14 ms·

Founding a company in Germany: €9600, 152 days and I still can't send an invoice

• tom86150 4mo ago
  [dead]
• stop50 4mo ago
  For information: GmbH & Co. KG is one of the most complicated forms an company can be founded, the same goes if the inner company is an UG. Many things have to be done twice. The only good thing is that an investor or an owner are not liable with their private money.
  • Bombthecat 4mo ago
    He wanted to go all out and maximise "company form". Same as optimizing your website for hundred of thousands of visitors even if you have only like one hundred visitors...
    • earcar 4mo ago
      You get one chance at getting your company form right. Any other new chance costs a ton of money in restructuring. Software is malleable, companies are less so.
      • WaitWaitWha 4mo ago
        I am not familiar with German business entity structures, so this is very interesting. So, if I started a sole proprietorship, it is not possible to convert it to a full blown, privately held corporation in Germany?
        • saltmate 4mo ago
          It is obviously possible, the process is probably very similar in effort and expenses to founding it in that form directly.
    • Aurornis 4mo ago
      If the parent comment is correct and this form is necessary for personal financial protection, I wouldn’t consider that “all out”. That’s the bare minimum consideration for a viable company structure.
      • valzam 4mo ago
        OP wanted to set up a nested copmany structure. Instead of Person -> LLC it goes Person -> Limited Partnership --> LLC. The in between company is only for tax-efficiency and has nothing to do with limited liability.
        • kuschku 4mo ago
          Even then you'd usually go with a Person -> Holding UG -> Startup UG structure. That's a few hours and less than a thousand Euros.
      • mpweiher 4mo ago
        It's not.
      • dgellow 4mo ago
        It’s not necessary. They did something completely overkill
  • earcar 4mo ago
    It is not complicated, it is in fact quite standard here in Germany. I explain in the post how the other options are worse.
    • sevenzero 4mo ago
      It is one of the most complicated forms. A GmbH alone is good enough in 99.99% of cases, and its usually done really quick. Also, if you believe in your product there usually isn't a reason to go for a GmbH this early. You can send invoices a lot earlier with just a eK or GbR. Its not an issue to adhere with your private money if your product isn't causing damages.
      • earcar 4mo ago
        Not in mine. Check the post.
        • sevenzero 4mo ago
          So basically you go for the legal stuff only really big companies use (instead of changing once its necessary) because you dont believe in your own product and dont want to be held liable, got it.
          • Leptonmaniac 4mo ago
            But hey, at least they get to write about their mid company name ("Plenty" - lol) got (rightfully) rejected...
          • scarmig 4mo ago
            Do people in Germany see limited liability as some kind of crazy thing only a scammer would want?
            • sevenzero 4mo ago
              Depends. Given OP built yet another AI tool, yea, I want to hold them liable in case something goes wrong (not that I'd buy these tools in the first place).
  • Aurornis 4mo ago
    > The only good thing is that an investor or an owner are not liable with their private money. That’s incredibly important. More than a footnote. I would consider any other form to be non-viable if it doesn’t have such protections. For comparison, starting an LLC in the United States is a trivial operation. I can’t even remember how long it took me to set mine up because it was a trivial event. Maybe a couple hours, mostly research? I also have to fill out an online form and pay a few dollars every year to renew the LLC.
    • fifafu 4mo ago
      You can get the same in Germany with the much simpler GmbH or UG. GmbH & Co. KG is much more complex and mostly used to save some taxes in some scenarios. (However I absolutely agree that all of this is much too complicated and slow here in Germany)
      • ExpertAdvisor01 4mo ago
        In Germany you need a notary in the us you don't.
        • wongarsu 4mo ago
          The notary adds about a week to the process (2-3 hours of your time, plus the time to wait for the appointment), and about $1000 (depends on how much money you put in the company). And for "standard" setups you can skip the lawyer and simply use the templates and "free" legal advice from the notary (free as in "included in the notary fee you have to pay anyways") Yes, it's more involved than an online form. But in the grand scheme of things, a notary is neither a huge expense (the tax advisor will likely cost you more) nor a big time sink
          • nradov 4mo ago
            Why do Europeans put up with that notary nonsense? Ideally almost all notary jobs should be destroyed.
    • 4mo ago
• ptrmcrthr 4mo ago
  "The one thing the state exists to let me do, bill them cleanly, is the one thing I still can’t." I sympathize but I'm not sure that is the sole reason the German state exists.
  • earcar 4mo ago
    "one" != "only one"
    • functionmouse 4mo ago
      "The one thing" actually does == "only one"
    • jazzyjackson 4mo ago
      “The one” != “a”
    • usrusr 4mo ago
      The quote is not "one", it's "The one".
• VadimPR 4mo ago
  Before Europe gets lumped in as one country, founding a company in Netherlands and Sweden, speaking from personal experience, is a breeze. Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start!
  • whazor 4mo ago
    In Germany it might be easier to open a company remotely via Estonia
    • earcar 4mo ago
      That way, AFAIK, the German government will determine that the "place of effective management" is Germany, and tax you also there. Double taxation is not better.
      • moondowner 4mo ago
        DE & EE should have a double taxation agreement. https://www.fin.ee/en/double-taxation-agreements https://www.fin.ee/en/double-taxation-agreements
      • ma2kx 4mo ago
        I would say that depends of the company's legal form. If you have an "AG" or "GmbH" you get double taxed anyway, one time the company and than again your salary. So if you have an Estonian equevilant of a GmbH/AG your company will get taxed by Estonia and your salary by Germany. The Estonian E-Residency Website at least confirms my assumption but in case of Germany I could be very well wrong of course... https://www.e-resident.gov.ee/understanding-cross-border-taxes/ https://www.e-resident.gov.ee/understanding-cross-border-tax...
        • ExpertAdvisor01 4mo ago
          I think you misunderstood double taxation . You probably understood it as taxation on corporate and personal level. But in this context it means taxation in two jurisdiction (Estonia,Germany)
• semessier 4mo ago
  the real problems with administration dome starts after founding in many but not all European countries. There is light at the end of the tunnel as an EU Inc. is proposed. However the bureaucrats in probable but all countries will try to water it down to pointless to keep or extend their responsibility territory and duties.
• bibinou 4mo ago
  The mantra has always been to only create the company after sending the first invoice. Edit: oh it's setup like this to cheat on taxes.
  • earcar 4mo ago
    I had already people wanting to work with me before even starting the company. Couldn't send them invoices. Most importantly: didn't speed up the process!
    • purerandomness 4mo ago
      You can always send invoices without a company. Your tax office will sort it out retrospectively.
• jingpostmedia 4mo ago
  [flagged]
  • lbriner 4mo ago
    This does bring its own share of problems. 1000s of companies are registered in the UK with literally no checks. No address checking so people just pick a random address to register from the phone book! When it comes to tax issues etc. it turns out the company registration is meaningless. The sweet spot has to be somewhere in the middle. Starting a company shouldn't be something you expect to do in a day but it also shouldn't require you to sell a kidney or fill in pointless forms.
    • ExoticPearTree 4mo ago
      > When it comes to tax issues etc. it turns out the company registration is meaningless. Taxes have nothing to do with the physical location of the company. You go after the owners, and I'm pretty sure you can't open a company in the UK anonymously.
    • Oras 4mo ago
      There is an identity and address checks now in the UK. Even banks are required to validate now, had my bank asking me to validate details even when i have my business for 6 years, same company, same address, and same bank account.
      • sscaryterry 4mo ago
        Yep, and it can get quite tedious.
• jascha_eng 4mo ago
  idk I founded a UG within a few weeks recently. Yeh it costs me maybe a thousand or so in notary fees but that's it.
  • tchalla 4mo ago
    A 1000 or so is … “that’s it”?
    • jascha_eng 4mo ago
      I mean if you have an idea or project that convinces you its worth to found a company, a thousand bucks is not a great hinderance. If the 1000 bucks are a hinderance you probably shouldnt found a company. It's a decent filter if you are serious about it.
  • dcrazy 4mo ago
    You know how much it costs in California? $70.
• lnsru 4mo ago
  I am an electrician. Got my certification done with Handwerkskammer, went to the city hall, registered my company and filled online form rejecting the option with VAT number since all my clients are in greater Munich area. Same path could be chosen with VAT number. Ranting about choosing most complex business form and having no money for a consultant is not adequate in my eyes. Btw I am always liable as electrician (since it is dangerous) and can’t hide behind limited liability company in Germany.
  • ExoticPearTree 4mo ago
    > Ranting about choosing most complex business form and having no money for a consultant is not adequate in my eyes. You shouldn't need a consultant to open a company. Should be a form and that's it. Maybe an accountant to certify your books, but that's it.
    • mb_thd 4mo ago
      If you're choosing to go with the most complicated way of setting up a company, a consultant probably doesn't hurt.
      • Ekaros 4mo ago
        When you choose that you need double layer of limited liability. Maybe having a consultant is extremely good idea. To understand exactly what you need to do at both layers. And maybe in such setup some slow down should be fully expected. As one layer is acting for the other in your stead... To me things taking longer and being more complicated sounds entirely reasonable and natural in such setup...
    • bildung 4mo ago
      And you really don't have to. I just went to one a single meeting, signed a single piece of paper, paid 60€ (probably still <100€ these days) and was done with it. But as GP already alluded to: I didn't choose the structure that is very well known to be the complicated one.
