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How To Start A Business In Germany: A Comprehensive Guide


Looking to learn how to start a business in Germany? Then this comprehensive guide to starting a business in Deutschland will give you the tips.

I have been studying the Germany markets and what businesses are thriving because I have launched to provide domain registration and web hosting services to anyone who wishes to start a business in Germany.

After doing extensive research about starting a business and personally building multiple companies in the UK I believe I can tell you the core strategies to follow.

I have used AI to do the research and quickly find the answers from the web while adding my knowledge to the paper.

Let’s dive into this guide.

Why start a business in Germany?

Germany, with its strong economy and favourable business environment, offers excellent opportunities for entrepreneurs to establish and grow their businesses.

Here are a few important points to know about the German market:

  • Germany is among the top ten most innovative countries worldwide, according to the Global Innovation Index 2021. Germany invests heavily in research and development (R&D), spending 3.1% of its GDP on R&D in 2020, well above the EU average of 2.2%.
  • Germany is the largest consumer market in the European Union with a population of 83.2 million and a per capita spending power of around €25,000 in 2022. Germany ranks among the countries with the highest purchasing power in Europe and offers a large and diverse customer base for new products and services.
  • Germany offers a variety of incentive programs and public funding instruments that can help entrepreneurs start and grow their businesses. These include grants, loans, guarantees, tax breaks and equity financing. Depending on your business sector, location, and size, you can apply for different types of funding from federal, state, or local authorities.
  • Germany has a vibrant and dynamic startup ecosystem that fosters entrepreneurship and innovation. According to Startupblink, Germany ranks as the fifth-best country for startups in 2021, with Berlin being the top city for startups in Europe. Germany has many incubators, accelerators, coworking spaces, networks and events that support startups and connect them with investors, mentors, and customers.
  • Germany has a reliable and modern infrastructure that facilitates business operations and logistics. The country has a high-quality transport system that includes highways, railways, airports, and ports. It also has a well-developed digital infrastructure that provides fast internet access, high mobile penetration, and widespread e-government services.

However, like any other country, starting a business in Germany requires careful planning, compliance with local regulations, and understanding the cultural and business norms of the country.

In this article, you get a comprehensive guide on how to start a business in Germany.

What to consider first when starting a business?

1. Develop a Business Idea

The first step in starting any business is to develop a clear business idea. Research the market to identify potential gaps or opportunities. Consider the demand for your product or service, competition, target audience, and pricing strategy. It’s important to conduct thorough market research to ensure that there is a demand for your product or service in Germany.

2. Create a Business Plan

A business plan is essential for any entrepreneur looking to start a business in Germany. It serves as a roadmap for your business and helps you define your goals, strategies, and financial projections. A well-written business plan is also required if you need to secure financing or apply for a business visa.

Your business plan should include an executive summary, company description, market analysis, competitive analysis, marketing and sales strategies, financial projections, and an operations plan. Make sure to research the German market and tailor your business plan accordingly to align with local regulations and cultural preferences.

3. Choose a Legal Form

In Germany, there are several legal forms you can choose for your business, each with its own advantages and disadvantages. The most common legal forms are sole proprietorship (Einzelunternehmen), partnership (Personengesellschaft), and limited liability company (GmbH).

As a sole proprietor, you will be personally liable for any debts or obligations of your business. A partnership involves two or more individuals who share the profits and losses of the business. A GmbH is a separate legal entity with limited liability, which means that the owners’ liability is limited to their capital investment.

It’s important to consult with a legal professional or a tax advisor to determine the best legal form for your business based on your specific needs and circumstances. The Chamber of Commerce and Industry offers advice and many resources for entrepreneurs.

4. Register Your Business

Once you have chosen a legal form for your business, you need to register it with the relevant authorities in Germany. Registering a business in Germany typically involves the following steps:

  • Registering with the local trade office (Gewerbeanmeldung): If you are starting a sole proprietorship or a partnership, you need to register your business with the local trade office in the city where your business will be located. If your business is based in Munich for example, then you need to register it with the city of Munich as explained here. This can usually be done in person or online and requires providing information about your business, such as its name, location, and type of activity.
  • Registering with the commercial register (Handelsregister): If you are starting a GmbH, you need to register your business with the commercial register, which is maintained by the local district court (Amtsgericht). This requires drafting articles of association, appointing a managing director, and submitting other relevant documents. You can search the directory here.
  • Registering for taxes: You will also need to register your business with the tax office (Finanzamt) and obtain a tax identification number (Steuernummer) and a value-added tax (VAT) identification number (Umsatzsteuer-Identifikationsnummer) if applicable. You can find your local Finanzamt any other information regarding taxing in Germany here.

