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Wow, this article is a mess. Yes, registering a UG or GmbH is more complicated than Ltd (I’ve done all three) but the process can be basically narrowed down to:

• csomar 4y ago
  > Regarding the language. The only thing you’re going to hear as a response to that entitlement: “this is Germany, we do this the German way”. I’m not German, just fyi… you know, when I arrived in the UK in 2006, I didn’t expect that everyone will explain to me things in Polish. I actually had to learn the language. I think his point is, English is the lingua-franca of the internet and international business. If you are looking to accept international founders, investors and money, maybe it's a good idea to add EN i18n.
  • rad_gruchalski 4y ago
    He looked into opening a GmbH, not the other way around. He wants to do business in Germany. You can absolutely go through this process without speaking German but it will cost you money in lawyers. > I think his point is, English is the lingua-franca of the internet and international business. Maybe the Internet, yes. But international business? I don’t think so. Maybe from a perspective of native English-speaking person it appears to him like that. But it’s not the case in many non-English speaking countries.
    • tormeh 4y ago
      > Maybe the Internet, yes. But international business? I don’t think so. Maybe from a perspective of native English-speaking person it appears to him like that. But it’s not the case in any non-English speaking country. When a Swedish company does business with a Portuguese company, they speak English. Other languages are used for domestic business. International business is done in English. There are exceptions to the rule like the Francophonie, but let's not be pedantic. You may learn some phrases of the other party's language as a gesture of goodwill and politeness (and honestly it's kinda fun use of company time), but the actual important talks take place in English.
      • raverbashing 4y ago
        > When a Swedish company does business with a Portuguese company, they speak English. Correct, and they both feel less entitled about the other part not speaking their language as English native speakers do
        • germandiago 4y ago
          > and they both feel less entitled about the other part not speaking their language as English native speakers do Have a couple of stories about this. Yes, some people think that you should know their language when they just speak theirs. I do not find it too polite, honestly. Especially a couple of times I saw things that even once made me jump in and say: "how many languages do you speak?" He was abroad, you know, in Asia. And I had to reply: "what makes you think everyone should speak english? You are not even in an english speaking country". It is not nice to see people behave like that. I think it made the locals feel insulted, not bc he cannot speak the local language. It was because of the attitude of demanding the others to talk to him in english. English is the most used second language. But noone said each of us must learn it. Just my two cents.
      • pjmlp 4y ago
        We might speak English but you will be signing everything in Portuguese. And depending on the education we also speak Spanish, French, German and Italian, as the main learning paths in high school available to chose from. But again, legal documents, Portuguese.
  • sdfhbdf 4y ago
    > maybe it's a good idea to add EN i18n. Unless you’re looking for a country to change it’s official language to English I think this is a wrong direction. The law is in German, it’s interpreted in German, if there’s some misunderstanding or a mistake in filings it will be heard in court in German. It’s better to set expectations early. All legal processes are held in country’s native language. It is better to NOT provide “official” i18n of the process of starting the company, which unless you’re then willing to support the whole process in this foreign language. How do you also then make sure that the English translation is fully legally equivalent to the German version?
    • deepsun 4y ago
      I agree, however Estonia does provide EN option to boost their venture economy.
      • ricardobayes 4y ago
        Irish company tax is lower than Estonia and the process equally simple. Estonia, like Portugal, does one thing very right and its PR. But once you scratch the surface there are much better options out there to have a company or to live in.
        • germandiago 4y ago
          I am genuinely interested in good places to live where: - it is not cold, if possible - the tax rate is low (even if I have to pay services later myself but with my own choice) - the hospitals and school system are good, even if private - it is not difficult/expensive to open a business I am all ears :)
          • mchaver 4y ago
            A few ideas: Singapore: probably meets all of your requirements. Low tax, easy to open a business, lots of private schools. No idea how to rate the hospitals, it has a couple in the best hospital lists in the world, but I don't trust those. Drawback is everything is expensive. Andorra: not cold for Northern European standards. Low tax, a couple of international schools, private medicine, you should be able to access the private medical system in Spain. A few inconveniences are no train, no airport (closest are Barcelona and Toulouse), custom inspections into France or Spain, generally isolated feeling and tourist centered feeling. Portugal: Warm and friendly people with good food. I don't know anything about the schools or medical system. Bureaucracy probably isn't great. Low tax for a couple of years. Unfortunately local citizens do not benefit it so a foreigner taking advantage of it is likely displacing a local. Feels very unfair. Puerto Rico: not cold, no US federal taxes. If you are a US citizen and non-resident and move there, there are some other tax benefits, but people who were already residents can't take advantage of it. Lots of infrastructure problems.