    • 4mo ago
• throwaway15805 4mo ago
  Been there too. Paying thousands of € for a notary just to read some text you wrote out loud to you is absurd. The cherry on top is the exit tax: > And no, I could not just leave instead. My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving. This is ostensibly there to prevent large-scale tax fraud but has ridiculously low thresholds that make life difficult for anybody who is shareholder of even a small company.
  • Sweepi 4mo ago
    Maybe I am missing the point, but what is the alternative? You found a company in Germany, dont realize your gains, therefore dont pay taxes, then leave the country, realize your gains, and still dont pay taxes? Why should Germany or any other country allow this?
    • throwaway15805 4mo ago
      The issue is liquidity. The tax comes due as soon as you leave, but you might not be able to liquidate your shares quickly enough to be able to pay those taxes. Depending on how your company gets valued these can be eye-watering numbers. This is something you can solve with enough time, but if I get a job offer where I'm supposed to start in 2 months? Very inconvenient. (There are some ways to spread this out have this tax burden spread out over time, but it still represents significant friction)
      • Sweepi 4mo ago
        You own a company so valuable that the tax on selling it shares puts you in serious trouble, but you still need to a start "a job"? A Job that requires you to change your nationality/tax residency to a non EU-state? Edit: Maybe I should give an example: Lets say you build up a company, your shares are worth ~100k, while you payed yourself a living salary of ~2k so you could pay rent and buy groceries but not much more, especially no savings. Now you get on offer to work in the US for 180k/a, you sigh "finally" and just want to move, but the German wants 30k Taxes on your unrealized ~100k capital gain before your leave - Is this the kind of situation you are referring to?
• Kim_Bruning 4mo ago
  I looked into GmbH (german) , BV (dutch) , and OU (estonian) . GmbH seems very unpleasant. BV and OU are easier to obtain. But BV requires your primary place of business to be the Netherlands, which isn't always practical when you're trying to extend your activities internationally. OU is supposed to be better for international operations, but -because it's a single country initiative- creates new and interesting tax problems. At this time, the whole system seems to revolve around geographic location. As long as you stay put you're sort of fine, but if you move around within the EU, the law doesn't stay stable around you. This is impractical. EU Inc seems to be a new initiative to fix a lot of the patchwork problems, but doesn't seem to be live yet. ( https://commission.europa.eu/topics/business-and-industry/doing-business-eu/company-law-and-corporate-governance/eu-inc-new-harmonised-corporate-legal-regime_en https://commission.europa.eu/topics/business-and-industry/do... ) I'm told that interstate commerce in the US isn't always necessarily easier, mind. Maybe the EU can take some lessons learned.
  • ExoticPearTree 4mo ago
    > But BV requires your primary place of business to be the Netherlands, which isn't always practical when you're trying to extend your activities internationally You bill from the Netherlands and I think this is the only thing required. Uber in Europe charges your cards from Uber BV for example. And I think Uber is pretty international.
    • Kim_Bruning 4mo ago
      It can be done, but there's contortions to sort out to fit a square peg in a round hole. If someone has experience doing it right, I'd absolutely be willing to pay for their time to exchange advice.
    • markvdb 4mo ago
      Especially as a solo entrepreneur, your llc would have to have substance in the Netherlands. Otherwise, it risks getting requalified as a country-where-you-reside llc. Why would you otherwise voluntarily subject yourself to the extreme complexity of countries like Belgium or Germany if you could just set up a simple Bulgarian or Estonian llc?
• zurfer 4mo ago
  We outsourced it for 2.5k (extra) and it was still painful, took almost 2 months and worst of all wasted so much time and focus. The worst was sitting at the notary, and getting read out loud by her what we were about to sign (also paying for that). If you think about starting a company, spend some time to think through what it would mean for you to be a Delaware C Corp or an Estoinian one. It will increase your chances of success as you can focus on what matters.
  • markvdb 4mo ago
    > If you think about starting a company, spend some time to think through what it would mean for you to be a Delaware C Corp or an Estoinian one. It will increase your chances of success as you can focus on what matters. Moving to Estonia or - even bigger hurdles- the US is not without its distractions either....
• preya2k 4mo ago
  Not sure what he means with "2000€ share capital", which allegedly is locked. Typically, you can spend your "Stammkapital" for business purposes (e.g. in a GmbH). It doesn't need to stay in your bank account.
  • earcar 4mo ago
    The Stammkapital was required for the UG, and it's very much locked since the whole purpose of that is to take liability.
    • preya2k 4mo ago
      So for a UG it's a Kommanditeinlage. But it doesn't change the fact that you can spend this money for business purposes. You just can't wire it back to yourself or pay it to yourself as a wage. Feel free to buy office furniture or company devices with it. It's a common misunderstanding that this money needs to be reserved somewhere for liability purposes. That's not correct. You can spend it, both in a GmbH as well as in a UG. Look it up youself (e.g. https://www.anwalt.de/rechtstipps/stammkapital-muss-ich-das-stammkapital-aufheben-wann-liegt-eine-verdeckte-sacheinlage-vor_152285.html https://www.anwalt.de/rechtstipps/stammkapital-muss-ich-das-...)
      • CodesInChaos 4mo ago
        According to the article you linked, it can be used to pay yourself a wage, as long as it's not excessive.
  • Leptonmaniac 4mo ago
    The blog post does not read as written by someone who has understood the whole legal process, maybe that's where your confusion comes from.
• bartman 4mo ago
  Wait until you want to convert the UG to a GmbH and realize that it's not simple or cheap at all. It's not enough to have had properly filed tax returns every year, have a large enough profit-collection-line item in your books (25k EUR+) and then fill out a form. No, if you want to use the profit your UG was required to accrue to raise your capital stock to 25k and rename it to a GmbH you need to get your annual accounts audited. Or alternatively, you can pay in the difference between your current capital stock (e.g. 2k) and the 25k minimum for the UG and then rename the company and "just" have to pay for the notary, publishing to public records, court, ...
  • earcar 4mo ago
    Yes indeed. We converted Freshflow into a GmbH and needless to say it was expensive.
• WaitWaitWha 4mo ago
  I think most red tapes and bureaucracies have loop holes. For example, a different, simpler type of business type, then conversion to the actual desired type. At least, this has been my experience in a few countries I worked in. Sometimes it will cost more up front, but if the end result is significantly faster, maybe it is worth it. I am sorry he has to go through this just to start a business.
  • sph 4mo ago
    Yeah, ease of doing business is always proportional to the amount of money you spend to grease the wheels of bureaucracy, so to speak.
• Gingersnap123 4mo ago
  [dead]
• lifestyleguru 4mo ago
  The only way to start a company in Germany is Societas Europaea and have lawyer parents. Otherwise don't bother.
  • RandomLensman 4mo ago
    How do you create an SE from scratch?
    • lifestyleguru 4mo ago
      lawyer parents
• KingOfCoders 4mo ago
  (2026) 1.) Yes, it took 3 months to switch the company hq + IRS + Notar etc. 2.) But it really does depend a lot on the city, state etc. 3.) UG is 500 EUR - changing to GmbH is then also quite cheap
• Lucasoato 4mo ago
  Why so little? You are priviledged! Imagine 3 young Italians that would like to work together in a startup. Let's consider only the first year, imagine a B2B SaaS, they are incorporating but they'll work on the product and approach possible customers. Zero revenue. Well, if you followed the law, you probably would spend something between 23'000€ and 25'000€ in total. WITH NO REVENUE. This is because even if you work for free for your company, you still have to pay taxes for INPS, our pension system. And if someone invests in your company, you can't live out of nothing and would like to pay a founder even the minimum salary, YOU HAVE TO PAY INPS AGAIN. This is crazy, our country is a joke. EDIT: Adding a bit more of scary context and nice sprites. None of the common financial advisor you find in Italy have ever heard of funding ways or contract terms that are really well known globally. Do you want to include drag along and tag along clauses in your company statute? You have to talk with really expert lawyers and notaries in Milan that will bill you thousands of € for something that in Delaware is a pretty much standard single line of text.
  • earcar 4mo ago
    That sucks, my fellow Italian. I haven't looked into our country since I live abroad for a long time, but I'm also paying health insurance here which is not cheap at all, and haven't added it to the post since it's not necessarily a company spend. Cordiali saluti!
    • Lucasoato 4mo ago
      Che gli dei ti assistano in terra tedesca <3
  • philipwhiuk 4mo ago
    Having to pay into the social welfare system you benefit from :O :O :O :O
    • Lucasoato 4mo ago
      That's very funny, considering my generation won't have the pension we're paying for.
• FLHerne 4mo ago
  > Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. > And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH The post itself explains exactly why the first complaint is a fallacy and the second one is true: > The simplest setup is a sole proprietorship [...] also makes me personally liable for everything. A client sues? They are not suing a company. They are suing me. My savings, my apartment, my name. > So I wanted real limited liability, which means a company. The liabilities of a limited-liability company aren't your risk. The people who stand to lose out if your company folds are not you but your customers, creditors and anyone else with a claim to more than the company can repay. The more capital it has, the less likely it is to collapse while having more liabilities than assets.
  • phlsa 4mo ago
    Yeah, I found that part odd too. Also, you can found a GmbH and only pay in 50% of the €25k. My understanding is that you're still personally liable for the rest, but it lowers the hurdle to founding a GmbH at least somewhat.
