Business in Germany for Russians: advantages, features, ideas, registration

Advantages of doing business in Germany

Compared to other EU countries, Germany's political and economic systems are the most stable.
Thanks to this, the country is considered one of the best in the European Union for running small and medium-sized businesses. Article navigation

• Why Germany?
• Low lending rates
• Highly qualified staff
• Cooperation with tax authorities
• Features of business in Germany
• Features of small businesses
• Promising business ideas in Germany
• Fast food place
• Salon
• Handmade
• Which business is the most profitable?
• Is it possible to start a business in Germany from scratch?
• Is it possible to get a loan for business development?
• How to open a business in Germany for a Russian
• Business planning in Germany
• Choosing a legal form of business
• Freiberufler: a completely new business system
• Taxation in Germany
• Company registration in Germany
• Basic documents for business registration
• Purchasing an existing business
• Which business is more profitable to buy?
• Business in Germany and residence permit
• German visa requirements
• Business immigration: what is needed for this?

Modern Germany is interesting for domestic entrepreneurs who are looking for a way to open a company in another country. Germany attracts businessmen from all over the world for a number of reasons. There are no restrictions regarding foreign capital, except for the company’s obligation to record all financial transactions with banks.

Obtaining a business visa

After permission to open a business has been received, you can go to the embassy to obtain a visa for a businessman. In addition to the standard passport, questionnaires, applications and photographs, he will need:

• Medical insurance for the duration of the trip
• A draft agreement on creating your own business, or the agreement itself, if it has already been drawn up, as well as 2 copies. In the latter case, an extract from the German trade register (Handelsregister) is also required, if one was carried out.
• Business plan and its copy
• Confirmation of the availability of financial guarantees for the implementation of the business plan, as well as for ensuring one’s own accommodation at the rate of at least 670 € per month with a copy, if we are talking about account statements.
• Diplomas, work history, biography and 2 copies each
• For businessmen over 45 years of age, they will also need a guarantee to provide for their own old age. This can be either the presence of a round sum in the account or the fact of owning expensive real estate in Germany. I can’t say what exactly will seem like a guarantee to the inspector. The law does not explicitly define this. So, again, it’s best to seek help from experienced consultants
• It is worth paying attention to the general conditions for obtaining a German visa

All documents are required in the original with translations into German. More information about the requirements for obtaining a business visa can be found on the website of the German embassy.

Typically, the owner of the company first receives a national visa for a period of 3 months. Upon arrival, he must find housing, take out state health insurance and take other necessary steps after arriving in Germany. He can then apply to the Office for Foreigners, where he will be issued a residence permit for a period of one to three years. After obtaining a residence permit, the spouse and children of the businessman are also entitled to obtain a visa due to family reunification. If, upon expiration of the visa, the entrepreneur still has the necessary financial and social guarantees for himself and his family, then he receives an indefinite visa, that is, permanent residence.

Very often, a visa is needed already in the process of opening a business in Germany. If the business as such does not yet exist, then obtaining a visa for the reason of running this very business is problematic. But it takes a lot of time to build an enterprise, register a company, and obtain all the necessary documents. For this case, there is a special visa (Geschäftsvisum), which is issued to an entrepreneur for a short period specifically for conducting business to open his own company in Germany.

Why Germany?

Anyone with capital and skills can open their own company in Germany. The country is attractive because of its favorable climate for the development of small and medium-sized businesses, government support, and the stability of its political and economic systems. Earnings in Germany are much higher than in other EU countries or Russia.

Low lending rates

If you have a positive credit history, you can count on receiving loans from German banks. The average rate here is 4%, which is much more profitable than in domestic financial institutions. Obtaining borrowed funds for a Russian business is usually impractical due to additional rates of Russian banks.

In Germany today you can get a loan for almost any type of business, including the service sector.

Highly qualified staff

The main feature of Germany is that it is customary to study a profession here. The Germans cannot imagine that a salesperson in a store can be without specialized education. An employee spends several years learning how to sell, studying the basics of legislation and even the psychology of sales.

