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I have shares in a bootstrapped Gmbh via a holding company. Germany is a complex place to do business for non native speakers and it is generally financially ri

I have shares in a bootstrapped Gmbh via a holding company. Germany is a complex place to do business for non native speakers and it is generally financially risky to do business here. But if you structure it right, the flip side is that Germany has a lot of family owned smaller and larger businesses. The economy kind of runs on companies like that. So, it is definitely possible to be an entrepreneur in this country. I don't actually mind paying taxes (to a point); I think there's a fairness in wealthy people doing their part for supporting the society they are a part of that supports them. What I do mind is the incentive structure in Germany is geared towards discouraging people from being entrepreneurial, taking calculated risks, and generally trying to do new things. You take on a lot of personal risk when you found a company here. You are dealing from day one with greedy accountants, endless bureaucracy, a tax office that wants to squeeze you before you even have any revenue, etc. I'm bleeding cash via my holding company that's effectively running on my savings. This thing serves no purpose other than to insure me against potentially succeeding and not bankrupting myself in the process. Success here would be me generating a lot of tax income, employment, etc. I.e. things that most economies would regard as rather desirable things. The whole point of limited liability companies in other countries is to de-risk the process of creating new businesses for individuals so that people might do innovative things that benefit the economy. Germany does the opposite. It actively discourages people from doing that. And a Gmbh actually exposes you to a lot of liability. Bootstrapping means you take a lot of opportunity cost. For example by taking no or a very low salary. So the tax office creaming off profits before you even had a chance to pay yourself is not helpful. That's literally a situation we face now. We've been inching closer to break even this year. We went from the edge of bankruptcy to having a bank account that is able to sustain us well into next year in the space of a few months. This has been a long journey of about four years. We've had part of the German bureaucracy trying to support us and other parts of it doing their best to frustrate that. It's internally conflicted on this. The situation does not compare well to some other countries in Europe where this stuff is a lot easier, less risky, has way less friction, and takes way less time. Though in fairness, lots of EU countries have their own unique challenges for trying to do business. Some Germans get really defensive on this topic. But the fact is that Germany is bordering on a recession right now and it needs the next generation to step in the vacuum of the retiring baby boom generation and its imploding car industry. And that's before we start talking about its crumbling infrastructure, high energy prices, etc. Germany has economic issues. And the fix for many of those issues is for it to invest. And not in its dying industries but in new ones that can replace them and the infrastructure to support the economy. Which includes its legal framework. The trick is investing efficiently and effectively. And it's not currently able to do that. The #1 thing holding that back is the German rules, bureaucracy, counter productive rules and policy, etc. Easy to fix on paper. But that requires a change in attitude here. Apparently we have some elections coming up. Maybe some change is possible.