  • nradov 4mo ago
    If a company collapses while having more liabilities than assets then that's fine. No one is being forced to extend any credit to them.
    • zymhan 4mo ago
      It will make it harder for "worthy" companies to get loans and credit.
      • woah 4mo ago
        Is that why it's so hard to get capital, credit, loans, and investment in the USA?
      • nradov 4mo ago
• sph 4mo ago
  Is it as tortuous to open a self-trader account with VAT ID, or is it just to found a company (the German equivalent of an ltd)?
• InsideOutSanta 4mo ago
  > Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. But it was his call. As the author has already pointed out, he could have started a sole proprietorship, but he did not want to take on that risk. The 25'000 is because it's not his risk if he starts a GmbH, it's the GmbH's risk. Also, the 25'000 are not a toll, it's the company's Stammkapital. The GmbH owns that money. And afaik, in Germany you only have to pay in half of the 25k.
  • preya2k 4mo ago
    Yes, can confirm. You can start a GmbH with exactly half of it (12.500€). And the money does NOT need to stay locked on the bank account. You can spend it for company purposes (but NOT for founder wages).
    • tomschwiha 4mo ago
      Founder wage is a company purpose, else it wouldn't be allowed. Its not your personal money anymore once deposited into the companies account.
      • InsideOutSanta 4mo ago
        Yes, afaik you can pay out founder wages with Stammkapital. However, it has to be actual wages, i.e., the founder has to do work in return for a salary, and the salary has to be reasonable. You can't just have the GmbH pay you back the money you put into the company. There are also other limitations (https://dejure.org/gesetze/GmbHG/30.html https://dejure.org/gesetze/GmbHG/30.html), but that's the main one.
        • tomschwiha 4mo ago
          The difference is shareholder (=Gesellschafter) and ceo (=Geschäftführer). They may be the same person. So paying wages for the work as Geschäftsführer is fine (reasonable amount, taxes, etc), paying out money for being a Gesellschafter is not.
• AmazingTurtle 4mo ago
  I founded a UG with 2 friends. 7.500 capital, 2.500 each. From that money, we paid the notary. We drafted with chatgpt on our own and presented it to an attorney for review, ~300€. Notary ~1.200€. All in all, we are 1.5 years in, we still have ~3.000 left from that 7.500 capital. Obviously you're doing something wrong
  • philipwhiuk 4mo ago
    He wanted a GmbH
    • AndroTux 4mo ago
      No, he wanted an UG & Co. KG
• mb_thd 4mo ago
  Man decides to go for the most complicated option, complains about how complicated it was. More news at 5.
• robtro 4mo ago
  Germany is one of the worst countries when it comes to bureaucracy nothing is fast here if you go the legal path and stay within the law (which is mostly for small people big players have different ways) and as you see everything costs a lot so if you are founding a pure online business do yourself a favor and incorporate somewhere else and if you still live in Germany look into licensing or subcontracting yourself to your company in another country it's way more flexible and you probably have Easier access to grants etc. Another part is taxation the tax office takes your money really fast but returns can be another slog where the tax office denies legal claims again and again untill you get a lawyer etc. and it generates costs again needlessly because it's really dependent on who works on your tax records and there mood apparently.
  • Lionga 4mo ago
    [dead]
  • earcar 4mo ago
    I have yet to find the mythical efficiency everyone was talking about. Trains, Berlin Brandenburg Airport, this. It's rules and adherence to rules, more than efficiency, that I've found in my experience.
    • odiroot 4mo ago
      There is no efficiency to be found. It's a "cover your ass" mentality that resists any changes.
    • ExpertAdvisor01 4mo ago
      Another recent example : https://www.telegraph.co.uk/world-news/2026/06/10/germanys-hs2-delayed-five-years-engineering-blunder/#comment https://www.telegraph.co.uk/world-news/2026/06/10/germanys-h... They laid 600+km of cables wrong ultimately delaying the project by 6 years.
    • Medowar 4mo ago
      The efficiency is a thing of the past, an mainly when dealing with manufacturing, which we were really good at. The world got faster, but german industries and politics never got the memo.
• trashcan2137 4mo ago
  Come to Poland. You can get this done in less than a week
  • deleted 4mo ago
    [deleted]
  • FinnKuhn 4mo ago
    OP mentioned in the post that they can't move outside of Germany as it would trigger the exit tax (which would probably cost them significantly more). This is going against multiple EU principles, but it was only introduced in 2022 and so far, there are no judgments on its enforceability as far as I'm aware.
• wongarsu 4mo ago
  Going from the scheduled notary appointment to having the first company registered comes out to 17 days in the timeline. 24 days if you add the time for getting the notary appointment. From experience, getting your tax id will take another four weeks or so, depending on your local tax authority. OP is still in that four week window, starting from the point where the paperwork was filed. So about 2 months total of processes you can't speed up. But notably in OP's case, most of the time is actually spent with the lawyer and tax advisor, no the bureaucracy itself. The more complicated company structure (Ug & Co KG is basically one company (an UG) owning another (a KG), giving a very similar structure to an UG at a slight tax advantage), doesn't help, but it's really not where the majority of the time here is lost (it probably does account for about half of the money though)
• fredsters_s 4mo ago
  it is very funny that most of the (presumably germans) in the comments are saying "it's not that bad and it's fine because you chose a complicated LLC structure"
  • mqus 4mo ago
    It's probably only funny because the commenting germans are aware that there is a much simpler "UG" (without the &co KG), which is pretty much a LLC, which you can open on your own, a bit faster, much cheaper. But apparently OP didn't do that for tax reasons (in a normal UG, if you want to pay yourself, you gotta pay income tax and all the other stuff) If an american comes and says they founded a public company (with stocks and all), and complained about the fuzz involved, you would also tell them that it's their own fault, right? That said, maybe the US/Delaware LLC has this component as well, I'm not a lawyer :D
    • littlecranky67 4mo ago
      UG is almost always a bad idea. Just go with the GmbH from the start. UGs need to convert to GmbHs over time anyway, it is just added bureaucracy. Your tax accountant alone will cost 3.500-5.000€ in the first year, so you need the money anyway. Starting a UG with 2.000€ in capital is stupid idea, you risk going bankrupt early on. Rembmer, delayed filing for insolvency (Insolvenzverschleppung) is a criminal ofense in Germany and you are risking that to.
  • Ekaros 4mo ago
    My understanding what is described is Limited Liability corporation hold inside Limited partnership. Not either of those alone. This setup allows some tax games. But also clearly is also much more complicated to setup as first you would need the limited partnership...
  • florakel 4mo ago
    Looks like he got hot milked by “advisors” who insisted in an overly complicated setup. Setting up a UG is fast and easy as long as you stick to the standard and you don’t need advisors or lawyers.
• Lionga 4mo ago
  [dead]
• maxcb 4mo ago
  [dead]
• HackerThemAll 4mo ago
  Yeah, for many clerks the purpose of their lives is only to improve and enhance bureaucracy, and make the applicant's life miserable.
• nish1500 4mo ago
  I've run a tech business on three continents, and nothing comes close to the Kafkaesque labyrinth of the German world. Everything is unbelievably complicated and over-engineered, and every layer is immune to change. Every rule was rational when it was added, and now everyone has a financial stake in continued complexity. The German notary is the highest-paid notary in the world, and the highest-earning professional in the country. That said, I think a lot of the frustration comes from a mismatch of expectations. Germany wasn't designed for randos to start companies and thrust change on society. All the bureaucracy is a filter, and what it filters out is change itself. You were never supposed to incorporate a company. You were supposed to get a job at Volkswagen.
  • selfmodruntime 4mo ago
    German notaries, unlike anywhere in the world, get a percantage of a done deal. That is just insane.
    • markvdb 4mo ago
      Same here.
    • SapporoChris 4mo ago
      Why is this insane? "The notary serves as a neutral party ensuring both buyer and seller understand their obligations. In 2026, combined notary and land registry fees typically range from 1.5% to 2% of the property price." This is actually lower than the real estate agent percentage in USA which can be 5 to 6% split between two agents. Also, the GP "The German notary is the highest-paid notary in the world, and the highest-earning professional in the country." I thought for sure pilots, aviation specialists, medical fields would earn more. I'm dubious of the claims that a notary is the highest earning profession. Perhaps some cherry picking is being done.
      • ondra 4mo ago
        I do not know about this being the case in Germany only; I am in a nearby country and the system is very similar. I also do think it is insane, as the fee is on top of the real estate agent fees, it is specified by the law and unavoidable, and I get a service I do not really need or want and it costs a lot of money.
• piterrro 4mo ago
  I've setup my own company in Poland in 2015, by submitting a web form, 30 minutes later I could issue a fully VAT compliant invoice. This was not an incorporation however - that was a sole proprietorship, but I could still hire people full time, issue invoices etc.
  • florakel 4mo ago
    You can do the same in Germany. Costs 29 Euros with an online form. Once the sole proprietorship is setup you apply for your tax id and done. The whole process took 2 weeks in my city. Legally you can even start invoicing as soon as you registered your business. The problem with OP is that he chose an overly complicated structure. Probably got milked by lawyers and advisors.