In addition to rigorous training and high competition, it should also be noted that the best specialists from different parts of the European Union come to Germany. Despite this, highly qualified personnel in Berlin are cheaper than in Moscow.

Cooperation with tax authorities

Communication with the tax service and other government bodies takes place according to the American principle - in absentia. For the first three years, the business is not touched, so you can even file reports of a complete lack of profit. This won't surprise anyone here. But after a three-year period, the “assistance regime” on the part of the inspection authorities ends and all specified data will be carefully checked.

Other advantages of doing business in Germany include the following:

• the opportunity to sell your goods or offer services under the German brand;
• money invested in the company is considered foreign investment and is reliably protected by the state;
• possibility to return VAT;
• the right to use accounts in German banks, which are among the most reliable in the world;
• investors receive multiple annual business visas;
• the right to apply for grants and subsidies.

Features of business in Germany

Features of business in Germany for Russians may differ depending on the federal state.

For example, heavy industry and energy companies concentrated their activities in Vorpommern. Therefore, energy sources here are much cheaper.

In Germany, there are framework laws - general provisions for entrepreneurs. At the legislative level, business processes are regulated in general terms, and separate provisions are prescribed for each region.

It is impossible to single out the most attractive and popular business in Germany. It all depends on the type of activity that the entrepreneur prefers.

Every year, Bavaria attracts more and more business owners associated with advanced technologies and developments.

This division of regions into areas of activity is dictated not by the legislative framework or government policy, but by the traditions that existing companies have developed over many years. Traditions here are considered a more important criterion than legislation.

In the Russian Federation, the USA and some European countries there is the concept of a “special economic zone”. There is nothing like this in Germany. Before starting a business, you should definitely take into account the presence of an industrial tax in the country, which, depending on the federal state, can be 15–20%. Each business area pays a certain percentage.

Features of small businesses

Today, more than 600 thousand small enterprises are registered in Germany, which are engaged in a total of 97 types of activities. Almost a quarter focused their work on exports.

According to the Federal Ministry of Finance of Germany, as of 2017, the volume of investments in the development of small businesses in the country amounts to 51.5% of all financial injections into the country.

Such a wide spread and development of small and medium-sized businesses in Germany is dictated by a simplified registration system. The main indicator of this form of ownership is the company’s annual turnover, which does not exceed 250 thousand euros.

Today in Germany, immigrants from Serbia, Turkey, the Maghreb countries, Poland and Russia are providing various types of services. Expats can open small restaurants, dry cleaners, shops, etc.

This business situation suits the local population, since they themselves prefer to work in the field of information technology, chemistry and pharmacology, where a high intellectual level is needed.

Government support for small businesses

One of the features of small business in the country is the development of the innovation sector. Back in the second half of the last century, the government created a commission to stimulate technological development at the country's industrial chamber.

Already in the 90s, technology parks and state and national programs to support small companies were created. Today, there are benefits and subsidies for small innovative businesses throughout the country.

Any native resident of Germany who decides to try his hand at entrepreneurship has the right to receive a state loan of up to 50 thousand euros for 20 years. For the first two years, you can use the money for free, without any interest or commissions. But for the next 8 years it will be necessary to pay only interest - 4-5% per annum. The loan body must be repaid only from the 11th year.

Preferential taxation and government subsidies, as well as low prices for renting office space, make it possible to make costs for small businesses lower than those of large corporations.

That is why small firms that are part of a large holding have become attractive to Russian investors.

Advantages and popular specialties

Economic education in Germany covers many specialties. For example, enterprise economics is a popular field: students study taxes, marketing, management, accounting, and finance. Political economy unites a large block of economic disciplines relating to the public and private budget, and international economics.

Related disciplines such as economics + computer science are especially relevant today.

• Specialists in economic informatics are in high demand; the starting salary for specialists is from €3,000. They are involved in the implementation of corporate management systems and the use of IT technology.
• Another interesting direction: economics + mathematics. If a student dreams of working in a bank, then it is worth taking a closer look at this direction: the salary in this area starts from 3300 €. Beginning teachers in economics receive from 2500 €. The average salary of an experienced specialist is €5,000.
• However, the most popular specialty is engineering economics: it is related to mechanical engineering, information and communication technology, and project management. Salaries of specialists start from 4000 €.