  • AlbertCory 4y ago
    I wouldn't expect the forms to be in English, because that would be Ugly American. It would be very hip for them to do it, but that's their choice. Almost every educated adult under 60 there speaks English, as far as I can tell. I would note, though, that in a court proceeding, one side can pay for simultaneous English translations (I don't know about other languages). I know this because of the German map patent I worked on. I didn't get to go to Germany for the hearings, but if I had, we would have gotten the English service.
    • the_common_man 4y ago
      > Almost every educated adult under 60 there speaks English, as far as I can tell. This is not true in Berlin, atleast. Even the immigration office may not speak English.
      • barry-cotter 4y ago
        I can see why in Berlin people who hang out in bourgeois spaces would think that. Almost every university graduate under 40 is able to speak English and an awful lot of those under that age. Germany isn’t like Scandinavia where everyone without severe educational issues speaks English well but it’s another world compared to Italy, and Berlin has unusually high levels of competence in English for Germany.
        • Haga 4y ago
        • still_grokking 4y ago
          > Berlin has unusually high levels of competence in English for Germany I would not confirm that. In Berlin everybody speaks at least some English, and more importantly, people are way less "shy" to do so. But the overall level of education (and that includes foreign languages) is much much lower in Berlin than in the southern states. You can even get your Abitur in Berlin without having to take English exams. That's something that's impossible in say Bavaria.
  • croes 4y ago
    The problem is legal texts are complicated even if you are german. Translation brings in ambiguity.
    • jevgeni 4y ago
      You being downvoted just shows how HN struggles with things like law practice, which are outside this echo chamber.
    • piaste 4y ago
      In Denmark I received English copies of various work / housing contracts, with a very clear disclaimer "in case of any disputes, the Danish text applies". I believe we did the same in Italy with foreign clients - Italian binding text, English courtesy non-binding copy. Such a copy is good enough to use for 95% of the negotiation process. Then, if it's a serious business contract, you get a sworn translator to check its accuracy before the final signing. (In my case, since the Danish ones were standard contracts, I just checked that they didn't differ from the publicly available texts).
  • shapefrog 4y ago
    They can't even be bothered to learn the language ...
  • aden1ne 4y ago
    It is a mistake to think merely translating bureaucratic lingo will suddenly lead to an understanding of it. Even if the individual words are understood, it is likely the meaning is still lost. Translating bureaucratic lingo may certainly speed up the route to understanding, but one would still need to internalize laws and processes. Most bureaucratic lingo is tricky even for natives. Example from Dutch bureaucracy: "A household receiving an allowance under the Participation Act must contend with the Cost Sharing Norm". That's all nominally English, but effectively gibberish without an understanding of what the Participation Act is all about. There is no easy technical solution at hand here. That doesn't mean the author doesn't have a point concerning the notoriously obtuse German bureaucratic machine. But any real solution will have to involve a cultural change.
• dj_mc_merlin 4y ago
  > My UG took days to be registered, GmbH took 5 months due to international founders And presumably thousands of euros in fees. And you think this is fine? Why, when other countries do it quicker and faster? > when I arrived in the UK in 2006, I didn’t expect that everyone will explain to me things in Polish. I actually had to learn the language. Yes but nobody speaks Polish except the Polish, or?
  • rad_gruchalski 4y ago
    > Yes but nobody speaks Polish except the Polish, or? Now substitute Polish with Spanish or Chinese and take note how dumb that statement sounds.
    • dj_mc_merlin 4y ago
      Spanish speakers: more than half a billion. Chinese speakers: more than a billion. Polish speakers: 50 million. Not comparable.
