity anyway. [1] https://en.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4nkter_Haftung https://en.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4n... [2] https://www.freistaat.bayern/dokumente/onlineservice/7333142412 https://www.freistaat.bayern/dokumente/onlineservice/7333142... [3] Actually you can buy an old, empty, GmbH for about 5k but then you lose those 5k instead of having them on your balance sheet like you do when you start your GmbH with 25k.
  - fluffything 6y ago
    > However, that's for an independent legal entity. If you want to start a business, you can simply register a business, even online [2] for about 25 to 100 euros. If you don't have wealth to protect you don't need a legal entity anyway. I'm not sure I follow. If your startup isn't even an independent legal entity, AFAICT you can't pay your employees with equity (e.g. stock options). If you could, the risk would be super high. If the startup is an independent entity and the CEO screws up (e.g. goes to jail), you can replace it. But if it is a completely private business owned by one single person and that person doesn't want to be replaced, then whatever equity you had is now worthless.
    - toohotatopic 6y ago
      You are right. I just wouldn't see those points as essential problems: * If you have co-founders, 25k shouldn't be a problem if you pool your money. A group of people who have worked for some years should have that much money or I would fear that they cannot hold budgets for the company * If you have employees, 25k is a month or two of their salaries. You are dead in the water if you don't have that amount of money in advance as a buffer * If the CEO owns something like 90% of a GmbH and he screws up, his 90% go to whoever has to be compensated. There is no fundamental difference to him owning everything. If you are an employee, then you better start your own company with your colleagues, even if it was a GmbH. If you are an investor, well, start anew. You have spend less than 25k or this would have been a GmbH.
      - fluffything 6y ago
        > You are dead in the water if you don't have that amount of money in advance as a buffer In Germany, yes. The people that usually have the high-enough risk tolerance to build a startup are usually broke college graduates. For a group of 3 broke college graduates each with 10k Euros in debt from BaFoG, coming up with 25k Euros just to try an idea that in the vast majority of cases will not succeed is pretty much impossible. I finished my masters in germany debt free with 22 years old. The first time I got 25k in the bank was when I was almost 30, that's after working 7 years full time as an employee. My risk tolerance at 30 is completely different from the one I had at 22. At 22 I could have "lost" 1 or 2 years building a startup that fails, living with 500 Euros a month or less in a shared apartment with my university buddies, waiting tables to pay the bills in between, no problem. But now that I have 25k ? There is no way in the world I would quit my job to start a company. I have a family that depends on me, and other things I can invest those 25k in (car, house, pension fund, ...). If you want fresh and broke college students with nothing to do to attempt a moonshot, those moonshots need to be almost free. Only 1 out of every 10.00 or 100.000 moonshots will land your country a profitable company, so you need to have a lot of them. Requiring people to come up with 25k euros upfront is nuts. If you already had a couple of moonshots succeed, and each moonshot created a generation of 300 millionaires like it happens in the valley, then chances are that some of these risk-friendly and nostalgic millionaires will sponsor some of these startups is high. But Germany would need to somehow create that ecosystem first.
jeltz 6y ago
Not in Sweden. To start a limited liability company here you only need 2500 euro and no accountant and Swden does have plenty of successful tech companies, it is that the US tech giants tend to buy them out. I own two tiny companies, neither of them which has an accountant.
Hokusai 6y ago
I’m sorry that you are being downvoted. Your comment is informative and contributes to the discussion.