The educational process includes lectures, practical classes and paid internships in the best German companies. Students often receive job offers even before graduation! Most universities offer education to foreign students only on a paid basis. Tuition fees largely depend on the university, location, and program.

Promising business ideas in Germany

Entrepreneurship in Germany is developing to a large extent thanks to foreign investors. It seems that the market is crowded with various goods and services, but an enterprising person will always find a promising niche.

Fast food place

This industry in Germany is developing at a tremendous pace. There is no need to open an elite restaurant with gourmet cuisine and dishes from the chef. The Germans prefer simple and satisfying food. For a small point, a couple of tables and minimal capital will be enough. Pancakes, sausages, sandwiches and sandwiches are the most popular dishes.

If you believe the statistics for the last few years, fast food outlets bring the biggest profits to German entrepreneurs. Among the main reasons are:

• in Germany, people try to get as much done as possible in a day, so they prefer snacking on the go;
• a huge part of the profit comes from tourists who save money and time to see more attractions;
• Germans love to eat: a couple of hearty snacks between main meals will not surprise anyone here.

Salon

This line of business is in great demand. Germans get their hair cut extremely often: on average, each client returns twice a month. It is possible to compete with local hairdressers, but you need to be a very qualified specialist. In Germany, devotion to one's master is a popular phenomenon.

Handmade

In recent years, interest in various handmade products has grown significantly. The direction is not important: knitted clothes, toys, wood carvings or oil paintings are all highly valued.

You can get big bucks for quality handmade jewelry. The only condition is uniqueness: the item being sold should not have any signs of mass production.

Which business is the most profitable?

In Germany today, the E-bay.de platform is extremely popular. In order to sell your products through it, you just need to open a bank account and register on the website. Users can also start their own store - the platform offers many free templates.

To work in this field, good knowledge of the language will not be enough. You will have to use the services of an experienced lawyer who will draw up a competent user agreement. German authorities take consumer rights seriously.

All documents must be in perfect order, otherwise it will not be possible to avoid a lawsuit. You should not evade taxes, as fines from fiscal authorities for undeclared work on this platform are common.

Another profitable area is body care. Gyms, swimming pools, massages and solariums are all in great demand among locals. Regardless of social status and income level, Germans pay close attention to body care. A well-groomed appearance for them is the main indicator of success. The Germans use all procedures on an ongoing basis.

You can start a small business in Germany with minimal knowledge of the language, but you must be a very good specialist. Costs depend on the level of services offered. If we are talking about an elite establishment, then substantial investments will be needed. It is best to choose premises located in areas with high traffic.

Is it possible to start a business in Germany from scratch?

Opening a business in Germany is much easier for Russians than in Austria or France. Foreign residents here have the same rights to start a small business as the indigenous population.

Government agencies approach any investment individually, taking into account the amount of funds invested, the strength of the business plan, prospects and other nuances.

The peculiarity of Germany is that here additional investments in the country’s economy are encouraged, so a foreigner always has the opportunity to receive benefits.

Promising areas of activity

It's difficult to talk about anything specific here.
If a person knows how to competently sell his product or service, he can quickly acquire regular customers. However, there are a number of areas of business activity that are developing very well in Germany. For example:

1. Real estate. There are two options here: resale or rental. In the first case, it is better to start construction from scratch or invest in houses under construction. In the second, the guarantee of success is the location of the facility, and the attractiveness of the area for tourists or guest workers.
2. Cosmetic services. The Germans are very particular about their appearance, which is why hairdressers, spa salons, fitness rooms, and massage parlors are developing well in the country. However, here you need to know that such activities are subject to mandatory licensing, and there is no place for specialists of dubious qualifications here.
3. Catering establishments. It is noteworthy, but in order to develop in this direction, you do not need to reinvent the wheel and attract customers with exotic dishes and big names. Germans prefer simple but tasty food. Therefore, small cafes offering visitors grilled chicken, sandwiches, pancakes and fried sausages are in demand. The main thing is not to forget to include beer in the assortment - this is the favorite drink of the burghers.
4. Hand-made products. Products from the handmade category are in demand in Germany. Therefore, you can open a small workshop, offering clients paintings, wood carvings, wicker weaving, etc. There will be a demand for such goods, but the number of clients and the cost depend solely on the talent of the master.

