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How to Register a Small Business?

Frage

I intend to start a small business by the end of this year. What do I need to do legally to register? Am I allowed to test run a few products before formalising it? If it will not to work out - do I just deregister?

Antwort

Thank you for your inquiry and your interest in setting up a business in Germany.
Make it in Germany provides international professionals with information on working and living in Germany. Detailed information on setting up a business are also available on “Make it in Germany”.

Please consider the following information on residence requirements first:
If you are a non-EU citizen, in order to set up your own business you will need a residence permit allowing you to exercise a self-employed activity (“selbstständige Tätigkeit”). This may be

If you are not yet living in Germany, you will first need to apply for a visa for the purpose of self-employed occupation at the competent German mission in your home country. You can find the corresponding local contact on our “world map”. Information on visa processes are also available on Make it in Germany.

Generally, to apply for a visa, several criteria need to be fulfilled. This depends on whether you will work

  • as a freelancer (“Freiberufler”)
  • or wish to set up a business as a self-employed entrepreneur (“Gewerbe”)

Being self-employed or a freelancer makes a difference regarding certain formalities and has an impact on your company’s legal structure. Here you will find out more about the two different ways of setting up a business.
Moreover, to work as a self-employed professional the same conditions apply as for Germans. Please find out about these regulations.

For further questions on visa and entry regulations please contact the experts of the hotline “Working and Living in Germany” under the telephone number +49 30 1815 – 1111. The hotline offers personalized advice in German or English.

As mentioned above, in Germany there are two ways of setting up a business: You are either self-employed (“Gewerbetreibender”) or you are a freelancer (“Freiberufler”). You do not get a choice in this matter – it depends on your profession. Being self-employed or a freelancer makes a difference with regard to certain formalities and has an impact on your company’s legal structure. Freelancers need to register with the tax office (“Finanzamt”). To register as a self-employed entrepreneur, you will need to contact your local trade office (“Gewerbeamt”).

Even if you cannot wait to start your business activities, it is important to take the time for adequate preparation. That is why you should not rush into things. Instead, focus on drawing up a schedule. Setting up a business plan can help you to develop a step by step plan for your enterprise. Your business plan is also crucial for convincing someone of your business idea or your plans. Banks, for example, will use the business plan to assess whether you are a suitable candidate for a loan. Read more about how to get prepared to start a business.
Besides, you will also need to consider personal coverage, taxes, laws and contracts that might be important for you while setting up a business. Read more.

In Germany, many public information centres will give advice as you set up your own business. On the Startup Portal, under “advice and information”, you will find the contact information of regional and national information centres for entrepreneurs with a migrant background.
A general contact list is available on the Startup Portal.

Keep in mind, as you are operating in Germany, a good command of the German language is important. When preparing to set up your business, you will learn that many official documents are available in German only. If your German is not good enough yet, you should take a language course before you set up your business. Some advanced courses have a focus on business German.

For further Information regarding setting up a business in Germany, please visit the Website "Make it in Germany".

* Please note:
The information presented here is a general service offering. Only the German missions and the foreigners’ authorities are responsible for the issuance of visa resp. residence permits. For further questions, please contact directly the respective authority.

Reference: Justina Godesberg
Projekt „Make it in Germany“
Institut der deutschen Wirtschaft Köln e.V.
März 2020

Notes of the editor:

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