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by hef19898 2246 days ago
My impression was that investments in US entities requires, kind of, a lawyer. So not that much different, if you ask me.

With Germany being in the EU, you can also incorporate in whatever EU country you want. The UK is obviously out for now, but take Estonia for example. Makes taxes a lot more complex for the company, but much less so when compared to YCs way of transforming into a US Inc. with a German / EU local entity. Especially when there are now US based operations.

That being said, there is nothing wrong with sticking to one market. Not the last reason being to avoid the above mentioned entanglements.

3 comments

From what I understand, The us market is way way easier than most foreign markets you dint need a lawyer to incorporate or frankly to deal with the first few hundred thousand bucks of investment using standard terms, and the amount of bureaucracy and red tape is far far less here. Caveat: I cant speak to Germany specifically and can only speak to my experience with building a company in the us and what I hear from friends in europe and asia
True that, in ermany you legally have to pass through a notary, while in the US it would simply be wise to do so.

The incorporation of my company in germany, including documentation, notary fees and registration, cost me less than 1.000 € and took 7 days from notary to registration. VAT registration took almost 5 weeks, so. But that was independent from the legal entity.

In the UK or USA I can setup a company in a few days and generally legals for a Seed round wouldn't really ever exceed $25k. In Germany there's far far more hassle sadly, German language capability is a must and the notary requirement creates enough inertia I'd rather just never deal with a GmbH unless it's absolutely necessary. One of our deals required reading legal documents out loud in person for 3 hours - that's just not really feasible as an investor at scale.
> My impression was that investments in US entities requires, kind of, a lawyer. So not that much different, if you ask me.

Germany doesn’t kind of require a layer. You actually need a lawyer. In the Anglosphere you would be wise to procure the services of a lawyer if you’re doing anything remotely out of the ordinary and dealing with lots of money but if not you can set up an LLC or Ltd. or some other standard corporate structure using off the shelf documentation and b filling in the appropriate blanks yourself.