Read also: How to get a child’s passport

Is it possible to get a loan for business development?

The decrease in interest rates on the euro has led to the fact that borrowed funds for business development are issued at 3–4% per annum. If you take into account the twenty-year loan term and the fact that borrowers do not pay on it for the first few years, then the conditions are quite attractive.

Russian businessmen can also apply for a loan, but it will be difficult to go all the way. When trying to obtain borrowed funds from a German bank, you should consider the following points:

• As in other countries, to obtain a loan you need to convince the banker of your solvency. The team that will run the business is important. It is after studying it that the bank employee will make a decision. It is best if the company's management includes highly qualified local residents.
• Germans don't take their word for it, so all aspects of a presentation must be supported by documentation. If you plan to sell certain products, you can confirm the prospects of the business with pre-orders.
• The originality of the idea is not important for bankers. You just need to make the presentation in such a way that he can understand the prospects of the project.
• The industry is very important. Banks constantly monitor the economic situation in the country. And if there is a decline in a certain industry and businesses close, then getting a loan will become impossible.
• Having your own property. The more real estate and other assets a business owner has in Germany, the higher the chances of obtaining borrowed funds.

In any case, the process of attracting credit funds in Germany requires time and patience. There is no need to rush, as a financial institution may perceive this circumstance as an unfavorable signal and refuse to issue a loan.

Business Migration Application Approval Process

In each specific case, you first need to request that German officials conduct a check to determine whether the business of a private entrepreneur corresponds to regional interests or the current economic situation. Therefore, it is worth deciding on a specific location to open your business as early as possible. Different cities may have different needs, so it makes sense to either try your luck in several places, or contact business migration specialists who can recommend the most suitable region based on their experience.

You will have to convince officials in Germany with realistic demonstrations of your own competence and competitiveness. The Germans are very sensitive to the education and work experience of a businessman. If a person has had success in business in his homeland, has received a specialized or related education and a fair amount of experience, then he will have a much greater chance of a positive decision. It would be useful to obtain an audit report on the reality of the business plan in some international company. Although such a review will cost a lot of money, it will certainly not be in vain, because it will be very difficult for local German bureaucrats to refute the conclusions of authoritative experts.

But it is worth noting that all bureaucratic procedures will be carried out without delay and with the full assistance of officials. Therefore, more information needs to be obtained directly on the spot by communicating with employees of business registration institutions. Germany needs businessmen because they create much-needed jobs. No one will deliberately create obstacles. Moreover, you can get a lot of support for starting a business. Under certain conditions in certain regions, you can fall under the development programs of a particular industry. Of course, even here you cannot do without the services of specialists with knowledge of the German market.

How to open a business in Germany for a Russian

According to the World Bank ranking, Germany ranks 14th in the world in terms of attractiveness of doing business. The country managed to form a business image thanks to a strong economy and a transparent legal system.

Business planning in Germany

In order to calculate the economic efficiency of an investment project and obtain borrowed funds from a bank, it is necessary to provide a business plan for the future company.

While locals need a business plan to attract investment, migrants must prepare it before receiving a visa. What exactly is a business plan for?

1. Migrants must submit it to government authorities in order to obtain permission to engage in entrepreneurial activity. Without this document, you don’t even have to try to contact the embassy regarding immigration.
2. When registering a company in Germany, you can seek help from the state to obtain borrowed funds or benefits, but this cannot be done without a clear description of the business, its specifics and features.
3. When it comes to finding investors or other forms of financing, then a serious and thoroughly prepared business plan is needed.

A well-written business plan should include:

• overview section;
• description of the goals and objectives of the project;
• description of the company itself, products (services) that are offered;
• market analysis and project prospects;
• production plan;
• financial plan, payback period, etc.

