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Thanks for the post. Reading this made me quite angry - politicians here in Germany always talk out of their asses about improving the situation for startups,

Thanks for the post. Reading this made me quite angry - politicians here in Germany always talk out of their asses about improving the situation for startups, but when it comes to removing these ridiculous administrative hurdles, absolutely nothing happens. In Austria, where I live, it's even worse. It's not even possible to start a limited liability company without at least 35k starting capital in the bank.

woodson 4y ago
Agreed, they’ve been talking about introducing an “Austrian limited” with lower capital requirements for I don’t know how long…
- ChuckNorris89 4y ago
  ÖVP has better things to do than make life easier for 'the little guy' when they're so busy catering to their chums in big business.
keewee7 4y ago
As a Danish software engineer I'm puzzled by how much Germany has convinced the rest world that it is some kind of high-tech powerhouse. Outside the old West German legacy giants the country is stagnant.
- mtrovo 4y ago
  I mean, it's not as if the bar is that high within the EU, specially that now UK is gone so London is not officially a contestant for the title of tech capital of Europe.
  - bestham 4y ago
    The UK is still in Europe.
- andi999 4y ago
  Which regions in the eu are more dynamic?
  - ChuckNorris89 4y ago
    Netherlands, Luxembourg, Switzerland, Estonia, Romania, etc.
    - andi999 4y ago
      Roundhouse kick?
ChuckNorris89 4y ago
>In Austria, where I live, it's even worse. That also explains the terrible tech jobs market both local and remote available to Austrians, even when you compare to some Eastern European companies. The bureocracy and tax system here severely discourages any kind of remote or self employment or starting your own gig. Plus, AFAIK it's the only EU country I've encountered where non-competes are legal and enforceable without any penalities for the employer. Madness. I don't know how startups in Austria manage to get anything off the ground.
gyulai 4y ago
The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. The free movement provision, which is one of the central pilhars of the E.U., extends to free movement of legal persons, and does not end with free movement of natural persons. The UK is no longer in the EU, but you could go with the Republic of Ireland or Malta.
- manmal 4y ago
  Don’t you need to operate branches in each country if you do that?
  - hef19898 4y ago
    You do, you don't need a local legal entity but having one makes a lot of things easier. E.g. employment and profit allocation. The latter has serious tax implications.
    - manmal 4y ago
      Sure, but now you spend a nontrivial amount of time and attention on logistics. Costs can be a couple k Euro per branch per year, depending on what deals you can strike with accountants. You also need to make sure you always respond to mail from authorities in both countries, in time.
      - hef19898 4y ago
        And if you don't you face an investigation by authorities. And they will reclaim due social security and taxes. And you face a potential court case. All of which is a lot more expensive. Not to mention that managers and directors already went to jail for stuff like that. And all that to safe a couple of bucks because smart start-up founders can't wrap their head around the simplest legal principles and requirements.
- jokethrowaway 4y ago
  Couldn't Austria come after you and say you're running an Austrian company, given you're an Austrian business with no ties to the UK? I'd recommend talking to an accountant. In Italy or Spain this wouldn't fly 100%, it would even be a criminal charge (foreign dressed companies).
SkyAndSand 4y ago
What is the alternative? (also asked here https://news.ycombinator.com/item?id=31620700 https://news.ycombinator.com/item?id=31620700)
7373737373 4y ago
Ditto and fully agreed with the post and the other commenters re. the insane complexity and costs of founding an UG. It took me over two months to have such a company established, and the number of institutions you have to interact with is rage inducing and mindnumbing. I'm afraid to even move to another place because apart from all the institutions I'll have to notify individually for me as a natural person, there are now a handful more for the company. And it's not just the notification, I'd have to unregister and reregister the thing, especially if moving to another city. And each of these actions costs time, and money and disgusting amounts of paper. For the same reasons, I'd avoid hiring any employees. "Digitalstaat" my ass. It's IMPOSSIBLE to found even this simplest of limited liability companies without dozens of forms. The politicians ARE really talking out of their ass. Expect the founding of an UG to cost not only two months, but 1500€ in the first year, and 1000€ each following year. Oh, and your nerves, because at some point in the process will the bureaucratic machine fuck up and/or delay. The same goes for the scammers, which the German "Rechtsstaat", as it likes to call itself appears to be completely helpless against for decades. My advice, if you've never founded an UG/GmbH before, don't do it alone. Find a cofounder who can care about all this bullshit so you can focus on the actual product and business. (Or don't found in Germany at all)

woodson 4y ago

Agreed, they’ve been talking about introducing an “Austrian limited” with lower capital requirements for I don’t know how long…

