Business registration for foreign entrepreneurs: The path to your own company in Germany

Foreign entrepreneurs can set up a business in Germany Registering a business and setting up a companyHowever, they must meet certain legal and tax requirements. This guide explains the Procedure for business registrationwhich necessary documents and the legal requirements for a successful start in Germany.

1. who must register a business?

Anyone in Germany who has a self-employed, commercial activity must be registered with the responsible Trade office log in.

are subject to business registration:
Sole traders (e.g. traders, craftsmen, service providers)
Corporations (e.g. GmbH, UG)
Partnerships (e.g. OHG, KG)

Freelancers (e.g. doctors, lawyers, consultants, artists) need No business registrationbut must apply directly to the Register with the tax office.

2. requirements for foreign entrepreneurs

Depending on the country of origin, different requirements apply for business registration:

a) Entrepreneurs from the EU/EEA/Switzerland

Can start a business without restrictions
No residence or work permit required

b) Entrepreneurs from non-EU countries

Residence permit with work permit for self-employed persons required
Proof of sufficient capital and a viable business concept
Permission from the local Immigration office

Tip: If you do not yet have a residence permit, you can first set up a limited company and then apply for a residence permit to run the company.

3. steps to register a business in Germany

Step 1: Choose business form
Sole proprietorship → Simplest and cheapest form, but with full adhesion
GmbH (limited liability company) → At least € 25,000 share capital, limited liability
 **UG (entrepreneurial company, "mini-GmbH") ** → From € 1 capital, but limited liability
OHG or KG → For several shareholders, but with personal liability

Step 2: Register your business with the trade office

• The competent trade office is that of the city in which the company has its registered office
• Required documents:
   Passport or identity card
   Proof of a business address in Germany
   Extract from the commercial register (if required)
  Residence permit (for non-EU citizens)
• Costs: 20-60 €, depending on the city

Step 3: Registration with the tax office

• After the business registration, the tax office sends the Questionnaire for tax registration
• Application for a Tax number & VAT ID

Step 4: Commercial register entry (if required)

• Mandatory for GmbH, UG, OHG or large sole proprietorships
• Registration via a notary (costs: 150-300 €)

Step 5: Membership of the Chamber of Industry and Commerce (IHK) or Chamber of Crafts (HWK)

• Automatic registration after business registration

Step 6: Pay attention to social security & trade tax

• Compulsory health insurance and, if applicable, pension insurance
• Trade tax liability depending on location (approx. 7-17 % of profit)

4 Tax obligations for entrepreneurs in Germany

Value added tax (VAT) - 19 % (reduced 7 % for certain goods)
Income tax - Progressive up to 45 % (for sole traders)
Corporate income tax - 15 % (for GmbH/UG)
Trade tax - Depending on the city (from 7 %)

Tip: Small businesses with less than € 22,000 annual turnover are exempt from sales tax.