Opening your own business in Germany is not as difficult as it seems at first glance. Being your own boss, bringing ideas to life and working independently - there are many reasons why people choose to be self-employed. Every year more and more entrepreneurs take this step. We will tell you about the important steps of every entrepreneur in Germany.
We tell you where to find your tax number and how Steuer ID and Steuernummer differ in this article.
How to become Selbstständige. Important Steps
To be considered a Selbstständige in a professional context in Germany, the following conditions must be met:
- You are busy with your own activities
- You do not depend on other people's instructions
- You independently determine the time and place of your work
- You bear the business risk
Unlike hired employees, you are given the freedom to decide whether to accept orders and how to fulfill them. The main requirement is to achieve results and deliver them within the established time frame.
The path to self-employment
1. Business idea
A business idea always includes an economic aspect: how can you make money with a product or service? Is the idea good enough to get enough clients? The best business ideas solve a specific need and customers are willing to pay money for it.
2. Business model
The entrepreneur's job is to turn the initial abstract business idea into a full-fledged business model. Unlike a business idea, a business model already contains specific elements relating to all aspects of your enterprise such as:
- Business structure = Geschäftsstruktur (Einzelunternehmen, Partnerschaft...)
- What value will your business bring to customers = value proposition (describes the benefit and therefore value that customers or partners receive)
- Revenue Models = revenue model (NExamples of a company's revenue streams, such as e-commerce, include subscription fees, advertising revenue, sponsorships, and transaction revenue)
3. Business plan
A business plan is written for many reasons: it helps to assess the feasibility of your project, attract sponsors or business partners who will support you. In addition, a business plan helps monitor business development and make adjustments if necessary.
The financial plan is the central element of the business plan. It calculates how much money you will spend and when you will earn money, as well as when the break-even point will be reached. A financial plan shows how much capital will be required to create a business.
4. Financing
If the capital you need exceeds your savings, then you will need external capital. For these purposes, you can use traditional bank loans, which can be supplemented with subsidies at the state level, or you can find partners who, using their own funds, will increase the share in the capital, or attract investors who will participate in the profits.
6. Business registration
Once you have the necessary capital, you can start moving forward. In Germany, entrepreneurs are given freedom to choose their activities. If you are registered here and you turned 18, you have the right to create your own business. This process is not as complicated as it might seem. Often all you need to do is register your business with Finanzamt (see below for how to do this) and you are ready to get started.
However, there are exceptions. In some cases, certain activities require special qualifications or permits (Katalogberufe). To avoid bureaucratic complications and delays, give yourself time to familiarize yourself with the requirements in your industry.
Sometimes founders are required to provide documents confirming their reliability and financial solvency. These documents usually include a certificate of good conduct (Führungszeugnisse) and a certificate from the tax authorities allowing you to start working.
In some cases, it may be necessary to verify that the premises comply with legal requirements. This is usually done by public safety or building inspectors (in case of changes to the building).
Please check in advance if there are any specific requirements for you., what documents you will need to register your business and where you can get them. Pay attention to interactions with authorities and remember that this may incur additional costs.
Business registration in Gewerbeamt
If you have plans to create your own business, you need to register it with the appropriate commercial office at your place of residence. Fill out a short form and pay a small fee. Gewerbeamt will inform the tax office, the relevant chamber of commerce and other authorities related to the opening of your business (depending on your business idea, this could be, for example, the Health Authority, the Public Safety Authority or the Building Authority).
Registering a craft business (Handwerker*innen)
If you plan to start a craft business, you should first register with the Chamber of Crafts (Handwerkskammer). You will find a list of addresses on the official website. You can then register your activity in Gewerbeamt.
Registration of a free profession (Freiberufler*innen)
If you are going to engage in a freelance profession, you do not have to apply to the Trade Licensing Bureau. It is enough to inform the Finanzamt about your undertaking. This can be done by filling out the form (Fragebogen zur steuerlichen Erfassung)For example, online via Elster or at the Finanzamt. In the questionnaire, you will indicate your type of legal form, expected turnover and profit, and also specify whether you work full time (Haupttätigkeit) or have a part-time job (Nebentätigkeit).
Some legal forms require registration in a special register. For example, if you chose the form of limited liability company (the), after registering your company you need to register it in the commercial register. The same goes for all merchants. If you are creating a partnership (Kommanditgesellschaft, KG), it will also need to be registered in the partnership register.
After processing your data, the tax office will provide you with a tax number (tax number), which you must include on all invoices. And from now on you can officially be self-employed.
