Founding your own company in Germany is easy. But it takes a long time.

To take away some of the fear from all aspiring founders, I would like to walk through the steps that my co-founder and I went through when founding our GmbH.

Note: This is neither tax nor legal advice. It is merely a personal field report. The costs listed here may differ from those for your own company formation. Some are fixed, such as notary fees or the cost of registering a business, others depend on the effort spent by your lawyer or accountant, for example.

Before you found a company, you obviously have an idea. Check whether the idea carries far enough and what the market and the competition look like. For an idea that does not carry far, the effort of founding a company is too high.

Decide on a legal form. If you found a sole proprietorship or a partnership (a GbR, for instance), you will be done faster and can stop reading here. If you want to found a GmbH, the following points will hopefully help you along a little.

Founding a company in Germany is often described as too cumbersome and too bureaucratic. It is bureaucratic and lengthy, but it is not really complicated.

Let me be blunt: if founding your company already overwhelms you, then being self-employed may not be your thing. It will be one of the easier things on your journey as a founder.

Optional: Appointment With a Lawyer

If there are at most three of you founding the company and you appoint only one managing director, take a look at the formation using the sample protocol (§ 2 (1a) GmbHG). This is a reduced version of the articles of association that every GmbH must have.

If you are founding the company with several shareholders and need articles of association, go to a lawyer. Have them draw up a managing director employment contract right away. You will need it if you want to employ yourselves as managing directors of the GmbH.

Cost: €850

+1 Day: Appointment With the Notary

Make an appointment with a notary. Find one yourself or use online services such as beglaubigt.de. The notary notarises the formation of your GmbH and registers you in the commercial register.

In the period between the notary appointment and the entry of the GmbH in the commercial register, your company has the official legal form “GmbH i.G.” (in Gründung, in formation). You also have to state it that way on your website, for example.

From the moment of registration onwards, every business letter, every email signature and the legal notice must contain: the legal form and registered office of the company, the registry court, the HRB number and all managing directors with their first and last names (§ 35a GmbHG).

Cost: €830

Bank Account and Share Capital Contribution

You need a bank account. The problem here is that not many banks accept a GmbH i.G. as a customer. There are a few online banks geared towards company founders, such as holvi.com. Use one of those banks. Check whether you can open the account before the notary appointment already. That saves you time later on.

If you want to switch to the local bank around the corner later, that is no problem once the formation is complete.

The share capital of a GmbH is at least €25,000. If you have two shareholders with 50 % of the shares each, for example, each of them has to raise a capital contribution of €12,500. However, only half of that has to be paid into the bank account. The rest you owe the GmbH forever.

Pay in the capital contribution and send the bank statement to your notary. Apart from the formation costs, you may not touch the money in your account until the GmbH is fully formed with its entry in the commercial register. So do not buy a new laptop just yet.

The GmbH may only bear the formation costs themselves if the articles of association explicitly provide for it, and only up to the amount stated there. €2,500 is customary, i.e. 10 % of the share capital. Anything above that you pay privately. Make sure at the notary that this clause is in the contract.

+14 Days: Entry in the Commercial Register

Two weeks later, your newly founded GmbH appears in the commercial register. Download the corresponding commercial register extract right away, you will need it later.

Cost: €300

Transparency Register, Business Registration, Tax Office

As soon as you have your commercial register number, you can kick off the next things:

Register with transparenzregister.de. Right after the registration, file an Antrag auf Einsichtnahme (application for inspection). This is the only way to obtain an extract from the transparency register for your GmbH.

Cost: €19.80 per year

Register your business with the trade office responsible for you. Every GmbH is also a business.

Fill in the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) for the tax office. This can be done online via elster.de. Along the way, select the option stating that you need a VAT identification number. Do not take unnecessary time with this. Being assigned the VAT identification number takes a long time and blocks you elsewhere. Besides, there is a one-month deadline.

Register with the Federal Employment Agency. There you will get a company number.

Optional: Accountant

If you do not want to or cannot handle your bookkeeping entirely yourself, find an accountant. Here, too, you can ask around among people you know or choose online options such as onlinebilanz.de. It depends on how much personal contact you want.

Opening Balance Sheet

You have to submit an opening balance sheet to the tax office. You can do this yourself or leave it to your accountant.