ChuckNorris89 4y ago
ÖVP has better things to do than make life easier for 'the little guy' when they're so busy catering to their chums in big business.

keewee7 4y ago

As a Danish software engineer I'm puzzled by how much Germany has convinced the rest world that it is some kind of high-tech powerhouse. Outside the old West German legacy giants the country is stagnant.

mtrovo 4y ago
I mean, it's not as if the bar is that high within the EU, specially that now UK is gone so London is not officially a contestant for the title of tech capital of Europe.
- bestham 4y ago
  The UK is still in Europe.
andi999 4y ago
Which regions in the eu are more dynamic?
- ChuckNorris89 4y ago
  Netherlands, Luxembourg, Switzerland, Estonia, Romania, etc.
  - andi999 4y ago
    Roundhouse kick?

ChuckNorris89 4y ago

>In Austria, where I live, it's even worse. That also explains the terrible tech jobs market both local and remote available to Austrians, even when you compare to some Eastern European companies. The bureocracy and tax system here severely discourages any kind of remote or self employment or starting your own gig. Plus, AFAIK it's the only EU country I've encountered where non-competes are legal and enforceable without any penalities for the employer. Madness. I don't know how startups in Austria manage to get anything off the ground.

gyulai 4y ago

The loophole I've successfully used in the past in Austria was to incorporate a Ltd in the UK and operate it in Austria (similarly to how, in the U.S. The free movement provision, which is one of the central pilhars of the E.U., extends to free movement of legal persons, and does not end with free movement of natural persons. The UK is no longer in the EU, but you could go with the Republic of Ireland or Malta.

manmal 4y ago
Don’t you need to operate branches in each country if you do that?
- hef19898 4y ago
  You do, you don't need a local legal entity but having one makes a lot of things easier. E.g. employment and profit allocation. The latter has serious tax implications.
  - manmal 4y ago
    Sure, but now you spend a nontrivial amount of time and attention on logistics. Costs can be a couple k Euro per branch per year, depending on what deals you can strike with accountants. You also need to make sure you always respond to mail from authorities in both countries, in time.
    - hef19898 4y ago
      And if you don't you face an investigation by authorities. And they will reclaim due social security and taxes. And you face a potential court case. All of which is a lot more expensive. Not to mention that managers and directors already went to jail for stuff like that. And all that to safe a couple of bucks because smart start-up founders can't wrap their head around the simplest legal principles and requirements.
jokethrowaway 4y ago
Couldn't Austria come after you and say you're running an Austrian company, given you're an Austrian business with no ties to the UK? I'd recommend talking to an accountant. In Italy or Spain this wouldn't fly 100%, it would even be a criminal charge (foreign dressed companies).

SkyAndSand 4y ago

What is the alternative? (also asked here https://news.ycombinator.com/item?id=31620700 https://news.ycombinator.com/item?id=31620700)

7373737373 4y ago

Ditto and fully agreed with the post and the other commenters re. the insane complexity and costs of founding an UG. It took me over two months to have such a company established, and the number of institutions you have to interact with is rage inducing and mindnumbing. I'm afraid to even move to another place because apart from all the institutions I'll have to notify individually for me as a natural person, there are now a handful more for the company. And it's not just the notification, I'd have to unregister and reregister the thing, especially if moving to another city. And each of these actions costs time, and money and disgusting amounts of paper. For the same reasons, I'd avoid hiring any employees. "Digitalstaat" my ass. It's IMPOSSIBLE to found even this simplest of limited liability companies without dozens of forms. The politicians ARE really talking out of their ass. Expect the founding of an UG to cost not only two months, but 1500€ in the first year, and 1000€ each following year. Oh, and your nerves, because at some point in the process will the bureaucratic machine fuck up and/or delay. The same goes for the scammers, which the German "Rechtsstaat", as it likes to call itself appears to be completely helpless against for decades. My advice, if you've never founded an UG/GmbH before, don't do it alone. Find a cofounder who can care about all this bullshit so you can focus on the actual product and business. (Or don't found in Germany at all)