Starting a business in Germany

What the offices are, in what order, and which three boxes on the tax questionnaire decide how you are taxed for years afterwards.

Checked against the sources on 2026-08-30

Before anything else

This is a map, not advice. It is written by somebody who has been through it, checked against the sources listed at the bottom, and it will go out of date - Germany moved the small-business VAT thresholds in 2025 and renamed the law behind the website imprint in 2024, both of which broke every guide that had not been re-read.

The order below matters more than it looks. Registering the trade automatically starts four other things, and the tax questionnaire that arrives afterwards contains the decisions that are hard to undo. Everything else on this page is recoverable.

One reassurance up front, because it is the thing people put off: registering a business in Germany is cheap and quick. The trade office costs between €10 and €65 and takes about twenty minutes. What takes time is deciding what to tell the tax office, which is why most of this page is about that.

First fork: are you actually a trade?

Germany splits self-employed people in two, and the split decides whether you go to the trade office at all. Getting it wrong in either direction is the single most common mistake, and it is expensive in one direction only.

Gewerbe or Freiberuf?

Freiberufler (liberal profession)

You practise one of the professions listed in § 18 EStG or something plainly similar: doctor, lawyer, tax adviser, engineer, architect, journalist, translator, teacher, artist. Software development often qualifies as engineer-like when the work is genuinely engineering rather than trading.

No trade registration, no trade tax, no chamber of commerce membership, no fee.

You do not get to choose this - the tax office decides, and it can decide years later and bill backwards. If you sell a product, run ads against it, or resell anything, you are a trade whatever your job title says.

Gewerbe (trade)

Everything else, and certainly anything that sells a product, a subscription, advertising space or somebody else’s goods. A studio selling a game is a trade. A platform charging for accounts is a trade.

A registration fee of €10-65, chamber membership, and trade tax above the allowance.

Trade tax sounds worse than it is for a sole trader: the first €24,500 of profit is exempt, and most of what is charged above that is credited against your income tax.

Full-time or alongside a job?

Nebenerwerb (secondary)

You keep a job and the business is the smaller part of your week and your income.

Read your employment contract first: most German contracts require you to notify your employer, and a side business competing with them is grounds for dismissal. Your health insurance stays as it is, which is the real saving.

Haupterwerb (main occupation)

The business is your work.

Your statutory health insurance changes from a percentage of a salary to a contribution calculated on your income with a minimum floor. Tell your Krankenkasse before you start, not after - this is the bill that surprises people, and it is the largest one on this page.

Second fork: what legal shell

You can change this later, and plenty of people do - a sole trader becoming a GmbH is a normal, well-trodden and slightly expensive afternoon. So do not spend a month here.

Which entity?

Einzelunternehmen (sole trader)

One person, starting out, and the work does not put anybody at physical or financial risk.

The registration fee, and nothing else.

You are personally liable without limit. You must also trade under your own first and last name - a brand name may be added, but the legal name has to appear on invoices and in the imprint.

GbR (partnership)

Two or more people, same conditions as above.

The registration fee per partner.

Each partner is liable for everything the others do. Write a partnership agreement even though the law does not make you - the default rules split everything equally and are silent about what happens when somebody leaves.

UG (haftungsbeschränkt)

You want limited liability and do not have €25,000. Nominally €1 of capital, in practice put in enough to cover the first year.

Notary and commercial register, roughly €300-800 to form, plus proper bookkeeping and annual accounts forever after.

You must retain a quarter of each year’s profit until you have accumulated â¬25,000 and can convert to a GmbH. Banks, landlords and some customers read "UG" as "thinly capitalised" and ask for a personal guarantee anyway, which puts your liability back where it started.

GmbH

Real liability exposure, outside investment, or partners who need shares that can be transferred.

€25,000 share capital, of which €12,500 must be paid in before registration; notary and register fees of roughly €600-1,000.

Double-entry bookkeeping and published annual accounts from day one. This is the point at which you stop doing your own books.

