How to start a business in Germany

How to start a business in Germany

by Adriana Stein

Updated November 8, 2022

Starting a business in Germany can become extremely complex. It involves determining the suitable legal form, ensuring taxes are done correctly, and registering with the appropriate authorities. To give you more information about how this works, here is a guide for founding your own company in Germany.

Everything you need to do to start a business in Germany

The sections below outline the process it takes to start your own company in German. However, please note that some items apply only for non-German citizens and differ depending on whether you want to be a solo freelancer or a corporation.

Determine whether you’re a Freiberufler or Gewerbetreibender

The first item to consider is whether you are a Freiberufler (freelancer) or a Gewerbetreibender (tradesman). There are certain professions such as in the health care, legal, scientific, and linguistic areas that are considered as Freiberufler. For other trades-based activities such as a craftsman you would be a Gewerbetreibender. The difference is important, because for some trade professions, you’ll need additional permits or licenses to operate. In any case, the easier route is to become a Freiberufler, because there is less paperwork involved. Most Freiberufler professions don’t require a Gewerbeschein (trade license).

For further information, view this article to help you determine the difference. 

Select a legal form for your business

If you would like to build a corporation, you also need to consider the legal form your business will take. The majority of businesses in Germany use the GmbH legal form. Here is an overview of the different types:


Legal Form Description
  • A business consisting of a solo freelancer
Gesellschaft bürgerlichen Rechts (GbR)
  • Multiple business people or freelancers form a business
  • No minimum capital requirement or special formalities
  • All partners are liable according to their private assets
Gesellschaft mit beschränkter Haftung (GmbH)
  • At least one person has a share capital of a minimum of 25.000 EUR
  • Founded upon registration with the Handelsregister (Commercial Register)
  • Shares aren’t embodied in a certificated and aren’t listed on the stock market
  • A Geschäftsführer (Managing Director) must be appointed
Aktiengesellschaft (AG)
  • At least 5 members with a share capital of a minimum of EUR 50.000
  • These shares can be listed on the stock market (but isn’t required)
  • Founded upon registration with the Handelsregister (Commercial Register)
Offene Handelsgesellschaft (OHG)
  • All partners in the OHG have unlimited liability, meaning they participate in operating the business
  • Decisions must be made by majority vote
Kommanditgesellschaft (KG)
  • A partnership with two stakeholders 
  • The general partner (Komplementär), who has unlimited liability extending to their personal assets
  • And the limited partner (Kommanditist) whose liability extends to the nominal holdings in the firm
GmbH & Co. KG
  • A combination of GmbH and KG 
  • A subsidiary company that is physically separated from the parent company but is not entirely independent
  • An office that is fully dependent on the head office in every respect

Get your visa (if you’re not a German citizen or from the EU)

If you’re not a German citizen or from the EU, you’ll also need to apply for your visa in order to start a business in Germany. If you’re a freelancer, you’ll need a freelance visa. If your business takes another legal form, you’ll likely need a business visa. Visa applications and their requirements in Germany are on a case by case basis, so it’s best to make an appointment with the responsible Ausländerbehörde (foreigner’s office) to discuss what steps you need to take. At minimum you will need:

One tip here for those who are entirely new to Germany: most foreigner’s offices in Germany don’t speak English so you will need to learn some German in order to process your visa and communicate with the visa officer during your appointments.

Register your business address

Once you’ve outlined what your business will be, you then need to get your Anmeldebestätigung (business registration), similar to the address registration for your private residence. In order to get your business registration, you make an appointment at your local Bürgeramt (citizen’s office).

Official business registration

Depending on your type of business you may need to register with the Handelsregister (Commercial Register). Furthermore, all businesses (including Freiberfuler) need to register at the Finanzamt (tax office) in order to receive a tax ID (and potentially a VAT ID if your business charges VAT). These numbers must be included on all your invoices.

Get a tax advisor

As a freelancer, my biggest advice for anyone who wants to start their own business in Germany is to get a tax advisor. This will be your go-to person for all the business-related documentation you need for your visa, invoices, Finanzamt registration, and tax documentation preparation (which is extremely complex in Germany), and much more. Mistakes on these topics are a big deal and it’s much better to have someone who can help you and provide advice so you avoid any related legal issues.

Update your insurances

When you start your own business, you also need to update or set up your health insurance for this status. If you’re required to prove health insurance for your visa, this needs to be done as soon as possible so you have legitimate health coverage in Germany (it’s illegal not to). For people who are self-employed, you typically choose a form of private insurance, in which the premiums and related services are entirely up to your insurance provider. Alternatively, you can opt for public insurance, in which the premiums are based on a fixed percentage of your average monthly income. This also heavily varies and depends on your insurance provider as to which percentage this is.

For further information on any of the above processes, take a look at the “Starting your own business” guidelines from the German Federal Ministry for Economic Affairs and Energy.

Knowing German is certainly going to help you when attending appointments and filling out forms. Visit the Lingoda website and sign up for your free 7-day trial with our native speaking teachers today! 

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