Choosing a legal form of business

One of the reasons why Germany is attractive for foreign investment and doing business is the variety of organizational and legal forms for registering a company. Thanks to this, a foreign investor can choose the best option for his business.

According to the Civil Code, both individual enterprises and partnerships created on the basis of personal or equity participation operate in Germany.

Individual enterprise

An individual enterprise is an enterprise that is not a company with capital participation, but involves the presence of one individual. Individual entrepreneur in Germany is the simplest organizational and legal form.

An individual entrepreneur is created from the moment of notification of the Gewerbeamt civil service. It should be noted that in order to register an individual enterprise in some industries, you must obtain permission.

When engaging in commercial activities, an individual entrepreneur must be registered in the trade register.

Civil Law Society (CLS)

A GPO is an ordinary partnership and is considered the best option for uniting two or more persons to carry out business activities.

The GPO is not subject to registration in the trade register and cannot use a company name, therefore it is identified by the names of the participants. Obligations are fulfilled not only at the expense of the company’s property, but also at the expense of each member’s own assets.

A civil society is not a legal entity, and there is no minimum authorized capital.

Open trading society

An open trade company is an association of two or more persons to conduct business under a common company name. Participants in the association can be both individuals and legal entities. There is also no minimum authorized capital established for this type of company.

Participants bear full responsibility for its debts to clients and government agencies. The creditor can collect the debt from all or from one member.

Limited partnership (LP)

A limited partnership is a form of association of individuals and legal entities, which includes at least one full and one limited member - a limited partner. The latter is liable only within the framework of the contribution to the authorized capital. The number of members is not limited.

Limited partners do not take part in the conduct of the affairs of the partnership, unless otherwise stated in the charter. CT is a type of open trading company and is therefore subject to the same rules.

Partnership

Partnership involves the union of two or more persons of liberal professions. These could be doctors, lawyers, artists, journalists, teachers, etc. To create a Partnership, you need to sign an agreement and make entries in the register.

Participants can only be individuals belonging to liberal professions. Partners bear joint liability.

Limited Liability Company

German LLCs are the most popular organizational and legal form for opening a company. According to German law, an LLC is an individual legal entity with its own name. In addition, the company has a certain list of rights and is liable for obligations only with its property.

A GmbH can be founded by one or several persons (individuals or legal entities). Moreover, even foreign companies may be among the founders.

The minimum authorized capital is 25 thousand euros. Contributions to the authorized capital can be not only money, but also securities, property rights, etc.

Joint-Stock Company

A joint stock company provides two main advantages:

1. Free movement of shares.
2. Shares may be listed for sale on a stock exchange.

A joint stock company can be formed by any person, and its charter is certified by a notary. The minimum share capital is EUR 50,000. The authorized capital of a joint-stock company is divided into shares with a par value of at least 1 euro.

The JSC can begin its activities immediately after registration in the commercial register.

European Stock Company (SE)

SE is an organizational form of an enterprise that carries out or plans to carry out business activities in the territory of the EU countries. There are several ways to form an SE: creating a parent company, merging a joint stock company in two or more EU countries, and also through transforming a national joint stock company into an SE. In the latter case, the head office in Germany must have a subsidiary in another EU country for two or more years.

SEs can create not only joint stock companies, but also limited liability companies.

Where to begin

It is worth noting from the outset that indirectly there are no restrictions or differences between citizens and foreign residents for starting a business. But as practice shows, it is much easier for foreign citizens permanently residing in Germany and residents of this country to open an enterprise of any form.

According to the law, a foreigner also has the right to open a business of any legal form. But often foreigners opt for a joint stock company or a limited liability company. https://www.youtube.com/embed/RMnirCimE6A Initially, a potential businessman must decide on the legal form of the future enterprise. In Germany you can open an organization of the following forms:

• Aktiengesellschaft Corporation (AG). According to the law, the minimum authorized capital for such a company is 50 thousand euros. The corporation's shares can be traded on the stock exchange. But this is not a prerequisite.

A corporation must appoint a head of the board (president). But all decisions regarding the management of the community can only be made collectively by all shareholders of the corporation. This means that the appointment and main operations are managed by the shareholders. And the president of the corporation only controls and resolves all issues regarding work processes in the company.