Cost with the accountant: €237

Shareholders’ Meeting

The shareholders have to vote on the managing director employment contracts. For that, you convene a shareholders’ meeting. You can also hold it by phone or video call.

If you have several shareholder-managing directors, sign the contracts crosswise for each other:

  • Shareholder A signs on behalf of the GmbH on the contract for managing director B
  • Shareholder B signs on behalf of the GmbH on the contract for managing director A

The background is § 181 BGB: nobody may conclude a transaction with themselves. For the crosswise signature to be valid, you need two things: the exemption from the prohibition of self-dealing in the articles of association, entered in the commercial register, and the shareholders’ resolution authorising the respective shareholder to sign on behalf of the GmbH. It is best to discuss both at the appointment with your lawyer.

+14 Days: Trade Register Registration

14 days later you receive an invoice from the responsible office, along with your trade registration number.

Cost: €53

+7 Days: IHK

The IHK will get in touch with you. You do not have to do anything. You receive yet another number. A commercially active GmbH is always an IHK member as well. For craft trades, the Chamber of Crafts is responsible instead. The contribution depends on your trade income and is set by the respective IHK.

For trade income up to €49,000: €150 basic contribution + 0.19 % of the trade income

+10 Days: Tax Number

You receive a letter from the tax office responsible for you. In it you will find your tax number. With the tax number you can, in theory, issue invoices to customers in Germany. It does look a bit unusual, though, if an invoice does not state a VAT identification number.

In the same letter you are also informed of the period for which you have to file advance VAT returns.

+5 Days: VBG

If the VBG is the statutory accident insurance institution responsible for your business, it will contact you automatically and you will receive a number.

Do not rely on that, though. Every company has to register with its accident insurance institution itself within one week of starting its activity (§ 192 SGB VII).

Whether you pay contributions depends on your status: shareholder-managing directors with a majority stake count as entrepreneurs and are not subject to compulsory insurance.

+6 Days: Approval for Taxation Based on Payments Received

If you selected in the Fragebogen zur steuerlichen Erfassung that you want Besteuerung der Umsätze nach vereinnahmten Entgelten (cash accounting for VAT), you will receive the corresponding approval from your tax office (or not).

+7 Days: Business Identification Number

Another seven days later you receive, digitally this time, a Wirtschafts-Identifikationsnummer (business identification number). It comes automatically, you do not have to do anything. However, there is nothing you can do with that number yet either.

+3 Days: “Broadcasting Fee for Your Business Premises”

The Beitragsservice (GEZ) wants money from you, so it gets in touch with you. You fill in a form. The fee depends on the number of employees. If your registered office is at a location for which the fee is already being paid, your flat for instance, the fee for the GmbH does not apply.

+14 Days: VAT Identification Number

Another two weeks later you receive your VAT identification number. From now on you can operate commercially and issue invoices both domestically and abroad.

Social Security and Pension Insurance

Important: Clarify these points with your accountant or your lawyer.

This point is only relevant if you are employed as a shareholder-managing director in your GmbH. If you hold at least 50 % of the shares in the GmbH, you do not count as being in dependent employment. As a result, the GmbH does not pay social security contributions for you, you have to do that yourself.

Your employment status has to be determined by the clearing office of the German pension insurance. To that end, fill in these two forms:

For the question of whether you are subject to compulsory pension insurance as a self-employed person, there is form V0020 - Fragebogen zur Feststellung der Versicherungspflicht kraft Gesetzes als selbständig Tätiger / Antrag auf Versicherungspflicht als selbständig Tätiger.

All of this can be done online.

If you are not in employment subject to social security contributions, take care of health insurance, unemployment insurance and pension insurance. For unemployment insurance there is a hard deadline of three months.

A Few More Notes

Keep your documents together. You will need one of the numbers mentioned above again and again, so make sure you have them at hand somewhere, ideally digitally.

Be diligent with your bookkeeping. Regardless of whether you do it yourself or pay someone to do it, you have to maintain your incoming and outgoing invoices and bookings. Do this promptly.

Take care of insurance policies that are relevant and possibly mandatory for your company.

Also look into which documentation obligations arise for your business with regard to GDPR rules and the EU AI Act.