2 ms·

Obviously the writer never tried to actually start a small business in any of the countries mentioned. It's so needlessly complicated and full of bureaucratic m

Obviously the writer never tried to actually start a small business in any of the countries mentioned. It's so needlessly complicated and full of bureaucratic measures that the entrepreneurs have to turn to bribery and illegal corner-cutting to stay afloat. As an example, take Belgium, where I am right now, trying to start a business with a partner. We thought it'll be easy - there are plenty of big name companies here, so it must be a good place for business, right? Turns out you can't just go register a company, open a bank account and start working. In order to work with suppliers and clients, you need at least a bank account for your business (or you'll have a lot of issues with the tax authorities). No, you need to prove that your new company is worth registering, that it will make money, you need to create a full business plan and financial predictions, make a list of suppliers/partners/clients, have proof that you worked in and know the industry, as well as prove that you have management skills (either 2 years as a manager or via management school in the EU) to show to the government - as you can imagine, that's a bit hard to do for a new entrepreneur even in an established industry. Also, you need to show that you've deposited the initial capital into your bank account (this is an amazingly stupid Catch-22). Then, the banks. Opening a checking account is like going to the king and asking for permission to farm the land or something. You must have initial capital, you must show them that they don't bear any risk, you must go through security checks and then wait a month until the application is processed at the main office, and they can decline your account if they don't like something. Then you deposit the cash and finish registering the company. We've had two banks refuse to open an account because our main activity is "risky" - that's for a current checking account, we don't need a loan or credit line. Only a local bank finally accepted the application. And other BS... It's definitely harder than the US or UK. From what I hear, the same situation is in Germany, Italy, Spain and Bulgaria (the latter has only a 10% income tax, so it's quite popular with EU companies)...

Kliment 14y ago
I don't know about the other countries you listed, but the process for registering a company in Germany got significantly simpler a few years back with the introduction of the UG. I'll attempt to describe it in case anyone is considering founding in Germany. The UG is rather similar to the UK Limited, which is what German companies were using before due to onerous regulations. There is a standard protocol that you can modify to match your setup. You pick a company name, check with the local chamber of commerce to make sure it's not in use, and submit the documentation to a notary. You don't have to prove anything except that you are in possession of initial capital (may be any amount greater or equal to 1 euro) and have not been sentenced for fraud. The notary issues a document that you can use to sign up for a bank account. You go to the bank with it, and give them the initial capital, which they deposit into your company's new bank account. You only have to prove identity and place of residence of the company. It's easiest initially to register your company's place of residence as your own address. It's easy enough to change later. The bank gives you a proof of payment, which you give to the notary, and the notary signs off on it and forwards your case file to the trade registry. You pay the notary (you can make this payment from the new corporate account or from your personal funds). The trade registry sends you a bill, which you pay. Then you get entered into the registry and sent proof of this. With this registry entry, you have a company. This document is proof of your company's existence. The tax authority will send you a questionnaire asking you to estimate the income of your first two years. This is an estimate, and is nonbinding (but it's easier later if you guess approximately right). You fill that in, and you get issued a tax number. With that tax number, you can issue invoices, and file tax reports. In addition, you need to write yourself an employment contract if you receive salary. Now, the UG is a restricted variant of the most common company format in Germany, the GmbH. There are restrictions on the number of shareholders and the amount of profits that may be paid out to shareholders. You are required to hold a quarter of profits each year until you reach the minimum capital of a GmbH. You can then ask to be reentered into the trade registry as a GmbH, and the restrictions are lifted. The tax authorities will happily tell you what you need to be aware of when you first sign up, and will remind you with sternly-worded letters if you miss anything. The company registration process takes a couple weeks of running around, at most. There is an issue you need to be aware of though - company registration information is public. This means a number of stationary, supplies, and whatnot peddlers will send you junk mail. Do not put an email address in your company registration data. A number of scammers will attempt to get you to pay frivolous bills. If you receive a bill for several hundred euros from a company you never heard of claiming to be a government agency, throw it away. In summary, it's not easy, and it's not impossible. Nowhere is a business plan or proof of competence required, nor large amounts of capital. You will get asked a LOT of questions if you apply for a loan or insurance with a fresh company with 1EUR starting capital, but that comes with the territory. Getting a company credit card or bank account is no issue at all.
- jakeonthemove 14y ago
  That's definitely a step in the right direction - I know it was pretty hard to open a GmbH just a few years ago (2009 I believe). Germany is much more entrepreneur-friendly, too. All the back and forth with papers isn't that hard, but why can't it be simple like in the US - open an LLC online and a bank account in less than an hour and you're good to go. In Europe, opening a company is serious business. In North America (well, US and Canada), it's a given...
iopuy 14y ago
I had to laugh at this because I am in the exact same process and I am an American. For a non-EU citizen I'm starting to think this is impossible. Essentially one needs to apply for a "professional card" which is good for 5 years before enter the country to work one of the requirements, which are numerous, is to already OWN A BUSINESS IN BELGIUM! WTF! Starting a company before arriving n the country is hard enough but you are asked for your local address and company address in the process. Chances are I'm not going to have that information sorted out until I enter the country. Classic Catch-22. Good luck with the business and keep us informed, know at least HNer will be looking forward to your updates.