      • sdfhbdf 4y ago
        The point is where you arrive to a country you should be the one adjusting you language to them and not the other way around. That applies even when you speak the most popular language - arguably chinese - and arrive to anglophone countries which speak the “Internet language”
        • incrudible 4y ago
          Ostensibly, countries like Germany are competing to attract talent and investment, mandatory bureaucracy in a relatively obscure language is going to be a detriment to that.
          • pjmlp 4y ago
            A language spoken across Germany, Switzerland, Austria, Lichtenstein, and Luxembourg, parallel in weight to French across European countries, and in the old days the lingua Franca in Eastern Europe, which would rather speak German than English. Hardly obscure.
• NavinF 4y ago
  > GmbH took 5 months due to international founders Wow that's insane. Compare that to creating a Delaware LLC and getting an EIN. No wonder there are hardly any startups in Europe.
  • rad_gruchalski 4y ago
    That’s how long it took Finanzamt to do all background checks on all documentation.
  • jojobas 4y ago
    It appears deliberate. They don't necessarily want a bunch of Delaware-style entities doing multilayered shell shenanigans (they outsourced it to the Netherlands).
  • vidarh 4y ago
    Having spent the last few years analysing European startup data, the idea there are "hardly any startups in Europe" does not match my experience. Fewer who seek VC funding, sure.
    • barry-cotter 4y ago
      If you don’t intend to get big, fast, then you’re founding a normal business. Seeking VC funding isn’t a necessity but it’s certainly correlated with that desire.
      • vidarh 4y ago
        Note I said fewer who seek VC funding, not that there aren't plenty.
    • deleted 4y ago
      [deleted]
  • sooyoo 4y ago
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• harha 4y ago
  Setting up is still the easy part, managing (the bureaucracy part, not the actual business) and getting rid of it is much more involved. I don’t see any positive factors to being in Germany as an entrepreneur, only reason to be there is if the business can’t do otherwise (eg serving something physical to a German customer) or you already inherited something and the cost of moving would massively outweigh the benefits. Edit: note on the inheriting part, afaik if it’s a company they tax you for the sale if you move your tax residency away (in the EU you have a few years to pay, otherwise right away). That’s also another risk when setting something up in Germany.
  • rad_gruchalski 4y ago
    Yeah, managing is some work. The best is to find one of those Steuerberatungsgesellschaft and let them guide you through everything. Filing taxes will cost you €2500+ per year for a GmbH, €1300 for an UG. Getting rid of it is easy. You file an Auflösung, sign it at the notary, ask them to notify agencies on your behalf. Then you have one year to liquidate. Not sure what’s difficult about it.
    • harha 4y ago
      Getting to a notary when not in Germany, all the agencies, getting to the notary a second time when it’s done, all the things you need to file (3 tax filings, 2 different accounting statements, etc), getting the letters from the agencies - all when the company is essentially dead and doesn’t have any extra 2500€ per year left for filing. Could all be done with a small number of forms and online or for a small fee in many other countries. What’s the benefit of doing all that?
      • rad_gruchalski 4y ago
        > all when the company is essentially dead and doesn’t have any extra 2500€ per year left for filing That’s bankruptcy. > Could all be done with a small number of forms and online or for a small fee in many other countries. > What’s the benefit of doing all that? Frankly, I have no idea. Maybe they do want to make sure that the process stays legitimate. I believe you can do all of this without having to show up in the country by giving a lawyer a power of attorney. But you better have the money to close all financial matters. When I was shutting down the Ltd, I did it via my tax accountant. And yes, I did tax filings for the last year too. The only difference was that there was no grace period for liquidation.
• wellareyousure 4y ago
  I don’t comprehend how or why you are defending bureaucracy, on the idea that because the capriciousness he experienced doesn’t exactly match the capriciousness you experienced, then he must be wrong. Surely you see the irony in that.