    • piterrro 4mo ago
      thanks good to know! I felt something was off here
• bcjdjsndon 4mo ago
  You're discovering the global financial system is primarily for the rich, and not wage slaves like us. Free to those who can afford it
  • stivatron 4mo ago
    Its always the caste lobbying for regulations "for the good of all" that break countries apart. My country's (Argentina) largest political party lives on by heavy corporativism, otherwise they would have been booted a long time ago.
• zero_k 4mo ago
  My friend bought an apartment. In February. Still in processing at the Amt (bureau). It's nightmare fuel. They are sending physical letters, and are hand-matching payments from banks. Apparently, they couldn't match a 53 EUR transfer last week, so a ~400k EUR payment is stalling. The issue is, the people holding the stamps (and believe me, they ARE stamps, with ink and all) are in charge, and are VERY reluctant to give up that comfy job. Zero accountability, too, since once you are a government employee, it's incredibly hard to get fired. So they stall the process, forever, without any reprecussions. I am all for having and caring about process and dealing with everyone equally. That's why I live in Germany and not in Eastern Europe where often some money under the table is the only oil in the machine. No such oil in the German machine, thankfully. But it's infuriatingly slow, because bureaucrats are in control and will never willing give up that control.
  • markvdb 4mo ago
    3 to 4 months is standard procedure in Belgium.
    • dcrazy 4mo ago
      This is shocking to me. 30 days from offer to close is on the long end of normal for residential real estate transactions in the U.S.
• seydor 4mo ago
  You're lucky. After that you will have to run it!
• gwd 4mo ago
  Important note: The cost / delay he's talking about isn't registering a company; it's getting a VAT number. I've done both in the UK, and while getting a VAT number is significantly cheaper than 9k EUR and significantly faster than 6 months, it's not nearly as quick or cheap as simply registering the company, which is what many commenters (and even the author in TFA) are comparing it to.
• niemandhier 4mo ago
  You can just buy a ready made GmbH. This costs about 28k€, 25k€ are deposited in the company. That is called Vorratsgmbh and takes very little time.
  • ExpertAdvisor01 4mo ago
    You still have to go to a notary and do paperwork to change the name of the company.
    • niemandhier 4mo ago
      Does that really matter? Your name can be whatever until you really take off. Point is: You can easily have a company in Germany in 24 h. An UG is affordable at about 4K and has limited liability. GmbH is a bit more fancye and hence more expensive. Maybe file a trade mark for that name but I see no reason to actually change the name.
• weinzierl 4mo ago
  Not to defend German bureaucracy but if you are serious and want results this is not how you do it. If you want a GmbH quickly there are specialized lawyers that maintain a pool of freshly founded GmbH's for you to buy. Everything is set up for you to start. If you don't like certain things like the company name, you can always change it later. That being said, I know plenty of people who founded their GmbH themselves and it went smoothly. It's not that it can't be done, it's more that OP chose an overly complicated and untypical scheme and was surprised about the complications.
  • flopbob 4mo ago
    Especially the combination of UG & Co KG. Never heard that one!
    • weinzierl 4mo ago
      Yes, my suspicion is that OP went to a lawyer and said: "I want to minimize my risk as much as possible, what do I do?" And of course, lawyers being lawyers, answered you need to wear both a belt and suspenders. This is the answer you'd expect from a lawyer. It is your responsibility as a founder to do the risk assessment. The fact that almost no one wears both a belt and suspenders might have been a hint.
      • jeroenhd 4mo ago
        > went to a lawyer They studied AI and are building an AI company. I doubt the idea for the business structure come from a lawyer, to be honest. Especially such an overcomplicated setup with so many real-world issues that they're running into right now.
        • deleted 4mo ago
          [deleted]
  • nish1500 4mo ago
    I incorporated a GmbH with Musterprotokolle and it still look me longer than OP.
• flopbob 4mo ago
  The last paragraph is very important to the story. His setup is essentially a shell company which add complexity. Setting up a UG is very easy, needs little capital and is especially created for one-person-companies. Additionally he is able to send invoices, just not internationally. I have a feeling setting up this corporate structure and registering it internationally would also not be done instantly in other countries.
• florakel 4mo ago
  I don’t know the specifics but the OP chose a complicated setup. Why not just use a GmbH which is the equivalent to an Inc in the US? The capital requirement is 12500 in the bank not 25000 as stated. There are online services that run the whole process for you similar to Stripe Atlas. Even setting up a UG (with 1 euro stating capital) is very easy but you have to upgrade to a GmbH once you receive investment (investors usually demand it). For the whole process there are standard forms. You only need to pay lawyers if you want to personalize your setup. Maybe OP was just not advised well which is surprising given the amount of information available online (startup guides for Germany)
  • zipy124 4mo ago
    They state that in the post, it is a tax-optimisation since it is a single-person company.
    • florakel 4mo ago
      Maybe not a relevant experience then, as most people in this forum look for startup advice and take on external investment. You can totally setup a Inc or LLC equivalent pretty fast in Germany as long as you stick to the standard. What he is setting up is basically an LLC owning an Inc.
  • AndroTux 4mo ago
    I guess that’s what happens when you get advised by a lawyer.
  • littlecranky67 4mo ago
    This. Is founded (and liquidated) my GmbH with only 12.500€ deposited to the business bank account. Note this is not a cost, it just moves to the corporate account and can be used to pay expenses (notary, lawyers, hardware etc.). The remaining 12.500 are a permanent loan that the proprietory needs to cover on in case there is a liquidity shortage or liability suit etc. In my case I never paid the remaining 12.500€, and in liquidation process it balances out to zero. But if you think founding a german company is difficult, wait until have you do an ordered liquidation (not bankruptcy) - that is madness on its own.
• rmoriz 4mo ago
  The biggest issue is to find a tax consultant for your GmbH/UG, especially when you have low revenue (below 1M).
• lucamark 4mo ago
  Europe will suffocate under the weight of its own bureaucracy. The sad thing is that it is not new to me, I've heard so many stories like this one. This is the kind of friction that makes founders incorporate elsewhere. Also, a founder spending months coordinating lawyers banks and tax advisors is not talking to customers or building the product. The opportunity cost here is huge. Anyway, you are pretty close. One more push, don’t give up. :)
  • tikotus 4mo ago
    Germany is not EU though. Very different bureaucracy in different EU countries. Up to a point, EU doesn't add a single bit of bureaucracy to the stack. Only once you reach a certain limit you will have to enroll in an international VAT system, which is not too bad. EDIT: Just re-read your message. I thought it said EU. But the point stands, Germany is not Europe either.
    • lucamark 4mo ago
      In many other european countries, the story doesn't change much - with some exceptions. The irony is that the EU is now discussing EU Inc. a law to let startups incorporate online within 48 hours, for at most €100, under a single optional corporate framework across Europe. That is exactly the right direction. But for now it is just a proposal
  • gregorygoc 4mo ago
    Ah yes, Germany == Europe.
    • lucamark 4mo ago
      Do you think that stuffs are different in Italy, Spain or France? Just to cite some others
      • gregorygoc 4mo ago
        Yes, it is different in Netherlands, Sweden, Poland.
• Fokamul 4mo ago
  So question is, why are you starting company in Germany, this is EU, start in better country.
  • markvdb 4mo ago
    He mentioned German exit tax is keeping him from doing that.
  • Chu4eeno 4mo ago
    Because then the german tax man would presumably demand he pay more than he has available, in exit tax (as explained in the post). To cite the modern thinkers in Corporate Avenger, «taxes are stealing and I get the feeling that were getting fucked in the ass».
  • throwaway25910 4mo ago
    EU is not the US. I started a company in Czechia and while setting the company up was not a problem, setting up a bank account was. Every bank has declined me, I started with the easiest ones.
• randomstate 4mo ago
  I gave up on trying to set up an company in Germany. Founding is the 1st side of the coin, but the other side of the coin are the complexities of closing your company (which takes at least a year as well) and exit tax (you might get taxed 6-7 figures when moving abroad even if you don't really make reasonable money).
• stymaar 4mo ago
  Do you really need for the legal process to be completed before invoicing? In France you can do it as soon as you started the process.
  • CodesInChaos 4mo ago
    At least for reverse charge you'll need a VAT ID.
• wayneshng 4mo ago
  I founded my Estonian company within 3 days, that includes when the court rejected the name because a similar name already existed. Everything was online.
  • markvdb 4mo ago
    The real problem becomes substance in Estonia? Residence, local director, office, ...
    • KomoD 4mo ago
      You only need a contact person and a legal address, which is only €100-200/yr. You don't need a local director, physical office or similar, and you don't need to live there.
      • markvdb 4mo ago
        OECD CFC rules have become much stricter in this regard...
• RicoElectrico 4mo ago
  I wonder what's the reason. Poland used to have horrible bureaucracy. You could argue this was due to lack of funds, or communist baggage. Yet, over the last decade digital administration has become a norm, rather than exception. Germany doesn't have such excuses, yet there it is.
• rob74 4mo ago
  > Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it. The 25,000 is there to make sure you can cover some liability. If you really wanted "your company and your risk", you could have used the "simplest setup", where you are liable with your own money, but if you think about it that way, it doesn't sound so appealing, does it? So of course the UG which does not (yet) have 25,000 in the bank sounds less serious than the GmbH that has 25,000 in the bank. A company that starts with nothing wouldn't be a GmbH (limited liability company), it would be a GoH (company without liability), and there's a good reason why those don't exist...
