Just want to note that if you're not tied to Germany in particular, Netherlands is a much better option for US citizens looking to start a company, thanks to the Dutch-American Friendship Treaty. (yes, it's DAFT - <a href="https://en.wikipedia.org/wiki/DAFT" rel="nofollow">https://en.wikipedia.org/wiki/DAFT</a>). NL is a pretty easy place to business, at least as an entrepreneur. (Things get more complicated with lots of employees, like in most of Europe.)<p>The tl;dr version is US citizens can get a residency permit (2 years, renewable indefinitely, considered a non-temporary purpose of stay so you're eligible for permanent residency after 5 years) to start a business in the Netherlands with very few restrictions and very little in the way of capital requirements (€4500 in the business account.) Plenty of attorneys in the Netherlands can take care of the necessary paperwork for €1500, give or take, but lots of people manage it themselves too.<p>A few blogs and guides of the many out there:<p><a href="https://daftvisa.wordpress.com/step-by-step-guide/" rel="nofollow">https://daftvisa.wordpress.com/step-by-step-guide/</a>
<a href="https://survivingdaft.tumblr.com/" rel="nofollow">https://survivingdaft.tumblr.com/</a>
<a href="http://passthesourcream.com/daft/" rel="nofollow">http://passthesourcream.com/daft/</a>
Countries in Europe now offering start-up visas (without major capital requirements):<p><pre><code> - Denmark
- France
- Italy
- Netherlands
- Spain
- Portugal
- Lithuania
- Estonia
- Austria
- Sweden
</code></pre>
I'm currently applying for Denmark. Invest Denmark has offices all over the world (including Palo Alto) and will be more than happy to assist you through the process.<p>I've been in SV for 3 years, but never went for the green card. The US won't let me stay, so I guess I'll have to go suppress wages somewhere else.
Incorporating as a GmbH is the most common way to start a company in Germany (about 40%). The UG form is not very common (about 9%) and especially if you plan to do business with other companies in Germany I would not recommend it, because UGs are often frowned upon.<p>Founding a GmbH is not only relatively expensive, it also takes time. Many founders avoid incorporating themselves but prefer to buy a new GmbH. This is actually a business here, there are companies that keep a pool of fresh GmbHs and sell them to founders. Search for 'Vorratsgesellschaften' if you are interested in going that route.
If you are bootstrapping, or just founding a small side business, it doesn't have to be so complicated. There is a special provision for small businesses [1]. As long as you expect to stay under 50000 € in sales in a given year, you can be treated as a private person - meaning you don't have to pay VAT to the government for sold goods, but you do have to pay it to vendors like regular customers. Once you've grown enough, you can register as a company. Note also that parts of the complications and expenses arise when you want to be a limited liability company - if you are just making websites on the side, this is probably not neccessary.<p>Germany has a strong culture of entrepreneurship - being not employed but "selbstständig" (occupationally independent) is held in high regards. In my experience, while burocracy can be complicated, officials are very willing to help (I haven't made the jump myself, but I know from others). And one thing that is nicer in Germany / Europe is that it seems less litigious than the US. I would be constantly afraid to get sued or to break some unknown law in another US state, whereas here if you get a good accountant and avoid a few common pitfalls, you are pretty safe.<p>[1]: <a href="https://de.wikipedia.org/wiki/Kleinunternehmerregelung_(Deutschland)" rel="nofollow">https://de.wikipedia.org/wiki/Kleinunternehmerregelung_(Deut...</a>
Don’t start a company in Germany if you don’t have to. Expensive and bureaucratic tax system (accountants and time wise), regular accountancy checks which you have to pay your accountant for, very hard to close down and insolvency is very complicated.
What a giant pain in the ass compared to a UK incorporation. Takes about 5 mins, £15 and less than a day to form.<p>You can also sign up for taxes online in a few clicks.
Is this even necessary?<p>Can't they simply set up an LTD in Ireland and "use" it in Germany?<p>I know some Germans who did this for tax reasons, but I could imagine that Ireland formalities are easier to understand for English speakers.
The Very Important Question is how much time and money it takes to close the company, not how to open it. Not all startups are successful, so it always makes sense to think about the shutdown.
If you don't actively seek outside investment (yet) it's much easier to start off with a sole proprietorship or a partnership (GbR) in case of more than one founder.<p>The caveat is this though: You and your partners will be personally liable for the company's liabilities. In most cases however this doesn't matter as much as is often presumed. This is assuming you can 100% trust your partners (which should be a requirement when starting a company anyway) because a GbR implies that each of the partners is fully liable for the others' actions and decisions made with regards to the company, too. Creditors can recoup their assets from any of the partners.<p>First of all, as long as it's just you and potential partners, who put in their own time there usually isn't a whole lot of financial risk involved anyway. That changes once you decide to hire employees. At that moment you quite likely should incorporate.<p>Secondly, in many cases even with a GmbH or UG you will be held personally liable as a managing director anyway (for example when taking up a loan).
Before setting up companies in a different countries than where you live: This can get very messy and you should either have the company in the country where you live or live in a country which is very tolerant (tax-wise) about having companies in other countries.<p>On a secondary note: Germany is the worst country to incorporate: bureaucratic, expensive, tax offices are expensive and stuff is complicated, worst privacy regulation to come (from a company perspective), Labour is expensive compared to their skill level and English skills.<p>One good thing though: since share transactions are done with state notaries there is more safety when doing them and less need for lawyers for simple transactions. For more complicated transactions with higher funds it gets expensive again. The Articles of Association must be German, the rest can be in English.
A few cents from my side, setting up a company like GmbH or UG helps when you target a German market.
Germans are like that, they love to see the GmbH after the name of the company that they own or they buy / collaborate with.<p>Now an UG is young in comparison to GmbH, it is slowly being accepted.
Is that correct, €25000 to start a GmbH? The Swedish equivalent (AB), probably some differences, costs ~€5000.<p>I think the registration cost another ~€150.
But why do this instead of setting it up somewhere in the US? Having an office there - if you already have HQ or something in the US - might have benefits. But I doubt choosing most places in EU would have benefits over the US.
Guys I just released it also on ProductHunt! <a href="https://www.producthunt.com/posts/how-to-setup-a-company-in-germany" rel="nofollow">https://www.producthunt.com/posts/how-to-setup-a-company-in-...</a>