• yieldcrv 4y ago
  The old world notary concept is not the same as the new world’s or the crossdrift back to a modern UK old world notaries are an entrenched protectionist industry that function more similar to what lawyers do, or at least have similar weight with the addition of being required slow a lot of things down and will be unfamiliar to new world + UK similarly, the new world doesn't require share capital anywhere. where it is a common “proof of stake” system to reduce spam and capitalize the country’s coffers in the old world
• SanjayMehta 4y ago
  I've had visitors complain bitterly that they can't get a pre-paid SIM without providing identity and address proof while apparently they can back home wherever. The concept that rules differ across nations should not be so hard to grasp.
  • Major_Grooves 4y ago
    tbh i was a bit surprised the other day when I got a pre-paid SIM card the other day that we had to do a video-ident session to use it!
  • brigandish 4y ago
    It's not ever a surprise that rules differ abroad, it's that rules can be surprisingly backwards i.e. they make the lives of people doing day to day things harder. That's when people remark on rules (and sometimes in the positive when things are easier than they're used to, but your example is not that).
  • jonathanstrange 4y ago
    Well, I was surprised as a German living abroad in the EU when I went to visit family in Germany and realized that my phone stopped working. My pre-paid card used to work in Germany for 10 years before that but Germany decided to switch it off. So now nobody can reach me whenever I'm in Germany. It's not entirely clear what the advantage of that is.
    • hef19898 4y ago
      Since roaming isn't a thing anymore in the EU, why would you need a German sim card/phone number? And it is not "Germany" that decided that, but rather what ever provider you use.
      • jonathanstrange 4y ago
        I wouldn't, and it is decided by new German telecom regulation that went into force last year. The card I'm using in Portugal no longer works when I visit Germany, because it's a pre-paid card.
• deleted 4y ago
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• hrbf 4y ago
  I believe the author’s point to be that due to no English translation available, the already involved process in Germany becomes unnecessarily hard for a non-native speaker. As a native speaker I can attest to lots of gobbledygook official documents I had to deal with in my lifetime. The amount of paper you have to deal with when running a business is truly staggering. Bureaucracy is indeed a rampant runaway force in Germany. Every attempt at reducing it will inevitably create more of it, because, in the bureaucratic mind, you now have to create an oversight committee to control the adherence to the decree of reduction. I believe this to be a universal constant: you cannot task bureaucracy to with making itself superfluous. Digital services are a decade behind here, since most bureaucrats fight tooth and nail against them, for fear of losing their job.
  • Major_Grooves 4y ago
    indeed. As I was doing the process with two native German speakers, the language was really the minor part of the problem. Really it is the overall process that is absurd.
  • lynx23 4y ago
    Then the author should probably register a company in an english speaking country. Go figure.
    • pembrook 4y ago
      And this kind of attitude is why Europe’s future prospects don’t look great. Based on the demographics, most European countries are going to have to start importing young people (immigrants) if they want to keep their social welfare systems up for the next generation. It’s a well known fact that first generation immigrants often have the highest rates of entrepreneurship. Yet, unlike the US, which was created around the idea of being a nation of immigrants, Europe does a really bad job of integrating people (not unique to Europe, it’s really the default state of humans). English is the lingua franca of Europe. To make it hard for the people most likely to start a business (immigrants) to do so, is astonishingly short sighted. Where do you think the tax money that pays for the salaries of the 5 million German government workers rubber stamping all these documents comes from?
• hef19898 4y ago
  I can confirm all of the above, except the international founder thing, kind of. I went through the GmbH thing as a solo founder, which went from lawyer (not really necessary, you can use standard incorporation legalese), notary, bank to a steuerberater. All that took all of 2 weeks, getting a VAT number took the longest with a month or so if memory serves well. I had a UG, still do so, with a partner (non-German citizen but a German resident) that started out as a JV for the above mentioned GmbH and ended up with me as the 50% shareholder after the GmbH was closed down. That went even faster than the GmbH, again getting a VAT number took the most time (tax authorities in my city are so bad that most companies just move 2 km into another community over it). I said it before, and I say it again, GmbH set up (or incorporation in general) is something almost every single mom-and-pop retail store and every single contractor shop with more than two people goes through. How smart can start-up founders be if they almost fail at something all those lowely (sarcasm, I have the utmost respect for those traditional and small scale entrepreneurs and blue collar companies) do with a singoe complaint? Maybe, if the basic legal things about incorporation go above your head, choose a different jurisdiction or, well, maybe flubding and running a company just isn't for you... EDIT: Why do people insist on the 25k captial? Half of that is ok, founders are on the hook for the reminder. Also, we talk about start-ups, potentially raising millions of VC money. Why can't those founders be bothered with coming up with 25 thousand? Unless, of course, people aren't actually serious about running a business, aka the real "life style businesses", as opposed to those run by people who actually have to earn their living with a company. Also, the stab, or whatever it was, at the German subreddit over his entitled English requirement (try that in the UK or the US with a non-English language) is just pathetic. And honestly, no amount of language mastery enables you to read and understand legal documents, regardless of the language, without a legal background in the particular domain. But hey, if notaries are outdated maybe we don't lawyers neither as long as we have a native language speaker?