  • arethuza 4mo ago
    When I co-founded a company in the UK in 1995 there were two £1 shares - one for each founder. Mind you it was an off the shelf company - but the process couldn't really be much simpler back then - and its probably a lot simpler now.
    • notpushkin 4mo ago
      You can open an Estonian company with 0.01 € capital. It will look ridiculous in the registry, and you will still be liable for the remaining 2499.99 € personally anyway, but it is possible. I’ve seen a couple 100 € companies, which is more reasonable I guess. You can also declare that you’ve paid the capital in, without any proof required for small amounts (up to 50k € IIRC). If you lie about it, I suppose you’ll be personally liable for everything, so definitely not worth risking it. Just put in like 500 €, set it aside on the business account, and don’t touch it. (IANAL)
      • arethuza 4mo ago
        That sounds a bit like the UK concept of a Company Limited by Guarantee - which is used by a lot of charities. Edit: I'm not a lawyer either!
• amadeuspagel 4mo ago
  > My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving. Without this "exit tax", every founder of a successful business would have a huge incentive to leave and to realize the gains elsewhere. It's not a tax for the privilige of leaving, but for the privilege of building a company. I can see only three alternatives to this: - Abolish the capital gains tax entirely. - Make defering it impossible. Force people to pay immidiately. No "exit tax", but people have to pay for unrealized gains. - Tax people when they realize their gains in a foreign country.
  • earcar 4mo ago
    It should be possible to move within Europe, then when the liquidity event happens tax me from the countries where I've lived, proportionally to the time I've lived there. If you want to move out of Europe, you get the exit tax as before.
  • matwood 4mo ago
    A fourth alternative is to leave, and a fifth is to not start a company at all. Now you understand why the USA deploys 3-4x the amount of VC capital compared to the EU. And prior to the current administration, entrepreneurs mostly wanted to get to the US.
    • amadeuspagel 4mo ago
      As far as I understand, the US taxes its citizens whereever they live (the third alternative I mentioned).
      • Chu4eeno 4mo ago
        There's various exclusions and credits to avoid double taxation.
    • weird-eye-issue 4mo ago
      Are you aware that the US charges an exit tax if you choose to renounce your citizenship? And if you do not renounce it, they will tax you no matter where you live in the world?
• noosphr 4mo ago
  When these threads show up it is always funny that Germans are shocked anyone expects anything else and everyone is shocked at Germany. Luckily with how the current German economy is doing this is a problem that will solve itself. It's like the last half a dozen German governments look at the Morgenthau Plan plan and thought it was an amazing idea they must implement.
  • pell 4mo ago
    I really didn’t have the feeling that Germans are shocked about some of these inefficiencies at all. Typically they’re just a result of long processes thus difficult to change. I do agree that Germany and the EU as a whole should not make this process so cumbersome. It shouldn’t be easier to found a US foreign LLC from abroad than a company in one’s country or residence. The proposed EU LLC might solve some of those issues if it comes to fruition. Regarding the economy though, Germany is still the third richest country on earth. I think this talking point about their huge regression is mostly FUD.
• farbklang 4mo ago
  "To some clients, 'UG' reads as 'not serious.'" -> more of a sales isssue Consulting or dev work doesn't need deep capital. we're insured for X if Y happens. A UG is fine. The "not serious" label only sticks because founders keep caving to it. Let the client adapt to your setup, not the reverse. If their compliance department doesn't get it, that's a gap to close, evry time you stand your ground, you normalize the UG for the next founder.
• fakedang 4mo ago
  Honestly why go through all these hoops? Is the Wyoming LLC + Wise account route shut off for most Europeans?
  • markvdb 4mo ago
    Yes. Can't just emigrate. No substance in the US meaning your llc would be liable for tax as if it were an llc in the country where you reside. You'd basicly double the liabilities and administration for no good reason.
    • fakedang 4mo ago
      I wasn't talking about emigrating - just work from Europe and manage the company in the US. You only have to pay German taxes (corporate + personal) in that arrangement, and submit 2 forms to the IRS as a foreign-owned passthrough LLC.
  • quentindanjou 4mo ago
    Yes. Unless you have hundreds of thousands of dollars that you can invest in the company that has not even been created, you would not be able to get a visa and your company would not be able to exist. Unless you are a startup with large investors, that route is closed.
    • fakedang 4mo ago
      Who said anything about getting a visa? The entire point of my idea was about skipping German bureaucracy. The only US bureaucracy is the IRS, and 2 forms for offshore LLCs at that. Getting a visa actually defeats the purpose of the Wyoming LLC, since you'd have to pay federal taxes as a US resident. But with the Wyoming LLC being pass-through with the added benefit of zero liability (same arrangement as OP), you'd only have to pay corporate taxes and then German personal income taxes as a German resident. You don't need to step foot in the US at all. You can't get a visa to run your own company under normal circumstances anyways, the only routes being O1, EB5 or EB1.
• epolanski 4mo ago
  There's so many things that are plain wrong in the European ancient and bureaucratic commercial and corporate law. It's insane that giving stock options (core to attract talent) or raising capital for equity is so difficult across Europe. And don't get me started on how difficult it is to fire people that just don't work and only pretend to, spreading doing jackshit across the company. Europe has the talent and even the capital, but the incentives are just not here, neither to attract talent nor serious investments. The continent is old and politicians keep trying to band aid the system, consistently claim regional-national policies over common European rules, they will claim Europe makes it difficult to do business, just to reinvent their own commercial, import/export rules, tax rules non stop. I don't want to say it's a disaster, but we really need some party that looks at commercial, trade and corporate law across Europe.
• sreekanth850 4mo ago
  Created an LLP, We spend around 30k INR, that is roughly 300USD.
• stubbi 4mo ago
  Yeah very relatable unfortunately!
• Archelaos 4mo ago
  The authors claim that he spent "9,600 euros to start a company" is misleading. Since he wants to reduce his liabiliy and therefore the risk of his customers as much as possible, he opted for a complex solution that involved founding two joined companies. In addition, he counted 2,000 € of shared capital as an expense, which it isn't. He did not opt for a "cheap" UG which requires no up-front capital, because of its bad reputation. He also includes a bill for accounting software of 426.97 € into his calculation. This has nothing to do with founding costs, but are operational expenses. As the author states that he set up the company through a law firm, I wonder which of the figures includes the cost of this service. To be fair, this should be listed separately, as such costs can vary widely or be omitted entirely if the company is incorporated solely through a notary. Also the information about the minimum deposit when founding a GmbH is incomplete. He states: "A GmbH wants 25,000 euros sitting in a bank account before it is allowed to exist." Fact is that you need only deposit half of it upfront into the GmbH; you only have to deposit the rest of the money if the company is in trouble. The company can also immediately lend the deposit back to the founder at market rates. If the company’s articles of association permit it to hold shares in other companies, the company may also use the contributions to purchase shares or similar financial investments. His law firm should actually have advised him on this matter. The main differences between a standard GmbH and a GmbH & Co KG lie in their somewhat different tax arrangements. So all in all, the author paid 7,227.74 € to found a rather complex company structure. Judging by his reasoning, presumably for the wrong reasons. When I found a GmbH in 2019 without the help of a law firm, it cost me about 2,000 euros (if I recall it correctly).
  • quadrifoliate 4mo ago
    Do you understand why the notary fees are €1,575.24? That's astonishingly high for (I presume) a couple hours of work at most.
    • dgellow 4mo ago
      The notary system is pure scam and should be abolished. They literally just read your documents, stamp, sign. It’s expansive, outdated and doesn’t bring any value
• phlo 4mo ago
  You have to savour the lack of self-awareness in this one. > Founder chooses the most complex legal structure that's readily-available... and is surprised that this complexity comes with laywer and notary fees. > Founder decides to incorporate a company with the name of a popular brand of kitchen rolls... and is surprised that it's too generic. > After "weeks of correspondence" (and, I suppose, extensive research), founder decides to incorporate a company that's named the same as a Swedish online marketing company instead. Very distinctive. No risk of confusion, ever.
  • fakedang 4mo ago
    Is the GmbH the most complex legal structure? What about the AG?
    • dgellow 4mo ago
      No it’s not the most complicated form. They didn’t go for a standard GmbH. A simple GmbH using a template protocol is simpler and cheaper
    • phlo 4mo ago
      The author went with an UG nested in a KG as the legal structure. That's two legal entities. It's a neat workaround to avoid corporate taxes (the KG acts as a pass-through vehicle, for taxes and for liability), and avoid personal liability (which passes through the KG but stops at the UG). In comparison, AG and GmbH also shield their owners from liability, but require capital deposits and are subject to corporate taxes. Going with a UG-in-a-KG is an exercise in eating your cake and having it too. It's a cool legal structure that works around some of the limitations of its building blocks. It shouldn't come as a surprise that the people who can build the neat hack for you are going to want to get paid in order to do that.