5. Obtain Business Permits and Licenses

Depending on the nature of your business, you may need to obtain permits or licenses from the relevant authorities in Germany. For example, if you plan to open a restaurant or a retail store, you may need to obtain a trade license (Gewerbeerlaubnis) from the local trade office. If you plan to operate a business that requires special certifications, such as a medical practice or a construction business, you may need to obtain additional licences, which you can search for here.

For all information about starting a business in Germany you can head to the online portal of the Federal Ministry of the Interior and Community.

How much does it cost to start a business in Germany?

The cost of starting a business in Germany can vary depending on various factors such as the legal form of your business, industry, location, and the specific requirements of your business.

Here are some of the common costs associated with starting a business in Germany:

  1. Business Registration Fees: When registering your business with the local trade office or the commercial register, you may need to pay registration fees. The fees can vary depending on the legal form of your business and the location where your business is registered. For example, the trade office registration fee for a sole proprietorship or a partnership can range from €20 to €60, while the commercial register registration fee for a GmbH can range from €150 to €500 or more.
  2. Notary Fees: If you are starting a GmbH, you may need to engage a notary to draft the articles of association and certify the registration documents. Notary fees can vary depending on the complexity of the documents and the notary’s fees schedule. Notary fees for registering a GmbH can range from €300 to €1,500 or more.
  3. Capital Investment: If you are starting a GmbH, you will need to make a capital investment as required by German law. The minimum capital requirement for a GmbH is €25,000, of which at least €12,500 must be paid upfront. The remaining amount can be paid within a certain timeframe after the registration of the GmbH. However, keep in mind that the actual capital investment for your GmbH may depend on your business needs and financial resources.
  4. Business Permits and Licenses: Depending on the nature of your business, you may need to obtain permits or licenses, which may incur additional costs. For example, if you plan to open a restaurant, you may need to obtain a food service permit, which can cost around €100 to €500, depending on the location and size of your restaurant.
  5. Taxes and Social Security Contributions: As a business owner in Germany, you will be subject to various taxes and social security contributions. This can include income tax, value-added tax (VAT), trade tax, and social security contributions for employees, if applicable. The exact amount of taxes and social security contributions will depend on the size and profitability of your business. Learn more about statistics on business tax in Germany here.
  6. Insurance: It’s important to have appropriate insurance coverage for your business, which can include liability insurance, property insurance, and other relevant types of insurance. The cost of insurance can vary depending on the coverage and the size of your business.
  7. Rent and Utilities: If you plan to lease a commercial space for your business, you will need to consider the costs of rent and utilities. The cost of rent and utilities can vary depending on the location, size, and condition of the commercial space.
  8. Initial Inventory and Equipment: Depending on the type of business you are starting; you may need to invest in initial inventory and equipment. The cost of inventory and equipment will depend on the nature of your business and the scale of your operations.

It’s important to note that these are just general costs associated with starting a business in Germany and the actual costs can vary depending on your specific circumstances, location and business type and legal form.

It’s recommended to consult with a legal professional, tax advisor, or business consultant to get a clear understanding of the estimated costs involved in starting your particular business in Germany.

Additionally, it’s important to budget for ongoing operational expenses and have a solid financial plan in place to sustain and grow your business in the long term.

How to start a business in Germany as a foreigner?

Starting a business in Germany as a foreigner can be a complex process, but with the right information and preparation, it is definitely possible. Before you get started, make sure you have obtained the right German visa before you enter Germany to set up your business.

Here are the general steps to start a business in Germany as a foreigner:

