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Setting up a business in Germany

19 October 2009
by Ina Dimireva -- last modified 13 June 2012

An overview of the process of starting a new business in Germany and contacts of help and advice centres.


Legal requirements

There are two main laws governing trade and commerce in Germany: the Commercial Code (HGB) deals with a trader’s own liability and business development, while the Civil Code (BGB) is for small business owners.

Commercial Code

Civil Code

Special conditions for ‘trades requiring a permit’ are listed under the Handicrafts Act.

Handicrafts Act

Legal structures for businesses

There are many possible business structures, depending on whether you start up on your own or with business partners:

  • Sole trader (e.g. businessperson or professional);
  • Registered trader (‘e.K.’ in German);
  • Limited liability company (‘GmbH’ in German);
  • Trading concern (with limited liability);
  • Civil law partnership (‘GbR’ in German);
  • Private limited partnership (‘KG’ in German);
  • Stock corporation (‘AG’ in German);
  • General partnership (‘OGH’ in German), etc.

Hybrid structures may also exist (e.g. GmbH & Co. KG). Depending on the legal structure involved, the liability is covered either by the capital contributed or by the total assets.

Legal structures

‘GründerZeiten’ newsletter: legal structures

Which legal structure is right for my business?

Business activities and related rules

For some trades and liberal professions, special certificates and qualifications are required in order to obtain a permit or licence to operate. Trades requiring a permit include:

  • Bookkeeping;
  • Security;
  • Hotels and restaurants;
  • Employment agencies;
  • Real estate agents;
  • Financial services;
  • Travel.

Business plans and evaluation

Anyone setting up a company can produce an online business plan, to turn the business idea into a structured and viable commercial concept. The business plan helps you to consider all the key points.

Business start-up portal: Business plan

To succeed, a new business needs a sound commercial strategy and secure financing.

Access to finance — Germany

Some standard requirements to be completed when setting up a business are the same as when opening a branch.

Branches — Germany

Administrative procedures

One-stop shop

The ‘Guide to authorities and forms’ (Behörden- und Formularwegweiser) provides a guide to authorities to be contacted and forms to be used throughout Germany, with addresses of the relevant bodies, e.g. licensing authorities and tax offices. The forms are available to download.

Business start-up portal: Guide to authorities and forms

Registering a company

Business registration

An entry in the Commercial Register is mandatory for larger companies, depending on:

  • the level of turnover;
  • the number of staff and their qualifications;
  • the range of services provided;
  • its business connections.

However, it is also possible to register voluntarily in the Commercial Register.

Legal consequences of registration in the Commercial Register 

You must advise the local trade licensing office of your company’s activities.

Many offices require a report to be filed in person. In larger towns, offices offer rapid business registration. Forms may be found on your municipality’s website.

You can get help with forms via the Economics Ministry’s business start-up software package (Softwarepaket für Gründer und junge Unternehmer).

Business start-up software package

Social security registration

Employers have to calculate the medical, healthcare, pension and unemployment insurance contributions for their staff and report and pass these to the employee’s sickness insurance scheme, backed up with proof of contributions. The social security contributions are paid half by the employee and half by the employer (exception: ‘geringfügig Beschäftigte’ – people working less than 15 hours a week).

Social insurance

Since 1January 2009, all people resident in Germany have been obliged to take out medical insurance. Germany has both statutory and private medical insurance providers.

Statutory health insurance

Guide to statutory medical insurance

Private medical insurance

The Services Directive: One-stop shops

The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.

For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’ , e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:

  • Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
  • What do I need to do when I want to offer my services abroad on a temporary basis?
  • What do I need to do to apply for a licence? Which authority is responsible?
  • Are the licences subject to a fee? What kinds of deadlines apply?
  • Which acts and decrees apply in my sector?
  • What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
  • Where can I turn for personalised advice and further information?

With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.

All PSCs are part of the European EUGO network ; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.

EUGO network

Specific procedures

Special rules and procedures apply to liberal professions, such as: tax reference number, authorisation issued by the relevant chamber, proof of professional qualifications, etc.

Institute for Liberal Professions (Institut für Freie Berufe - IFB): Information brochures

Craftsmen must abide by specific rules as well. They need a craftsman’s card when registering their business, if they wish to engage in an activity requiring a permit. It is issued by the local chamber of handicrafts after entry on the craftsmen’s register.

To be entered in the craftsmen’s register, a master craftsman’s certificate must be presented. The requirements defined in the Handicrafts Act must be satisfied.


You can find opportunities for further training and information about setting up a new business on the following portals:

Help with consultancy costs

Online training for people starting a business

Online academy of the Chambers of Industry and Commerce

Business start-up portal: Industries and target groups

Chambers of Industry and Commerce

German Confederation of Skilled Crafts (Zentralverband des deutschen Handwerks)


You can get an overview of the support programmes available at federal and local level through the support database, which acts as a one-stop-shop for businesses and start-ups in Germany.

Support database

The Credit Institute for Reconstruction (KfW) also offers support for businesses.

Credit Institute for Reconstruction (KfW) – Banking group: support facilities

The Chamber of Industry and Commerce offers support at the regional level.

Chambers of Industry and Commerce in the federal Länder: information on regional and supra-regional support programmes

Source: Your Europe

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