      • woodpanel 4mo ago
        It’s a typical holding structure. Mostly chosen in Germany to get tax-efficiency that’s on par internationally, ie for finding and selling shares to investors. > It's a cool legal structure No it’s not cool at all that you have to double down on the Byzantine-ness to get a reasonable amount of taxation, „investsbility“ and limited liability. Especially for digital products. > eating your cake and having it too This is so typical of our country, the passive aggressive condemnation of founders as greedy, and selfish to even desire fewer taxes and limited liability. Well if in a couple of years all the German Blue Chips will celebrate their bicentennials, while all the moonshots are LLM-oneshotted outside of Germany, not even talking about „normal“ incorporations: who is going to finance our vast welfare state? Speaking about > eating your cake and having it too
• jmonger 4mo ago
  Wait until you find out about electronic invoicing mandates rolling across Europe.
  • markvdb 4mo ago
    Belgium mandates peppol for b2b transactions since January 1st. This at least carries the potential of simplifying things for honest businesses.
• sounddetective 4mo ago
  Start a limited liability company in Latvia or Estonia. It will take you 1 business day, you can do it remotely, and, because of EU laws, you can do business everywhere in EU. Basically nothing you can do with Gmbh that you cannot do with Latvian or Estonian equivalent https://www.vid.gov.lv/en/first-steps-entrepreneurs https://www.vid.gov.lv/en/first-steps-entrepreneurs
  • distances 4mo ago
    The tax office can decide that the company is, in fact, a German company if the founder lives and operates in Germany. Now the company paperwork has to be done in two countries. I don't know what the tax implications are. Applies to all EU countries btw, you can't just choose a different jurisdiction for your new company risk-free.
    • littlecranky67 4mo ago
      The tax office WILL 100% decide you have to pay corporate taxes in Germany - and it does not need to decide that in the first place, you will have to report it proactively on your own to the tax office and file for taxes.
• botulidze 4mo ago
  I recently helped my friend (3rd country national) to open a new business in Czech Republic. It took 3 months from registration to sending her first invoice. The longest wait was on the bank account: a very few places are willing to open company account if you don't have an EU residency. Without the bank account, she couldn't deposit founding capital (základní kapitál) which is required to complete the registration. It's even funnier cause the minimum amount to deposit is 1 CZK (5 cents). Total cost to start business was under $8,000. The most expensive were legal services: writing down all contracts and customer agreements was around ~$5,000. I feel like this is such an untapped market for getting digitilized. I was thinking to actually sit and vibe code it at some point but can't imagine doing this alone.
• woffelski 4mo ago
  Skill issue? I seriously don't know what you people are doing. I've set up companies in Germany, the US, Brazil and Mexico. The US was BY FAR, the most enjoyable experience. Won't say anything else. It was a breeze! But Germany wasn't as bad as people make it sometimes. Just don't go with a super complicated, overengineered setup and you are up and running almost instantly. Better won't mention Brazil, though. If you have the resources, get some QUALIFIED lawyer/notary on board and it'll all be super chill and quick. And if you're just getting started, just do a sole proprietorship as you get started (and you can start working pretty much on the same day), and have the GmbH setup process run on the side. Running the business is the hard part!
• pshirshov 4mo ago
  Well, create a company in Ireland. 5 days, €300 and you can send your invoices.
  • markvdb 4mo ago
    ...and move to Ireland.
    • pshirshov 3mo ago
      Not necessarily. You need a local director and to be physically present in the country like once per year for board meetings.
• anon291 4mo ago
  I just started an LLC in Oregon and I did it in the evening and got a confirmation by the next morning and an ein next afternoon
• Ajoha 4mo ago
  Mh, seems to me about ranting as some things went wrong. With all due respect, founding a company shouldn’t be that easy; otherwise investors wouldn’t give you money for it. “UG” reads as “not serious” – no, that was in the past. Times have changed. I’m not here to defend a big country that clearly has to do better, of course.
  • mizaru 4mo ago
    To me the most annoying thing about the UG is that your company name needs to include "UG (haftungsbeschränkt)", no abbreviations allowed. So unaesthetic...
• account42 4mo ago
  > “No,” said the lawyer. German company names have to be distinctive, and “Plenty” is a plain English word. Berlin would reject it. Good.
  • Aachen 4mo ago
    Say that to Tempo! It's like hoover or ipad, a word people use in place of the real product name, and no matter which brand the product is actually made by (a no-brand piece of paper is still referred to as Tempo) It they're allowed to trade as Tempo in Germany, why isn't a company allowed to be called Plenty? I agree it would be nicer if you couldn't hijack a normal word in the hopes it does well enough that people know of it and are constantly reminded of the brand, or that related searches have to consider putting this among the results, but in terms of a level playing field idk
    • WA 4mo ago
      Company names != brand names. Brand names != registered trademarks. They could probably call it "Plenty Apps GmbH" and that would be fine.
      • Aachen 3mo ago
        If the company name didn't matter and has rules that may not fit your product strategy, why don't people use a password generator for the name and then trade products as whatever brand they like?
• Schlagbohrer 4mo ago
  Fascinating, and useful for those of us considering starting up in DE.
  • shmeeed 4mo ago
    Much more useful tips on how to start up properly can be found in the comments. OP seems to have been pretty ill-advised.
• yieldcrv 4mo ago
  The EU is a single market, just form an entity in the quickest and easiest state to form it, open a bank account, payment processor and you’re off to the races, as long as you can accept Euros directly people are fine? Who are these people that care “Oh you don’t have a GmBH, oh your share capital is so low ohhh ho ho ho ho”
• mplappert 4mo ago
  There’s a lot of confusion here: - There is no double taxation if you just pay yourself a salary (since it’s a normal business expense). If you want to take money out of the company flexibly, a GmbH is the wrong structure. - I’ve never heard of anybody doing an UG/GmbH + KG to get started. This is highly unusual. Most people either do just a simple UG or maybe they set up a holding structure with two separate GmbH / UG entities. - Related to the above: if you go with a simple, standard structure you will incur minimal legal fees. You don’t need a lawyer, you just directly task a notary and tell them you want a standard setup. - If you don’t want the complexity of a limited liability company, the standard way to reduce liability risk is to get liability insurance. Many, many people do this instead of having a GmbH. The valid criticism is the a) lack of digital processes and b) sequential processing of steps that could happen in parallel. For example, I sped up my own GmbH process by driving to the register court and paying in cash on-site. For whatever reason that’s much faster and saves about a week.
  • davedx 4mo ago
    > The standard way to reduce liability risk is to get liability insurance Exactly! That's what I do in the Netherlands. It's also common to cover this contractually too - you can negotiate where liability falls for many cases. Getting a limited liability company for a one-person operation is just overkill.
    • t0mas88 4mo ago
      The Netherlands changed the rules 14 years ago to allow a BV (equivalent to a German GmbH or US LLC) with zero starting capital. If suppliers want to check company capital, the data is public with the companies register (KvK for locals). There are two reasons not to go this way in NL, 1. There are tax discounts for small businesses that only apply to a sole proprietorship kind of structure and 2. Administrative costs for a BV are slightly higher because the legal entity itself needs to file taxes, instead of only the owners having to do so. But the difference is now very small, #1 has been reduced the past few years and #2 is quite simple. It's an online portal to submit the numbers, if you know what you're doing you don't need an accountant. And I think this is the key criticism for the German system. They don't seem to have a simple online portal for this and they still require 25k starting capital. That makes it harder for a small business to get started.
• robert_foss 4mo ago
  Can confirm, starting and running a business in Germany is miserable. The processes are all non-digital, and have many steps like Notaries for example.
• milleramp 4mo ago
  I have heard it is also more difficult to get married in Germany.
• lnz_me 4mo ago
  I grew up in Germany and Austria and did my first startups there, then went to New Zealand and built startups there and currently live in Portugal and built startups there. Europe is broken beyond believe. I moved everything back to New Zealand because the bureaucracy, the level of compliance, the insane inefficient here is killing me. if the EU is serious about wanting to build a meaningful startup scene then it has to listen to EUinc, drop its completely unfounded arrogance and learn from others. So looking forward to leaving again. I highly recommend founders in the EU to found in a sane county, if inside EU is a hard requirement, look at Estonia and Lithuania, skip the rest.
• PaulHoule 4mo ago
  Outside of some kleptocracies, Germany has long had a reputation as the hardest place to found a firm.
• romanovcode 4mo ago
  I was waiting for 3 months for my VAT ID to arrive. Then I just called my finanzamt and told them why I have no vat ID. I think they just forgot, finanzamt said over the phone that "they opened a ticket" and 2 weeks later exactly as promised in the beginning it was in my post.
• hypnodrones 4mo ago
  German system supports wealthy individuals who are planning to stay in Germany long-term, but is horrendous for anyone without cash in the bank willing just to try something out.
• jarek83 4mo ago
  As others commented already - the author does not seem to understand principal idea behind running a business - a company is not something "yours", because you can just simply sell your shares or be moved out from the company by other partners. Company is a state's legal entity given to designated people to manage (the forming person/partners) and profit from doing it successfully. If those people fail they have to follow strict rules (liquidation) or they will be sued personally for misconduct. That entity gives much more possibilities because it is limited liability - part of which is held by the state, and part by the running founders. If you want something yours, you go with the sole proprietorship.
• whereistejas 4mo ago
  it seems absurd that they would reject a plain and simple name? i imagined company names would be available on first come, first serve basis. why is that not the case?
