[Loic]

For the context: 7 years running a UK limited from outside the UK (until 2014) and 3 years running a GmbH from Germany (now). In both cases, I am a chemical engineer and I am doing mostly programming/consulting work[0].

At the end of the day, it costs basically the same if you are in UK or in Germany because your cost will be your salary and if you read the advices here you are anyway to small to run some special tax optimization programs.

For Germany because the costs are in my head:

- Notary costs for the contract: 450€

- Registration of the company (chamber of commerce): 150€

- Registration at the city level: 20€

Opening a bank account is free but it will cost you about 100€ to "run" it.

The real added costs are the accounting costs. About 80€/month to take care of the books and the paper work for the salary (inclusive transmission of the salary tax information to the Finanzamt and VAT) + 1500 to 2500€/year for the "end of the year" accounting and taking care of the related taxes.

So, the "company structure" costs are about €2000/year if you go through the services of an accountant (you really must do it in fact).

The real cost will anyway be your salary.

In UK, the taxes on the profit of the company is lower than in Germany, it is here where I would have been pleased to have in Germany at least a small "less than XXX€ no taxes" or a relatively easy way to schedule charges in the future to transfer money from one year to another. If you are a single person, saving for a future project is a bit hard in the current structure. Let say you want to accumulate 100k€ before hiring somebody, you end up with the need to make 150k€ extra on top of your salary to have the 100 on your bank account "free" from tax liability.

[0]: https://www.ceondo.com

[matt4077]

Do you feel that any of the bureaucracy creates an undue burden – or one that could possibly thwart a company which would otherwise achieve scale?

I'm asking because the article seems to buy into the narrative that these rules and regulation create an actual obstacle to ventures such as google ever being founded in Germany, and having gone through the process a few times, I can neither find any step of the process that I would consider completely unreasonable (except the chamber of commerce), nor could I imagine it being more than an irrelevant nuisance to any dedicated team.

I also think the 2000 Euro/year you're citing is true only for a company actually doing a fair amount of business and having employees. I'm sure it's less than half that if you're just maintaining the legal structure, or are a single founder before launch – VAT reporting, for example, has threshold below which reporting happens only quarterly or yearly.

[helge5]

The 2k/y (a little more) is what I pay for a one person GmbH serviced by an accountant. If you employ people or earn significant money, it'll cost you extra (employing people has its own filing/processing requirements, but the tax-account will do that for you, so it is not 'hard' per se). Note: you can reduce costs by doing a lot of stuff on your own, but well, do you want to? :-)

BTW: If you plan Google big and want to take on multiple investors pouring in 100k's or millions, you wouldn't usually found a 'GmbH' or UG but an 'AG' (Aktiengesellschaft, a share based construct). This involves more reporting/regulations but also makes it easier to deal with the ownership of the company.

Wrt your 'Google ever being founded in Germany'. The process of founding a company is not an obstacle, that part is easy enough. Other obstacles are manyfold: you don't have nearly as much VC money available, there are strong data protection laws, employing people is a significant liability in Germany (vs California where you can quit them any day), side-costs of employment are very high (state required insurances for medical, unemployment, disability, pension, ...) etc etc.

Summary: If you plan a small software/IT business it probably makes sense to just start with an UG and see where it goes.

[Loic]

In my case the turnover is around 100k€. The cost are based on turnover for most of them.

For the general question about rules etc. At my level, it is a non problem because everything is taken into account by my accountant. It means, it is very easy. Also, the GmbH structure is the same for everybody, it means, everybody must follow these strict rules and as a customer told me: "You have a GmbH, we can trust you that you do the things the right way".

So, for me, these relatively small requirements at the start are a way to keep the non serious people out of business. This is good for the trust when running your business on the long run. I like it this way.

[jsilence]

Saving money for future investments can be done with a so called Ansparabschreibung. This is a depreciation for an investment in the future. If later you decide not to invest you have to dissolve the Ansparabschreibung and then you have to pay taxes for the money in that year.

This might be attractive if for example you made some extra money this year which would raise your tax rate. If you know that you will make less money next year you can shift the extra money into the next year, reducing the total tax burden. Whether this is legal if you do not really plan to invest, IANAL. How would they prove it?

[Kiro]

> 1500 to 2500€/year for the "end of the year" accounting

Why does it cost so much? In Sweden it's like two entries in the book that take 5 minutes to do and generating two reports from your program.

[Loic]

Because it is all "vetted" by a registered accountant which is taking liability if the reporting is not don the right way. You can cut on the monthly fee for VAT/salary etc. by doing it yourself but if you consider that it costs you 80€ per month and that you invoice 100€ per hour of your work, it is not worth your time to have worry with this stuff.

The end of the year book stuff is a fee based on your turnover, it is regulated by the german accountant association.

[pyb]

In the UK, it is doable to do your own accounts, as a one man band.

[pyb]

Of course, a lot of small companies use accountants anyway, but I've heard of fees in the £100's, not 1000's.