noduerme 2y ago
Interesting post. >> The whole point of limited liability companies in other countries is to de-risk the process of creating new businesses for individuals so that people might do innovative things that benefit the economy. Germany does the opposite. It actively discourages people from doing that. And a Gmbh actually exposes you to a lot of liability. Can you elucidate what you think the philosophy or psychology is that drives this kind of anti-risk-taking attitude or, as you said, why "Some Germans get really defensive on this topic"? It sounds cultural rather than logical. [edit: My first guess would be that it's a product of a social welfare state, overly secure in its benefits and redistribution of wealth in the most generic sense; but sometimes I've observed some other types of self-assured blindness to simple reality in Germany that I suspect have something to do with it, and that's what I'm curious about].
- jillesvangurp 2y ago
  It is definitely a weird cultural thing. I can speculate a bit. It might have some roots in social well fare. But I've also lived in Sweden and Finland which have a very different attitude towards building tech companies. Especially Finland is quite successful at doing startups and scaleups. Especially considering its small population. And of course both countries have a strong social well fare culture. And Germany is actually fairly conservative on the spectrum. E.g. minimum wage did not even exist here until fairly recently. State pensions aren't that great, etc. I'm from the Netherlands originally, our social security is a lot better and more efficient. And so is our economy, infrastructure, healthcare system and all the other things that are clearly very broken and neglected in Germany. It's very visible when you cross the border. The state of the roads is very different on both sides of the border. That's true for most countries that border Germany. Germans just seem very reluctant to change anything. There's a lot of hesitation doing anything. That's also why their infrastructure is such a mess. Big investments are risky. So they prefer not to. Their default attitude to almost anything is "no". Modernizing anything is frowned upon. So they still bank like it's the nineteen eighties, which is stupidly annoying. They stubbornly stick with a lot of paper based processes. And they employ a lot of pencil pushers, accountants, lawyers, etc. that actually rely economically on things not changing. And of course they refuse to modernize rules that flat out barely make any sense. It's always been this way, it can't be that bad, etc. They are very proud of keeping their national debt low. But that also means they've been neglecting their infrastructure for decades. Which is now affecting them economically. The way out would be massive investments. But that requires changes they are not comfortable making. So they are just dilly dallying and going around in circles. With startup culture, their own rules are stopping foreigners from investing in their german companies. Too hard. too risky, etc. That's irrational. They should be welcoming that cash. Not putting up lots of obstacles. That money would go directly into their economy. But instead it's going elsewhere. Lots of German companies with their headquarters in Amsterdam, Dublin, London, etc.

noduerme 2y ago

Interesting post. >> The whole point of limited liability companies in other countries is to de-risk the process of creating new businesses for individuals so that people might do innovative things that benefit the economy. Germany does the opposite. It actively discourages people from doing that. And a Gmbh actually exposes you to a lot of liability. Can you elucidate what you think the philosophy or psychology is that drives this kind of anti-risk-taking attitude or, as you said, why "Some Germans get really defensive on this topic"? It sounds cultural rather than logical. [edit: My first guess would be that it's a product of a social welfare state, overly secure in its benefits and redistribution of wealth in the most generic sense; but sometimes I've observed some other types of self-assured blindness to simple reality in Germany that I suspect have something to do with it, and that's what I'm curious about].

jillesvangurp 2y ago
It is definitely a weird cultural thing. I can speculate a bit. It might have some roots in social well fare. But I've also lived in Sweden and Finland which have a very different attitude towards building tech companies. Especially Finland is quite successful at doing startups and scaleups. Especially considering its small population. And of course both countries have a strong social well fare culture. And Germany is actually fairly conservative on the spectrum. E.g. minimum wage did not even exist here until fairly recently. State pensions aren't that great, etc. I'm from the Netherlands originally, our social security is a lot better and more efficient. And so is our economy, infrastructure, healthcare system and all the other things that are clearly very broken and neglected in Germany. It's very visible when you cross the border. The state of the roads is very different on both sides of the border. That's true for most countries that border Germany. Germans just seem very reluctant to change anything. There's a lot of hesitation doing anything. That's also why their infrastructure is such a mess. Big investments are risky. So they prefer not to. Their default attitude to almost anything is "no". Modernizing anything is frowned upon. So they still bank like it's the nineteen eighties, which is stupidly annoying. They stubbornly stick with a lot of paper based processes. And they employ a lot of pencil pushers, accountants, lawyers, etc. that actually rely economically on things not changing. And of course they refuse to modernize rules that flat out barely make any sense. It's always been this way, it can't be that bad, etc. They are very proud of keeping their national debt low. But that also means they've been neglecting their infrastructure for decades. Which is now affecting them economically. The way out would be massive investments. But that requires changes they are not comfortable making. So they are just dilly dallying and going around in circles. With startup culture, their own rules are stopping foreigners from investing in their german companies. Too hard. too risky, etc. That's irrational. They should be welcoming that cash. Not putting up lots of obstacles. That money would go directly into their economy. But instead it's going elsewhere. Lots of German companies with their headquarters in Amsterdam, Dublin, London, etc.