• stackedinserter 4mo ago
  The saddest thing is that bureaucracy will stay, grow and flourish until the point of breakdown, when the system is not able to pay bureaucrats their salaries. Or maybe even until they can't physically get to work (read with accent: "that I need to do even if I don't get paid")
  • CodesInChaos 4mo ago
    At least on this specific issue, the EU is trying to simplify things by introducing "EU Inc" as a new corporate form. But it'll take several years more to arrive.
• ur-whale 4mo ago
  "Standard" German people have an deeply ingrained, culturally inflicted belief that administration is inherently a good thing, and that the more of it there is of it, the better the system functions. Worse, when you try to gently and constructively engage them on the topic, their mind is so deeply dyed with the idea, that they either simply don't understand what you're talking about or when they do, refuse to engage because they find you so weird, it's a waste of time to discuss with you. "Was nicht dokumentiert ist, ist nicht passiert". Yeah, right, except that "Alles erstickt im Papierkram" and nothing ever fucking happens.
• ejoebstl 4mo ago
  I ran multiple businesses in Germany and it's possible to set up an UG way cheaper and way faster via Musterprotokoll. You can do the majority of filings yourself. There's tutorials (fuer-gruender.de is great). If you get a lawyer and tax advisor for every step, it's also expensive on other countries. And doing company accounts is also work elsewhere. Not saying that it couldn't be way better in Germany, but this blog post is more a rant than anything else.
• martinbfine 4mo ago
  [dead]
• thedrbrian 4mo ago
  > And no, I could not just leave instead. My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax Something is wrong here if you will be liable for at least a hundred grand of exit but balk over 25k to start a new company.
  • dcrazy 4mo ago
    It’s not like the first company is just a pile of cash. He would have to sell his shares to free up liquidity.
• abdelkrimb 4mo ago
  [dead]
• chinathrow 4mo ago
  [ outside of Germany ]
• lloydatkinson 4mo ago
  It all makes sense when you understand that this is deliberate, to crush the economy and innovation.
• figassis 4mo ago
  My country, Angola, implemented online incorporation recently. They're very proud of it, but oh boy, do they need to burn it and salt the earth it stands on. It's harder and takes longer to incorporate online than brave the long lines at the government agency. I can incorporate IRL in 1 day. It took 2.5 months to do it online. Ultimately I gave up and told them to cancel the whole thing. And then it got incorporated the next business day. Maybe I'll also post about that experience.
• Bluebirt 4mo ago
  This guy gets it completely wrong. You are allowed to use the 25k, but only for business expense. Not as salary to yourself.
  • dcrazy 4mo ago
    This rule seems to assume all business ventures are capital intensive.
• heyaco 4mo ago
  god bless america. cost me like $90 for a llc. all online. this sounds like a total nightmare. those germans need to wise up
• DaedalusII 4mo ago
  now try closing your company for less than several thousand. lol. you should consider UK company, enormously better. or sweden. continental EU is mostly backwards.
• scotty79 4mo ago
  Germany is slow. The simplest possible purchase of an appartment, without any hurdles took me almost half a year.
• scotty79 4mo ago
  European 28th regime can't come quick enough.
• wg0 4mo ago
  Try firma.de
  • FinnKuhn 4mo ago
    They don't offer GmbH & Co. KG as an option.
• deleted 4mo ago
  [deleted]
• rihards__ 4mo ago
  "My German clients I could bill today. But a domestic invoice now would have to be reissued the moment the VAT ID arrives" Not a good idea... Companies will have to re-enter their VAT reports in previous taxation periods. It will trigger even more hassle an pushback form payers... While EU is big and welcoming family, nobody wants to deal with non-resident bank accounts and tax liabilities :)
• jeffreyrogers 4mo ago
  The €25k working capital requirement seems a little prescriptive to me (in the US there is nothing like that for non-finance industries, although some businesses need bonds which pay clients/customers if you fail to perform), but it's also the case that most businesses are going to need more than 25k in working capital once they're beyond the startup phase, and outside of tech you typically have working capital requirements that grow with increasing revenue, meaning your accounting profits can be growing but you can still run out of cash since you spend it before you can collect it.
  • notanormalnerd 4mo ago
    > The €25k working capital requirement seems a little prescriptive to me It also hasn't been raised since 1981 when it was set at 50.000 DM. Which would provide a real trust to customers and suppliers working with a GmbH. This would mean 65.000€ accounting for inflation. And trust is key in having a smooth running economy.
• rcdwealth 4mo ago
  [dead]
• thomas_witt 4mo ago
  As much as I would like to agree with you about how non-digitized and rotten and crooked the whole notary etc system is - as someone who has incorporated and invested in dozens of German companies (UGs, GmbHs, and GmbH & Co. KGs), I’d seriously reconsider the UG & Co. KG structure for a one-person software business. The tax explanation in the post is oversimplified. Examples: With a KG, if the business earns €100k, that profit is attributed directly to you and taxed as personal income, whether you distribute it or not. At higher income levels, that’s roughly 45% including solidarity surcharge (and potentially church tax). With a UG or GmbH, the company pays Körperschaftssteuer plus Gewerbesteuer, typically around 30% combined (depending on where its incorporated). On €100k profit, about €70k remains inside the company. If you later distribute it, you’ll pay capital gains tax based on the Halbeinkünfteverfahren on the distribution - which is 25% + Soli, bringing the total tax burden to roughly the same level as the KG. The key difference is that with a UG/GmbH you can leave profits inside the company. That money can be reinvested into the business, other startups, ETFs, stocks, etc. - most often with only 1,5% effective tax while the money is working for you. You defer the second layer of taxation until you actually take the money out. Also, you can pay yourself a salary. Whatever portion you pay out as salary is taxed personally just as it would be in the KG structure - but this time its company expenses, so no double taxation here either. A few other points: * A GmbH no longer requires €25k - its only 12,5k€ - and its also not to be locked away forever. The money can be used for legitimate business expenses immediately after incorporation. * A decent tax advisor can usually get a VAT ID much faster than described in the article. * A UG is widely accepted in the startup ecosystem. I’ve never seen customers reject an otherwise attractive startup because it started life as a UG. For investors, it's routine. * Converting a UG into a GmbH later is routine, if you want to start small. If you have the 12,5k€ money, do a GmbH to save administrative hassle. * A UG & Co. KG creates significantly more administration: two entities, two annual accounts, additional bookkeeping, additional filings, and additional advisor costs. Of course there are valid reasons to use a GmbH & Co. KG, especially for complicated co-investment arrangements, but from what you wrote, that's not the case here. Therefore, for a solo software founder, I’d question whether the additional complexity buys you anything meaningful. Bonus tip: You MIGHT want to consider owning your share in the Software UG not directly but through another UG, paolino UG or so. When you foresee to sell your business for significant money later, then you'll have exactly the same advantage, the money can stay in the company for reinvestment and you don't have to give up 50% of your capital gains in the moment you sign the sellers agreement. You CAN't do this easily later. Not legal or tax advice. Just my personal experience.
• rcdwealth 4mo ago
  [dead]
• DeathArrow 4mo ago
  Just a little taste of the European bureaucracy. The whole reality is much worse.
• sliqqq 4mo ago
  German here. And this is just the standardized SETUP! Wait until you have an edge case or a complicated tax situation, or - dare you - you want to work from a different country. Germany feels like the government tries to make everything as hard and complicated as possible, to block ANY steps forward. It feels like organized sabotage to me.
• rurban 4mo ago
  Well, he used a popular trick to use LG and Co KG as two seperate entities, usually in the combination GmbH & Co KG. Which is in my eyes unethical and complicated, but tax instructors favor that scheme to limit liabilities. Selbst Schuld. In my own companies I never spent more than I had, and never feared liabilities taking away my personal income. Never needed a lawyer, notar or such leachers. Everything can easily be googled. Could write invoices after two weeks. It needs much longer to get an internet connection. Germans are crazy taking you to court, but it's not as risky as in the US.
• silexia 4mo ago
  Germany is a nightmare of red tape.
• semessier 4mo ago
  for all the people posting founding in Ireland or Estonia (or England!!) etc. The local bureaucracies will spend infinite resources on nailing anyone down on the place of business being != to where the registration is. That is coercing one way or another to incorporate with the full overhead locally after all and most importantly that taxes are not happening in Ireland but to feed the local administration.
• procaryote 4mo ago
  Don't start a company in Germany. There are many better european countries
• WhyComboNadir 4mo ago
  I feel your pain -- I gave up (in Austria). The best thing that happened to me was that it took so long to get incorporated that I had time to talk to people about what happens next (e.g. annual filing, need for accountants even if revenue is still zero, etc.). So I consider the sunk cost a valuable 4,000 Euro learning experience, and I won't try to repeat it: https://news.ycombinator.com/item?id=48325340#48336339 https://news.ycombinator.com/item?id=48325340#48336339
• zuzululu 4mo ago
  [flagged]
• wunderlotus 4mo ago
  To me, this post reads like Claude wrote it. It has that cadence of staccato, fragments, repetition, punchlines to counterbalance previous AI writing styles. I’m wondering if it’s because it was translated or if it is just AI generated writing.