The sequence

Six things, of which two are appointments and the rest are forms. Steps 3 to 6 are largely triggered by step 2, so the thing to get right is the order of the first two.

Sort the things that are hard to undo
Takes: A week, mostly waiting for other people
Check the name is free before you print anything: the German trade mark register at DPMA and the EU register at EUIPO, plus a plain web search. A name that collides costs a rebrand and a cease-and-desist letter with a four-figure fee attached.
Check whether your trade needs a permit. Most do not, but hospitality, brokerage, security, personnel leasing, transport and the crafts trades all do, and the trade office will refuse the registration without it.
If you are leaving a job, tell your health insurer that you are about to become self-employed, and ask them in writing what your contribution will be.
Watch out: If you are a founder in the arts or media - including games, design, writing and music - check whether you qualify for the Künstlersozialkasse before you register anything else. It pays roughly half your health and pension contributions, the way an employer would, and people miss it because it is not mentioned anywhere in the trade registration process.
Register the trade (Gewerbeanmeldung)
Where: The Gewerbeamt, which in most cities is a counter inside the Bürgeramt or Ordnungsamt. Many federal states now take it online.Cost: €10-65 depending on the municipalityTakes: Twenty minutes, and the certificate is handed to you there
The form is called GewA 1. Bring photo ID, and proof of address if the office does not already have you registered there. That is the whole appointment.
You come away with the Gewerbeanmeldung certificate, which is what banks, insurers and marketplaces mean when they ask for proof of business.
This one form starts four other processes on its own: the tax office, the chamber of commerce, the statutory accident insurer and the statistical office are all notified. You do not need to contact any of them first.
Angemeldete Tätigkeit (the activity)
Describe what you do broadly, and list more than one thing. This text is what you are registered for, and adding an activity later means another appointment and another fee. Write "development and distribution of software, online services and digital media, advertising" rather than "game studio".
Beginn der Tätigkeit (start date)
The day you started, which may be in the past - back-dating by a few weeks is normal and expected. This is the date your tax year and your obligations start from, so do not put a future date to be tidy.
Haupt- oder Nebenerwerb
The fork from the section above. It is not binding forever, but it is what the chamber and your insurer will read.
Betriebsstätte (place of business)
Your home address is fine for most trades. Check your tenancy agreement, and be aware that this address becomes public through the imprint on your website.
Fill in the tax questionnaire (Fragebogen zur steuerlichen Erfassung)
Where: ELSTER, the tax authority’s online portal. Since 2021 this must be filed electronically - paper is no longer accepted.Takes: An hour to fill in, two to six weeks for the answer
The tax office sends this after the trade registration, or you can start it yourself in ELSTER. It is due within a month. You will need an ELSTER account, and the certificate for one arrives by post, so start that first - it is the slowest thing on this page.
This form is the most consequential piece of paper in the whole process. Four of its boxes are decisions rather than facts, and they are covered one by one below.
The answer is your Steuernummer: the tax number that must appear on every invoice you write.
Voraussichtlicher Umsatz und Gewinn (expected revenue and profit)
Your estimate for this year and next. It is not binding, but the tax office sets quarterly advance payments from it. Estimate honestly and slightly low: too high and you pay tax on money you have not earned yet, too low and you get a large correction plus new advance payments in the same month.
Kleinunternehmerregelung nach § 19 UStG
Whether you charge VAT. See the section below - this is the one to think about, and since 2025 it is also the one whose thresholds changed.
Soll- oder Istversteuerung
Whether you owe VAT when you send an invoice (Soll) or when the customer actually pays it (Ist). Ask for Istversteuerung if you are eligible. It is free, it is granted on request below a revenue threshold, and it means you are never funding a customer’s late payment out of your own pocket.
Umsatzsteuer-Identifikationsnummer (VAT ID)
Tick it. It is free, it takes one box, and you need it the moment you buy anything from another EU country - which includes almost every developer tool, and includes Stripe, whose European entity is Irish. Without it you pay foreign VAT you cannot reclaim.
SEPA-Lastschriftmandat (direct debit mandate)
Giving the tax office a direct debit. Worth doing: late payment carries automatic surcharges, and this is one fewer deadline to remember.
Watch out: Do not treat the estimate boxes as a formality. The most common first-year shock is not the tax bill but the quarterly advance payments the tax office sets on top of it after the first return.
Register with the statutory accident insurer (Berufsgenossenschaft)
Where: The Berufsgenossenschaft for your sector. For office, software, media and design work that is the VBG.Takes: A form, and one week from starting the business
This is compulsory and has a deadline of one week, and almost nobody knows about it because it is buried in the notifications the trade office sends. Registering is free; the contribution for a one-person office business is small.
Whether you personally are insured, as opposed to your future employees, depends on the insurer’s own rules - ask them directly.
Deal with the chamber (IHK or HWK)
Where: Your regional Industrie- und Handelskammer, or Handwerkskammer for the crafts tradesCost: Typically €30-70 a year for a small business, and often nothing at all in the first yearsTakes: Nothing - they contact you
Membership is compulsory for every trade in Germany. There is no opting out, and the letter will arrive whether you want it or not.
There is an exemption worth claiming: a business not entered in the commercial register, whose profit stays under the statutory threshold, pays no contribution for its first years of trading. It is not applied automatically - reply to their letter and ask.
Open a business account and set up invoicing
Takes: An afternoon
A sole trader is not legally required to have a separate account, but mixing private and business money makes the bookkeeping harder than the account fee ever saves. A UG or GmbH needs one before it can be formed at all, because the capital has to be paid into it.
Your invoices need the mandatory fields listed in § 14 UStG, which are covered in the shared invoicing chapter. Since 2025 every German business must be able to *receive* structured electronic invoices from other German businesses; the obligation to *send* them phases in from 2027, so what you need today is an email address that accepts them and software that can read one.