Kliment 14y ago

I don't know about the other countries you listed, but the process for registering a company in Germany got significantly simpler a few years back with the introduction of the UG. I'll attempt to describe it in case anyone is considering founding in Germany. The UG is rather similar to the UK Limited, which is what German companies were using before due to onerous regulations. There is a standard protocol that you can modify to match your setup. You pick a company name, check with the local chamber of commerce to make sure it's not in use, and submit the documentation to a notary. You don't have to prove anything except that you are in possession of initial capital (may be any amount greater or equal to 1 euro) and have not been sentenced for fraud. The notary issues a document that you can use to sign up for a bank account. You go to the bank with it, and give them the initial capital, which they deposit into your company's new bank account. You only have to prove identity and place of residence of the company. It's easiest initially to register your company's place of residence as your own address. It's easy enough to change later. The bank gives you a proof of payment, which you give to the notary, and the notary signs off on it and forwards your case file to the trade registry. You pay the notary (you can make this payment from the new corporate account or from your personal funds). The trade registry sends you a bill, which you pay. Then you get entered into the registry and sent proof of this. With this registry entry, you have a company. This document is proof of your company's existence. The tax authority will send you a questionnaire asking you to estimate the income of your first two years. This is an estimate, and is nonbinding (but it's easier later if you guess approximately right). You fill that in, and you get issued a tax number. With that tax number, you can issue invoices, and file tax reports. In addition, you need to write yourself an employment contract if you receive salary. Now, the UG is a restricted variant of the most common company format in Germany, the GmbH. There are restrictions on the number of shareholders and the amount of profits that may be paid out to shareholders. You are required to hold a quarter of profits each year until you reach the minimum capital of a GmbH. You can then ask to be reentered into the trade registry as a GmbH, and the restrictions are lifted. The tax authorities will happily tell you what you need to be aware of when you first sign up, and will remind you with sternly-worded letters if you miss anything. The company registration process takes a couple weeks of running around, at most. There is an issue you need to be aware of though - company registration information is public. This means a number of stationary, supplies, and whatnot peddlers will send you junk mail. Do not put an email address in your company registration data. A number of scammers will attempt to get you to pay frivolous bills. If you receive a bill for several hundred euros from a company you never heard of claiming to be a government agency, throw it away. In summary, it's not easy, and it's not impossible. Nowhere is a business plan or proof of competence required, nor large amounts of capital. You will get asked a LOT of questions if you apply for a loan or insurance with a fresh company with 1EUR starting capital, but that comes with the territory. Getting a company credit card or bank account is no issue at all.

jakeonthemove 14y ago
That's definitely a step in the right direction - I know it was pretty hard to open a GmbH just a few years ago (2009 I believe). Germany is much more entrepreneur-friendly, too. All the back and forth with papers isn't that hard, but why can't it be simple like in the US - open an LLC online and a bank account in less than an hour and you're good to go. In Europe, opening a company is serious business. In North America (well, US and Canada), it's a given...

iopuy 14y ago

I had to laugh at this because I am in the exact same process and I am an American. For a non-EU citizen I'm starting to think this is impossible. Essentially one needs to apply for a "professional card" which is good for 5 years before enter the country to work one of the requirements, which are numerous, is to already OWN A BUSINESS IN BELGIUM! WTF! Starting a company before arriving n the country is hard enough but you are asked for your local address and company address in the process. Chances are I'm not going to have that information sorted out until I enter the country. Classic Catch-22. Good luck with the business and keep us informed, know at least HNer will be looking forward to your updates.