  • gastonmorixe 4mo ago
    and what's your problem with that? it reads fine and looks good
• jayess 4mo ago
  I love these stories. The timeline is precious. And the comments from folks saying "gee, you picked the most complicated business entity, joke's on you!" Just looking at my own state (Michigan) I can form the most "complicated" entity for $60 filing fee. Using a fill-in-the-blank form online. And have it approved the same day for an additional $50. Get an EIN online from the IRS in 10 minutes. Walk to a bank and open an account in about another hour. Annual renewal fee is $20. In less than a day and for $110, I have a corporation, EIN (federal tax registration number), and bank account. Open for business. An LLC is the same, just a different form filed with the state. I can then open credit card accounts online in the business name, register for sales tax online (get the license in about a week), and open a stripe account. Oh, and a businessowners general liability insurance policy is costing me $205 per year. $1 million in liability coverage.
• sam_lowry_ 4mo ago
  World Bank's Easy of Doing Business description is much less dramatic: https://archive.doingbusiness.org/en/data/exploreeconomies/germany#DB_sb https://archive.doingbusiness.org/en/data/exploreeconomies/g... But I know for a fact that these ratings are pure crap. I asked them to fix the entry for Belgium once, and they replied that they trust the officials providing the info even though I sent the references to the legislation.
• rock_artist 4mo ago
  Europe has lots of issues with companies. It's not just Germany. And the EU knows, hopefully it will improve the situation: https://www.euronews.com/my-europe/2026/03/18/48-hours-and-100-eu-presents-sped-up-business-registration-law https://www.euronews.com/my-europe/2026/03/18/48-hours-and-1...
• kazinator 4mo ago
  This is one of the few things that doesn't suck in Canada. In Canada you can easily and quickly obtain a GST number online. Furthermore, if you're self-employed or a small business owner, with a revenue of $30,000 or less, you are classified as a "small supplier", and don't have register and charge/collect GST. For someone just starting out who will not be a small supplier, I believe the small supplier designation still provides a buffer zone. You can start invoicing immediately and sort out your registration later.
• inglor_cz 4mo ago
  One of the problems of the EU is that the largest countries (FR, DE, IT) are exactly the most ossified and bureaucratic ones, and their pro-endless-papering attitudes leak out through Brussels to the more nimble, but smaller players which find it harder to organize blocking minorities. I find it interesting that most Germans don't seem to be aware of just how much worse their bureaucracy is than elsewhere, or even willing to defend such system as somehow optimal, even though it burns a lot of human energy and time while not even moving forward, just spinning the wheels in sand. Their refusal to even start thinking along the lines "maybe the Poles or the Balts or even the Romanians are doing something better and we should learn something from them" is very stubborn, probably stemming from surviving prejudice against the Wild East. These days, no one can compete with China et al. by burying their own economy in endless rivers of paper. This is categorically the false way.
• kjellsbells 4mo ago
  I'll state up front that I'm not German and have no experience of incorporating in Germany save for what my German friends tell me. Yet their complaints rhyme with OP's. Assuming they are well-founded, what stops a market entrant promising to streamline all the paperwork? eg a LegalZoom- or Stripe-type of entity that for a flat fee of X will handle all the paperwork and filing for you using essentially pro-forma legal and tax paperwork. OP is paying $$$ (well, €€€) for law and tax firms to do sed s/xxx/TheirCo/g on a bunch of forms and papers, and check their passport photo. Isnt this an obvious opportunity for a market disruptor?
• nunez 4mo ago
  Wild that they had to pay >€1500 to have documents notarized. This costs USD$25 here in the US and can be done online (not sure if incorporation documents count).
• FearNotDaniel 4mo ago
  Don’t they have Haftpflichtversicherung in Germany? Set up as a sole trader, get good-enough liability insurance, send invoices on Day 1, earn actual money while you wait for however long it takes to get that elusive company registration set up. In Austria as an IT Consultant you get liability insurance under a very reasonable group deal through the Wirtschaftskammer. Pay a bit more to get a private policy with more coverage of that’s important to you. I’d be really surprised if similar options aren’t available to our friends across the Alps.
• pentacent_hq 4mo ago
  As someone who as founded companies in Germany, I can understand a lot of the frustration with some parts of the process. It does indeed feel archaic that the notary has to read everything out aloud and the process for opening a bank account is maybe not terribly compicated but still more complicated than it needs to. The fact that getting a VAT number can take so long is also really infuriating. With that being said, it seems like the author received some poor advice from their law firm: 1) If the author mostly does consulting and contract work, a sole proprietorship would have been the better option as many others here have already pointed out. 2) The UG & Co. KG construct is unnecessarily complex for a small company; it does have some advantages but if they really wanted a limited liability company, they should have used the "Musterprotokoll" (standard protocol) for setting up a UG; that would probably have cost less than €500. Lawyers love to suggest GmbH/UG & Co KG though because it means more fees for them. 3) The advice they got regarding the name was almost certainly incorrect. First of all, "case law" is not really a thing in civil law countries like Germany. The company name usually gets checked by the local chamber of commerce (IHK) and while there are some rules (you're not allowed to just call your company the equivalent of "Supermarket Co", "Plenty UG" would have almost certainly been fine. And if the IHK says it's fine, the court will accept it too. Anyways, now that you have your company, I wish you all the best with it. You have exciting times ahead and the frustrating bit is (almost) over :-)
• woodpanel 4mo ago
  As AI makes it feasible to build good things with tiny teams I recently am finding myself repeatedly in discussions with friends about starting a business. It would be the first time in 20 years for me to be founding a GmbH. The thought of all that regulatory hassle you have to go through in Germany compared to those superniche ideas you would try out in our AI days, makes me weep [1]. I wonder if the gap we‘ve already saw in the last 20 years between EU and US in terms of tech success stories is just the tip of the iceberg of what’s to come. [1] notary costs (every visit ~400€ like changing your address or business scope), registry costs (also for every address and business scope change), hiring a tax attorney to produce compliant balance sheets (2,000 - 3,000 € /year), multiple types of yearly, quarterly, and monthly tax filings (tax attorney 150-300€/ month), different taxes which will be collected federally and locally, mandatory membership in Commerce Chambers (~350€/year), legal requirement to have a „business bank account“ (here at least today there are some startups making this easier and somewhat cheaper), mandatory membership at a trade-coop (yes it costs money), public health insurers in your neck nagging you to find some legal trap you stumbled into to extract bankrupting amounts of premiums from you, same with the state pension program. And just because you close down, it doesn’t just stop (you have operate the GmbH for years after before it gets deleted, so you pay money for years after still). Then there is the Exit Tax, which on the rare case you were successful locks you into Germany forever (unless again you pay professionals insane amounts of money). So this leaves you and your kindergarten-Management-slash-Single-parent-CRM vibe coding idea easily with effectively 500-1000 €/month just to deal with red tape. But it’s not just the money, each of these points I listed are just sources of endless amounts of paperwork with people/Organisations that know they don’t have to respect you or care about you at all to extract money from you. And no, UG is not helping at all because still exactly the same GmbH red tape applies. And I am 65% certain the proposed EU Incs will - in Germany - be not exempt from this.
• lschueller 4mo ago
  Luckily, it seems you do not plan to import physical goods... This would be a next round of applications, fees, registers and id numbers. There are several countries out there, offering to set up a company legally and in accordance to european legislation within a couple days. The fees you paid, seem quite high tbh. In particular for notary and court reg. I have the impression that the rates in Berlin are quiet above average.
  • lschueller 4mo ago
    Oh, and what I think is missing, are the fees for the mandatory membership in the industry and trade chamber (IHK) and of course the Berufsgenossenschaft. Especially the IHK is one of a kind... They are absolutely useless and a big bloated mess of self-governance, chaotic and really badly organized internally, but great at billing. When I've dealt with an attempt of fraud couple of years ago, I called them and asked if they have some kind of blacklists, guidelines or someone there, who could help in the case you get an business inquiry you suspect of being fraudulent. Thought, when i pay a yearly fee to them, maybe they have some experience with similar cases from other companies, who might reported attempta of fraud or fraudulent billing. Basically, one perso told me, they don't have a legal department, then I called the legal department directly, they forwarded me to the particular office, who again told me, he never heard of fraud attempts and he doesn't know if there is someone.. And this was the IHK in Hamburg. One of the largest chambers. Absolute joke.
• throwawayffffas 4mo ago
  You could register a limited liability company in Ireland for like 500 euros and a few days. Plus lower corporation taxes. Why not a simple UG. Liability is limited to company assets so its the same no? If a UG looks bad, doesn't a UG & Co. KG look bad as well? You can also just buy a clean ready made company. Also known as a shelf company. Not an accountant but I believe before registering for VAT if you are still under the threshold you can charge anyone without VAT. The threshold for cross country transactions is 100k.
• throttlebody 4mo ago
  Jezz, in new zealand i think it cost about $100 to register a limited liability company and half an later you were in business. Was about 25 years ago, but it hadn't changed much
• mactron 4mo ago
  This is plain stupid and not an example of hOw bAd GeRmanY is, but how we complain about everything and mostly the problem ourselves.
• orian 4mo ago
  It literally takes 1day in Poland.
• trizuz 4mo ago
  [dead]
• Haven880 3mo ago
  Just open shop in ASEAN. EU is dead end. Germany? You should consider just joining the government and work on paperwork. That is the greatest growth frontier in Germany right now.
• pawelkomarnicki 3mo ago
  Germany is a different kind of joke but everything OP listed smells fishy and scammy to be honest. I have a German company and there costs are not that massive. It took one notary meeting and some bills but the way he sets everything up looks… weird and convoluted. So he had to pay arm and a leg.