• Limited liability company "Gesellschaft mit beschränkter Haftung" (GmbH). This legal form is popular among foreign citizens. The main advantage of a GmbH is that shareholders are not responsible for the company's debt. One or more people can open an enterprise of this form. The minimum amount of authorized capital is 25 thousand euros.

The main condition of GmbH is that the company's shares cannot be traded on the stock exchange. Shares can only be transferred by a notary. This means that selling the company's shares on the stock exchange is prohibited.

• General partnership "Offene Handelsgesellschaft" (OHG). This form of doing business provides for unlimited liability. This means that if the OHG company does not have enough funds to pay the debt, the necessary funds can be withdrawn from the personal assets of the founders.
• Limited partnership "Kommanditgesellschaft" (KG). This form is a partnership company where only the general partner has unlimited liability.

• GmbH & Co. KG. This form implies the merger of a limited partnership with an LLC.
• Subsidiary company (Töchtergesellschaft). Such an organization can be called one of the large branches of a joint stock company. That is why this form is characterized by only partial independence. It is indirectly subordinate to the joint stock company, but at the same time the subsidiary company has its own charter, management and accounting department.
• Branch (Zweigniederlassung).

Taxation in Germany

The basic principle of taxation in Germany is as follows: the amount of fees must correspond to the amount of services provided by the state.

As of January 1, 2021, there were 45 types of tax in Germany, including taxes for dog owners, sparkling wines, coffee, beer, hunting, etc. The main types of taxes are as follows:

Taxes in Germany for small businesses are more lenient than in other EU countries. On January 1, 2015, tax benefits were introduced for start-up entrepreneurs: instead of a rate of 15%, they can pay 12 or 9%.

The taxation of general partnerships and companies does not provide any benefits from the first day of their existence.

Company registration in Germany

In order to open a company in Germany, you need to sign and apostille a power of attorney. If the owner also plans to hold the post of director of the company, then he needs to submit documents personally.

Basic documents for business registration

To register a company in Germany, you will need the following documents and information:

• Information about the founder and director of the company: full name, date of birth, place of registration, passport numbers and copies thereof.
• If the founders are legal entities, then statutory documents and a decision of the board of directors on the creation of an enterprise abroad will be needed.
• Data on the amount of authorized capital.
• Company name. Several options can be provided.
• List of activities that are planned to be carried out.
• Document confirming payment of the authorized capital.

The registration period is 4–8 weeks, depending on the land and the speed of the registration authority.

Purchasing an existing business

Before buying a business in Germany, you should decide for what purposes you need it: making a profit by investing or for a residence permit. You should buy a company after a thorough check of its activities over the last three years: balance sheet, whether taxes have been paid, whether there are any problems with government agencies, the condition of the real estate owned by the company.

Which business is more profitable to buy?

Real estate is considered the most promising area in Germany, so it is recommended to buy companies in this industry. Other profitable businesses include:

• small cafes and restaurants built on the fast food principle;
• grocery stores and shopping centers;
• hairdressing and beauty salons.

Are there any business restrictions for foreigners?

Russian citizens who have started a business in Germany or entered into a partnership have the right to work under the same conditions as native residents. You just need to take into account the peculiarities of doing business in the country, follow the rules and laws. It is also worth considering that work in a number of areas requires obtaining additional permits and licenses. This list includes: restaurant business, transportation of goods or passengers, accounting services, circulation of medicines and weapons.

Business in Germany and residence permit

You can obtain a residence permit through business emigration to Germany in the following cases:

• an existing business in Russia is transferred to the country or a subsidiary is created in Germany;
• a new company is opened as a separate business within the existing business;
• creation of a new company;
• purchase of a share in an existing German company;
• other methods related to the establishment or purchase of commercial enterprises in the country.

German visa requirements

To obtain a business visa you will need the following documents:

• international passport;
• 2 photos;
• insurance;
• A completed application form;
• copy of internal passport;
• invitation from business partners;
• a copy of the inviting person’s passport;
• copies of property documents (optional).