The VAT decision

This is the box people tick without reading, and it is the one that is genuinely a decision. The thresholds below are the ones that took effect in 2025 - guides still quoting €22,000 have not been updated.

Kleinunternehmer under § 19 UStG, or standard VAT?

Kleinunternehmer

Your turnover stayed under €25,000 last calendar year and will stay under €100,000 this one. In your first year there is no previous year, so only the current-year limit applies.

No VAT on your invoices, no VAT returns, much less bookkeeping.

You cannot reclaim the VAT on anything you buy - which hurts if you are buying hardware, paying for services, or spending more than you earn in year one. Your invoices must state that no VAT is charged and why. And if you cross €100,000 mid-year, the exemption ends immediately on the transaction that crosses it, not at the end of the year.

Standard VAT (Regelbesteuerung)

You sell mainly to other businesses, or you are spending heavily before you earn.

Monthly or quarterly VAT returns, and 19% on top of your prices.

Business customers do not care - they reclaim it. Consumers do, because to them it is a 19% price rise. If you sell to the public, this choice changes your price list.

Selling digital products to consumers in other EU countries?

Under €10,000 of EU cross-border sales a year

Starting out, most of your customers at home.

You may keep charging German VAT and ignore the rest. Watch the running total.

Over it

Your customers are spread across the EU.

VAT is owed where the *customer* is, at that country's rate, and you register once for the One-Stop-Shop and file a single quarterly return instead of registering in each country. Stripe Tax and similar services will compute the rates; the registration is still yours to do.

What it costs to start

Sole trader, one person, no permit needed. The recurring costs are the ones that matter.

What	Amount
GewerbeanmeldungOnce. Set by your municipality.	€10-65
Tax questionnaire and SteuernummerFree, via ELSTER.	€0
VAT IDOne box on the same form.	€0
BerufsgenossenschaftCompulsory. Free to register.	A low two-digit sum a year
Chamber of commerceExemption available for the first years - you have to ask.	€0-70 a year
Notary and commercial registerOnly for a UG or GmbH.	€300-1,000
Health insurance as a full-time self-employed personBy far the largest number on this page, and the one nobody budgets for. Ask your insurer before you start.	Several hundred a month
Tax adviser for the first annual returnOptional in year one, and usually worth it.	€400-1,500

The words on the forms

Kept in German, because these are the words you have to type into a search box or say at a counter.