  1. Choose the Legal Form of Your Business: The first step in starting a business in Germany is to choose the legal form of your business. Common legal forms for businesses in Germany include sole proprietorship (Einzelunternehmen), partnership (Personengesellschaft), and limited liability company (Gesellschaft mit beschränkter Haftung or GmbH). Each legal form has its own requirements and implications, so it’s important to carefully consider the best option for your business based on your goals, liabilities, and tax considerations.
  2. Business Plan and Financing: Develop a detailed business plan that outlines your business idea, target market, marketing strategy, financial projections, and funding requirements. This will be crucial when seeking financing for your business. You may need to secure financing from your own savings, loans from banks, or investors.
  3. Register Your Business: You will need to register your business with the relevant authorities in Germany. For sole proprietorships and partnerships, you can register your business at the local trade office (Gewerbeamt). For GmbH, you need to register your business with the commercial register (Handelsregister) through a notary. You will need to provide information such as your business name, legal form, business address, and tax identification number.
  4. Obtain Business Permits and Licenses: Depending on the nature of your business, you may need to obtain permits or licenses before you can start operations. This can include licenses for certain professions, trade licenses, or industry-specific permits. The requirements for permits and licenses can vary depending on the type of business and location, so it’s important to research and comply with all relevant regulations.
  5. Register for Taxes: As a business owner in Germany, you will need to register for various taxes, such as value-added tax (VAT), income tax, and trade tax. You will need to obtain a tax identification number and may need to submit regular tax returns and financial statements.
  6. Open a Business Bank Account: It’s important to open a business bank account in Germany to manage your business finances separately from your personal finances. You will need to provide your business registration documents, tax identification number, and other relevant information to open a business bank account.
  7. Hire Employees (If Applicable): If you plan to hire employees for your business, you will need to comply with German employment laws, including registering with the social security system and obtaining necessary permits for hiring foreign employees. It’s important to familiarize yourself with the labour laws and regulations in Germany to ensure compliance and you can learn more here.
  8. Insurance: It’s important to obtain appropriate insurance coverage for your business, such as liability insurance, property insurance, and other relevant types of insurance, to protect your business and assets.
  9. Keep Accurate Bookkeeping and Financial Records: In Germany, businesses are required to keep accurate bookkeeping and financial records in compliance with German accounting regulations. It’s important to maintain proper financial records and submit regular financial statements to the relevant authorities.
  10. Seek Professional Advice: Starting a business in a foreign country can be complex, and it’s highly recommended to seek professional advice from a tax advisor, lawyer, or business consultant who is familiar with German regulations and requirements for foreign entrepreneurs.

Starting a business in Germany as a foreigner requires careful planning, research, and compliance with legal and regulatory requirements. It’s important to be well-prepared and seek professional advice to ensure a smooth and successful start for your business in Germany. If you’re not an EU resident, you will need to arrange a suitable visa to start a business in Germany, so go through the above steps carefully to avoid any setbacks. 

What are the 10 best businesses to start in Germany?

Germany is a prosperous and diverse economy with numerous business opportunities. Here are 10 potential business ideas that could be successful in Germany:

  1. E-commerce: With a highly developed online market and a tech-savvy population, starting an e-commerce Digital business can be lucrative in Germany. You could sell products or services online, from fashion and electronics to niche products, and leverage Germany’s strong logistics infrastructure for efficient shipping. Discover the top e-commerce businesses in Germany such as Otto, Media Markt and more here.
  2. Renewable Energy: Germany is a global leader in renewable energy, with a strong focus on sustainability and environmental protection. Starting a business in the renewable energy sector, such as solar power installation, energy-efficient technologies, or electric vehicle charging stations, can tap into the growing demand for clean energy solutions. Check out this Statista ranking of the most socially sustainable German companies in 2021.
  3. Food and Beverage: Germans have a rich culinary culture, and there are ample opportunities in the food and beverage industry. This could include starting a restaurant, cafe, food truck, or specialty food store, offering traditional German cuisine or international flavours. Germans are also successful food producers and you can find the most popular food brands in Germany here.
  4. Health and Wellness: With a health-conscious population, there is a demand for health and wellness businesses in Germany. This could include starting a fitness centre, spa, wellness retreat, or offering specialized services such as yoga, meditation, or alternative therapies. The health and wellness tech scene is growing significantly as well as this health and wellness startups in Germany list shows.
  5. Sustainable Fashion: As sustainability and ethical consumption gain traction, starting a sustainable fashion business can be a promising venture in Germany. You could create an eco-friendly clothing line, offer upcycled or vintage fashion, or promote fair-trade and ethical fashion brands.
  6. Tourism and Hospitality: Germany is a popular tourist destination, attracting millions of visitors every year. Starting a tourism-related business, such as a tour guide service, hotel, bed and breakfast, or a travel agency catering to specific niches, can be a viable option. Find more about the growth of tourism in Germany here.
  7. Education and Tutoring: The German education system is highly regarded, and there is a demand for private tutoring, language schools, and vocational training. Starting an educational or tutoring business, catering to specific subjects or skills, can be a profitable venture.
  8. Home Services: Home maintenance, renovation, and cleaning services are always in demand. Starting a business that offers home services such as cleaning, gardening, home repair, or interior design can be a lucrative opportunity in Germany.
  9. Sustainable Packaging: As the push for sustainable packaging gains momentum, starting a business that offers eco-friendly packaging solutions, such as biodegradable or reusable packaging materials, can be a relevant and environmentally-conscious business idea.
  10. Technology and Innovation: Germany has a strong technology-driven economy, and starting a business in the tech sector can be a promising venture. This could include software development, artificial intelligence, virtual reality, or innovative solutions for specific industries. According to Statista, the German IT industry revenue amounted to 102.5 billion euros in 2021.

