Can a Non-resident Start-up a Company in Germany?
There are many reasons why you might want to move to Germany. But if you do, you will be required to work, and contribute to the country.
Some of you may not wish to get a job but have your own company. If you're wondering "Can a non-resident start-up a company in Germany?".
Yes. Here's why and how.
What You Will Need for an Entrepreneur Visa
If you wish to start-up a company in Germany, you will need to apply for an "Entrepreneur Visa".
As you can likely assume from the name, this visa is aimed at people who do not have a job offer in Germany. Instead, it's for people who wish to start up their own company in Germany.
To apply for this visa, you will need two sets of documents.
The first set of documents is to prove that you are capable of running a business. This includes a business plan, financing concept (profit and loss accounts, capital requirements, financing plan, liquidity plan), a copy of your CV, and your credentials.
These documents are required to ensure only those who create a business that will help the country, and the economy will get started.
The second set of documents required of you will be the typical documents that almost all immigrants into Germany will need to provide.
These are a passport, an extra passport photo, proof of financial stability (usually a bank statement), and proof of where you will be staying. This is to ensure you can stand on your own two feet and will not be requiring any state aid.
How to apply for an "Entrepreneur Visa".
To apply for this visa, you will need to fill out the required forms (which you can get online), and pay $80.
Once you've gathered everything you need, you shall have to book an interview and your German embassy. After this, you will attend your interview.
After you have attended the interview, you will need to wait for about two weeks. Afterwards, they will give you the verdict as to whether or not you may enter Germany under an "Entrepreneur Visa".
Once you have entered the country, you may stay on your entrepreneur visa for 90 days before you will need to apply for a different kind of visa. The reason this is done is to make sure only people who are running a successful business have the right to stay.
Germany is Very Welcoming to Entrepreneurs.
Germany is not just willing to let foreign entrepreneurs come over and start a business; they rather like it when you do so.
People who come over to start a company are going to create a lot of wealth, and pay a lot of taxes towards the German economy.
Germany will use this money to pay for the services that everyone else who lives in Germany can use. These are not the type of immigrants to rely on the German benefits system and therefore, will be welcomed with open arms.
Another reason why Germany likes entrepreneurs is that they can provide jobs for the German people.
One of the most common criticisms of people who come over to work is that the job they take is a job which has not been taken by a German Citizen. However, when you start your own company, you won't be taking a job from anyone, and you'll be providing jobs for people.
When more German citizens have jobs, not only will they have a higher standard of living, but they'll also be able to contribute more to the economy.
Why You Should Employ Free Agents or Via Agencies.
If your work is going to be seasonal, you may want to consider using either free agents or agencies.
A free agent is someone who works for you for a set amount of time. At the end of this period, you may wish to give them permanent employment, or you may want to let them go.
One of the main reasons why people will choose this option is that you don't need to worry about deducting any taxes, or giving any holidays. This will be the responsibility of the agents themselves.
You can also work through recruitment agencies, which are essentially large groups of free agents whom you can hire as one single entity.
Why You Should Hire Employees.
If you're looking for more permanent workers, it will probably be better to hire employees. Most job hunters will be looking for this option as they won't wish to do their own taxes.
The downside of hiring an employee is, of course, the extra paperwork you'll need to do. You will need to make sure they pay their tax and health insurance, but you also need to make sure they have holiday pay, a retirement package, and you follow the required employment laws.
Do the Same Rules Apply to the Self-employed?
Perhaps, you don't want to hire anyone else, and your company is just going to be you. This is known as "self-employment".
Self-Employment works slightly differently from setting up your own company.
If you wish to work as self-employed in Germany, it will likely depend on what you specialise in. If it's a skill which is in high demand but limited supply among German citizens, you will have a high chance of being able to.
However, if there are already a lot of self-employed people in your profession, it will be less likely that you'll be able to set up a company as Germany will view you as taking customers from the natives.
Make Sure You Know About German Tax Laws.
Anyone who owns a business will know that there are going to be extra taxes that you have to pay.
Most countries will have VAT on products, and some form of Income-tax. Germany is no exception.
Within Germany, you will need to pay the required federal tax, but you will also need to pay your municipal trade tax, the cost of this will vary depending on what tax your business is in. There is also what's known as a "Solidarity Surcharge". This is currently at 5.5% but will likely go up or down. People are also required to pay a "church tax".
Mittelstand: What is it and Why It Might Matter to You.
In countries like America, most of the companies that are based there are huge global corporations. Many of them will be monopolies. However, this is not the case in Germany. There are some large companies, such as Lidl, Dr Odker, and Haribo. But most of the businesses are small to medium-sized.
This collection of businesses is known as the "Mittelstand", and they are the heart of the German
economy. Without them, Germany would have a lot of financial struggles.
Can a non-resident startup a company in Germany? Yes! And not only can they, Germany likes it when they do! Of course, you are going to have to be aware of the laws and decide if you would rather hire free agents than employees. And it's a bit different if you're self-employed. But Germany is an excellent country for small or medium business owners.