Gewerbeanmeldung: Registering a trade, at the trade office. The certificate you get is the proof of business everybody asks for.
Gewerbeamt: The trade office. Usually a counter in the Bürgeramt or Ordnungsamt rather than a building of its own.
Finanzamt: The tax office. Which one is yours depends on your address.
ELSTER: The tax authority’s online portal. Every filing goes through it. The account certificate arrives by post, so start it early.
Fragebogen zur steuerlichen Erfassung: The tax questionnaire that follows registration. The most consequential form in the process.
Steuernummer: Your tax number. Must appear on every invoice.
Umsatzsteuer-Identifikationsnummer (USt-IdNr): The EU VAT ID, a different number from the above. Needed for buying and selling across EU borders.
Kleinunternehmerregelung: The small-business VAT exemption under § 19 UStG.
Umsatzsteuervoranmeldung: The periodic VAT return - monthly at first, then quarterly.
Einnahmenüberschussrechnung (EÜR): Cash-basis accounts: income minus expenses. What small businesses file instead of a balance sheet.
Gewerbesteuer: Trade tax, charged by your municipality. Sole traders have a €24,500 allowance and most of the rest is credited against income tax.
IHK: The chamber of commerce. Membership is compulsory for trades.
Berufsgenossenschaft: The statutory accident insurer for your sector. Registration is compulsory within a week.
Künstlersozialkasse (KSK): The social insurance fund for artists and publicists. It pays the employer’s half of your contributions if you qualify.
Handelsregister: The commercial register. Required for a UG or GmbH, optional for a sole trader.
Impressum: The legal disclosure every commercial website must carry. See the shared chapter.

The traps

Telling your health insurer late. Going full-time self-employed changes your contribution, and they will bill the difference back to the day you started.
Not checking the Künstlersozialkasse if you work in games, design, writing, music or media. It is worth roughly half your health and pension contributions and there is no reminder anywhere in the process.
Registering a single narrow activity at the trade office. Adding one later is another appointment and another fee.
Treating the expected-profit boxes on the tax questionnaire as guesswork. They set your advance payments.
Missing the one-week deadline for the accident insurer, which is not mentioned at the counter.
Paying the chamber of commerce contribution without asking for the first-years exemption.
Assuming the small-business VAT exemption lasts the year. Since 2025, crossing €100,000 ends it on the spot.
Running ads, a waiting list or a pre-order page before registering. The obligation starts when the activity does, not when you get round to the paperwork - and a page that sells needs a full imprint from its first day.
Losing money for several years with no plan to make any. The tax office can reclassify the whole thing as a hobby and take back the deductions.

Where to check this yourself

ELSTER - the tax portalWhere the questionnaire and every later filing is filed. Register first; the certificate comes by post.
Existenzgründungsportal (Federal Ministry for Economic Affairs)The government’s own founding portal. Dry, and correct.
Your local IHKFree founding advice, including a first appointment, which your compulsory membership pays for anyway.
DPMA - German trade mark registerCheck the name before you print it.
EUIPO - EU trade mark registerThe same check, EU-wide.
KünstlersozialkasseCheck whether you qualify before you register anything else.
Gesetze im Internet - UStG§ 19 is the small-business rule, § 14 the mandatory invoice fields.

This is a map, not legal or tax advice - and an honest one about how it was drawn: the Germany guide was written by a person who walked the route; most other countries were drafted with AI against the official sources and have not yet been walked by someone who did it. Laws change. Every guide carries the date it was last checked and the sources to check it yourself - and if you have been through one of these routes, your corrections are exactly what this handbook wants.