Starting a Company in Germany and the Netherlands – Top Tips

Germany or the Netherlands should be your first pick if you are an entrepreneur looking to start your firm in Europe. This is the same for any large or small business that’s looking to expand to Europe. So why and, more importantly, how to open a company in the Netherlands or Germany? Let’s find out.

Starting a Company in Germany

Germany’s strong economic position and central location make it one of the best places in the world for launching a new company. By outlining the precise processes needed in establishing a business, this book is meant to assist anybody wishing to work for themselves in Germany.

Make sure you have long-term residency authorization before launching a business in Germany. According to EU legislation, residents of the EU, EEA, or Switzerland are permitted to live and work in Germany without restriction, even as independent contractors.

Apply for a Resident Permit

Prior to establishing a business here, citizens of other nations must apply for a residence permit to get that self-employment status. You must show that your company serves an interest in the German economy and, more importantly, that you have the resources to carry out your plan in order to be eligible for this sort of temporary residence visa. You will be required to provide a business plan that details these requirements.

Get Non-German Qualifications Recognized

In Germany, several occupations are subject to regulation. Examples include security guards, taxi drivers, and insurance advisors. This means that only non-Germans with comparable international credentials may practice these professions. If you want to practice one of these professions as a business owner, you must apply to the appropriate government to have your foreign degree recognized. You can get guidance on this procedure from your local authority.

Gewerbetreibender vs Freiberufler

The first thing to think about is if you are a Gewerbetreibender or a Freiberufler, as in, a tradesman or freelancer. There are some occupations that are regarded as Freiberufler, such as those in the legal, medical, scientific, and linguistic fields. You would be a Gewerbetreibender if you worked as an artisan or in another occupation focused on trade. The distinction is significant because you may require additional licenses to practice in some trade occupations. In any event, because there is less paperwork, becoming a Freiberufler is the simpler path. The majority of jobs for Freiberufler don’t need a Gewerbeschein (trade license).

Choose a Limited Liability Type

You will want to make sure it’s the right legal entity for obvious reasons. The basic requirement for a GmbH is €12,500, although €25,000 is ideal. For a UG, €1 is required, making it a popular option for startups; however, an amount of €1,000 or more is advised. Due to the need for fewer share capital, the latter is known as the “mini” GmbH. Consider the GmbH if your share capital approaches €12,500.

Your company name and company aim will be checked for conformity at no cost by the German Chamber of Commerce and Industry (IHK). They will also assign you a company name free of charge. 

Hire a Notary Service

Documents such as the Articles of association, Shareholder’s list, and founding documents for the bank account will need to be submitted to the notary service you hire. The charges of the Handelsregister registration can be attested to by notaries. Inquire about this option with your notary. Some exclusively perform it for well-known clients. Some will agree to it, provided you deposit the money with them in cash. Because the Handelsregister will handle the registration immediately, this can save around a week of time. If not, they will issue you an invoice and hold off until you make the payment.

Taxes

The local tax office will contact you shortly after you have registered with the trade office, often requesting you to complete a “Fragenbogen zur steuerlichen Erfassung” form. Alternatively, you can download a form to complete and send it through ELSTER to expedite the procedure. 

The form is only accessible in German; if you have any questions, it would be best to speak with a tax professional rather than run the risk of causing a delay by providing inaccurate information. Completing this form is a crucial step to getting your national tax number. Your personalized tax schedule will be sent to you from the tax office based on the information that you have provided. 

Berlin is the finest location to go if you’re looking for a welcoming environment to start, and business registration should be very simple. Although the procedure is virtually the same throughout Germany, entrepreneurs might benefit from developed business networks and social services that are lacking in other locations.

Starting a Company in the Netherlands

There is a compelling reason why new business owners flock to the Netherlands. One of the reasons is that every form or size of business can thrive in the unique business culture that the country has to offer. Whatever your company’s objectives, the Netherlands offers excellent prospects for success. 

The Netherlands has a number of alluring incentive schemes that attract diverse kinds of businesses in order to facilitate this heterogeneity.

Rotterdam and Amsterdam are the two most often chosen locations for new businesses. That’s because many believe that starting a business in the capital of the Netherlands, Amsterdam, makes the most sense because it draws the most visitors and business travellers. 

Getting a Startup Visa

The Dutch startup visa provides an additional choice for non-citizens of the EU, EEA, or Switzerland. According to some estimations, startup investment agreements in the Netherlands totalled over €500 million in 2018. Startups have grown to be quite popular in recent years.

Non-EU nationals can establish a company in the Netherlands with the intention of building a wealthy, successful business thanks to the startup visa program in the country. The visa provides foreign business owners a year to start their ventures, giving expatriates time to get accustomed to Dutch business culture, expand their clientele, and other things. 

The startup visa has a number of conditions, including working with an accomplished mentor who is based in the Netherlands and submitting a thorough business plan.

Documentation

For various corporate formations, the Netherlands has varied laws and regulations. In contrast to bigger firms, which are sometimes referred to as freelancers and private limited companies are generally sole traders or one-person organizations. Unincorporated and incorporated business structures are the most popular legal forms (rechtsvormen). You might want to seek the assistance of some experts for further details and suggestions on the best structure for you.

Get Your New Business Registered

You must go to the KVK in the Netherlands to formally start a business. Online appointment scheduling is available, and you can register before the appointment by completing a form. The Chamber of Commerce offers English translations for registration forms, even though they must be written in Dutch.

A valid form of identity, such as a residency permit, driving license, or passport, will be required for the application, along with the name of your business, proof of educational accomplishments such as certification, and a registration fee.

The Netherlands Chamber of Commerce will examine your ability to sustainably grow your business there and may need you to provide supporting documentation. You must have a business address in the Netherlands. Please be aware that a PO box cannot be used as a company address. The Dutch Tax and Customs Administration will get your information if you select a legal structure without a formal organization, such as in partnership or sole proprietorship.

Paying Your Taxes

It’s crucial for you to stay current on all facets of your company’s administration. As needed by the Dutch tax office, this comprises bank statements, contracts, and all other company costs. Invoices must follow a specified structure and include essential details. Online accounting tools are useful for carrying out this task independently. To help with administrative tasks and tax payments, you may also enlist the aid of a Dutch-qualified accountant. The standard CIT rate stands at around 25.8%. A tax intermediary can help you navigate through the business tax process once you establish your company in the Netherlands. 

In the Netherlands, almost anybody can open a new business. However, the process may change significantly depending on whether you require a permit or whether you are a citizen of the European Union or another third country. Make sure to start out correctly by studying all about the laws, rules, and requirements for becoming an entrepreneur or company owner if you want to establish a business in the Netherlands.

Contact us today to discuss the details of opening a branch or subsidiary in Europe.