These are just a few business ideas that have the potential to succeed in Germany.

It’s essential to conduct thorough market research, identify gaps in the market and your unique selling point, and tailor your business idea to the local context to increase your chances of success.

Additionally, complying with all legal and regulatory requirements, seeking professional advice, and having a solid business plan in place will be crucial for starting and running a successful business in Germany. 

What are the best home business ideas to start in Germany?

Starting a home-based business in Germany can be a flexible and convenient way to become an entrepreneur. Here are some home business ideas that could work well in Germany:

  1. Online Consulting or Coaching: If you have expertise in a specific field, such as business, finance, marketing, or career coaching, you can offer your services online from the comfort of your home. Many businesses and individuals seek professional guidance and advice, and online consulting or coaching can be a viable home-based business idea. Discover the hottest topics for coaching in Germany here.
  2. Content Creation: If you are skilled in writing, graphic design, or video production, you can start a content creation business from home. You can offer services like copywriting, content marketing, social media management, or video editing to businesses or individuals who need help with their online presence.
  3. Handmade or Customized Products: If you have creative skills, you can start a home-based business creating and selling handmade or customized products. This could include handmade crafts, jewellery, clothing, accessories, or personalized gifts. You can sell your products online through platforms like Etsy, eBay, or your own website. Focusing on eBay, it’s worth noting that handmade or customized products can become among the best selling items on eBay, as shoppers often look for unique, personalized options that they can’t find elsewhere. This makes eBay an excellent platform for showcasing and selling your unique creations to a wider audience.
  4. Language Teaching or Tutoring: If you are fluent in multiple languages, you can offer language teaching or tutoring services from your home. With a diverse population in Germany, there is a demand for language learning, including English, Spanish, French, and other languages.
  5. Home Baking or Catering: If you love baking or cooking, you can start a home-based baking or catering business. You can offer services like baking customized cakes, catering for small events, or providing homemade meals to busy families or individuals who prefer home-cooked food.
  6. Virtual Assistance: Many entrepreneurs, small business owners, or busy professionals require virtual assistance for administrative tasks, scheduling, or organization. You can start a virtual assistance business from home, providing administrative support remotely to clients.
  7. Home-based Beauty or Wellness Services: If you have expertise in beauty or wellness, you can offer services like hair styling, makeup artistry, beauty consultations, or wellness coaching from your home. You can also sell beauty or wellness products online or through direct sales.
  8. Online Retail: You can start an online retail business from home, selling products through an e-commerce platform, such as Amazon, eBay, or your own website. You can choose to sell a specific niche of products, such as baby products, pet supplies, or eco-friendly products.
  9. Online Fitness or Yoga Instruction: If you are a fitness enthusiast or a certified fitness or yoga instructor, you can offer online fitness or yoga classes from your home. With the growing trend of online fitness, you can reach clients locally or internationally through virtual classes.
  10. Home-based Childcare or Elder Care: If you have experience in childcare or elder care, you can start a home-based childcare or elder care business. You can offer services like babysitting, day-care, or elderly companionship from your home, catering to the needs of families or seniors in your local community.

When starting a home-based business in Germany, it’s important to comply with all legal and regulatory requirements, such as registering your business, obtaining any necessary permits or licenses, and ensuring that you adhere to tax regulations.

Additionally, creating a solid business plan, marketing your services or products effectively, and providing excellent customer service will be crucial for your success.

When you look at all those businesses, it starts with a plan, vision, a name, then registering a domain names, creating a website and marketing it.

When it comes to digital skills to build a business online, you can learn it SeekaHost University for free.

Need more tips and support on starting your own business in Germany?

Speak to Manuela Willbold who is German and an expert in English marketing as well as Germany based business marketing. She regularly shares tips in German on her own blog and on the German ClickDo blog and SeekaHost Blog.

With the right business plan, anyone with a vision can build a thriving business in the digital economy.

What do you think?

Fernando Raymond

Written by Fernando Raymond

Founder & CEO - ClickDo Ltd. & SeekaHost Ltd. Writes about business, startups and how to get online with domain names and web hosting. Creating the world's best hosting platform with

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