  • thomascarney 4y ago
    I think a broader question for the EU is whether ever greater integration is possible without some standardization around a common "admin" language. Having lived in several EU countries, I love learning new languages, but it does make day-to-day life much harder, not to mention more complex topics such as starting companies. It's conceivable that Germany could introduce English an official second language (having multiple official languages is common in the EU), even if just for certain sections of legal life. At the end of the day, EU citizens have fairly robust rights to live and work in other EU countries, so it's not a privilege. Providing ways for those people to integrate better into the legal systems would be beneficial to creating a more unified Europe.
• aestetix 4y ago
  > Regarding the language. The only thing you’re going to hear as a response to that entitlement: “this is Germany, we do this the German way”. I’m not German, just fyi… you know, when I arrived in the UK in 2006, I didn’t expect that everyone will explain to me things in Polish. I actually had to learn the language. That's where he lost me and I stopped reading. It's funny that I only ever hear this comment about English. If the language barrier is that hard, then hire a translator to work with you.
• isodev 4y ago
  The procedure in Germany is very similar to that in Belgium (and most EU countries), I don't see why the OP opted to tackle every step of the process manually instead of delegating most of it to the Steuerberater. Regarding language, I see little reason to make an effort to support it when alternatives are available. If you are an expat/foreigner and unable to speak a local language you can usually pay your accountant/lawyer or a dedicated company to carry out the procedures for you and explain to you (in your preferred language) what you need to know. This is no different to other countries, for example here in Belgium you will have to do the process in Dutch or French (depending on the region). Here it's also common to hire an accountant and a "social secretary" company that specialises in facilitating the administration and book keeping of your company so you can focus day to day business. edit: typos
  • fauigerzigerk 4y ago
    >Regarding language, unfortunately English is no longer a EU language and so I see little reason to make an effort to support it when alternatives are available. Of course it is an EU language as Ireland is still a member. Also, alternatives to English are not readily available to the overwhelming majority of people in Europe or outside. English is the language of international business and science.
  • _vbnz 4y ago
    > Regarding language, unfortunately English is no longer a EU language and so I see little reason to make an effort to support it when alternatives are available. What about Ireland and Malta? Also English is the language of international business. It's crazy not to support it. Germany is a technologically backward, conservative and anti-innovation backwater. From refusing card payments to absurd "privacy" laws (banning Google Street View and use of CCTV, etc.) and no digital identification, stopping nuclear power, etc. It's terrible how much influence such a conservative backwater has on the EU, and actually makes me skeptical of the EU as a whole. For example, the GDPR is a nightmare for startups - where a few angry customers can cause you hundreds of thousands of Euros in legal costs and implementation issues. It really destroys the ability to iterate quickly.
• nip 4y ago
  > you know, when I arrived in the UK in 2006, I didn’t expect that everyone will explain to me things in Polish. I actually had to learn the language. Expecting the immigrants to speak the language is one thing and should be mandatory, something that many countries in EU have failed to enforce. Expecting entrepreneurs to speak the language to set up their company is a failure of the state. Everything should be done to ensure that new businesses can prosper. I emigrated from old Europe (France) to new Europe (Estonia) 8 years ago. I’ve experienced the bureaucracy that steals time and the one that saves it.