![\"paperwork\"](\"https:\/\/www.wlappe.com\/wp-content\/uploads\/2016\/06\/paperwork.jpg\")
<\/p>\n
The main problem is with people<\/b>, where and how should founders pay taxes, and how to hire people.<\/p>\n
The main rule is that you pay taxes where you live, meaning where you spend more than 365\/2+1 days. But also having a house in a place could be considered residency and in Germany when you register with the city (Anmeldung) you are in the system. Double tax agreements exist letting you divide your tax liability between countries, but that means more paperwork.<\/p>\n
Because of the different tax and social systems and especially because of the different health systems, you could get into trouble. Having health insurance in Germany is mandatory <\/b>and you have both public and private \u201cKrankenkasse\u201d with different services and prices. This is critical for foreigners to comply with, travel insurance doesn\u2019t count.<\/p>\n
For freelancers<\/b>, getting a tax number is easy, but you still have to pay for health insurance. Also it\u2019s very controlled and punished (at least theoretically) when a freelancer is not really freelance and is working full time for a company as a \u201cfalse\u201d employee. \u00a0It\u2019s not clear what happens when you mix countries and a foreign company hires a German freelancer and vice versa.<\/p>\n
As general ideas taxes are high, the control is effective, and the protection of workers is high<\/b>, making hiring quite expensive. On the other side the \u201cwellness\u201d system works (more or less).<\/p>\n
For existing companies<\/b>, creating a German<\/a> autonomous\/dependent branch is one of the most recommended options. The traditional GMBH (German LLC)<\/a> requires 25,000\u20ac share capital (at least 22,500 verifiably contributed in a bank account). A relatively new version \u201cklein Unternehmen\u201d, formally UG<\/a>, requires only 1\u20ac but you add 25% of yearly profits to a reserve until you accrue 25k. Some people would not consider a UG a \u201cserious\/formal\u201d company.<\/p>\n It\u2019s common that startups around Berlin are founded in UK or USA (Delaware) and that\u2019s not a problem. It\u2019s probably also not bad for international investors, but it could complicate getting things you would need from Germany, especially access to public support. There\u2019s also a complicated exit tax if you or your company leaves the country, I\u2019m not finding proper info, only some references<\/a> and news<\/a>.<\/p>\n There are grants <\/b>for new companies and supporting programs giving cheap credit that are focused on creating jobs (don\u2019t forget that Berlin has a high unemployment rate, but not in IT) and attracting talent and capital to the city. There are so many options but paperwork is necessary so my recommendation again is find someone to help you.<\/p>\n Try to find a good professional and consider all these topics from the very start. Bumps along the way are not going to destroy a good business but will have an impact on the profits of the company and cash flow.<\/p>\n From my Lean Startup perspective I recommend being focused on market and possibly investment.<\/b><\/p>\n <\/p>\n You can read more in: How to manage legal issues is one of the most common questions for new companies arriving in the city, and also one of the bigger fears. But for people who have already gone through the process, it was not a barrier and they remember it as a single step in the development of their business. […]<\/p>\n","protected":false},"author":2,"featured_media":2995,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126,121],"tags":[124],"class_list":["post-2994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-berlin","category-insights","tag-berlin"],"_links":{"self":[{"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/posts\/2994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/comments?post=2994"}],"version-history":[{"count":4,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/posts\/2994\/revisions"}],"predecessor-version":[{"id":3495,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/posts\/2994\/revisions\/3495"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/media\/2995"}],"wp:attachment":[{"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/media?parent=2994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/categories?post=2994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.wlappe.com\/en\/wp-json\/wp\/v2\/tags?post=2994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nDoing business in Berlin I<\/a>
\nDoing business in Berlin II: events and networking<\/a>
\nDoing business in Berlin III: coworking and accelerators<\/a>
\nDoing business in Berlin IV: market and trends<\/a>
\nDoing business in Berlin V: Incorporating in Germany<\/a>
\nDoing business in Berlin VI: Living here<\/a>
\nDoing business in Berlin VII: Salaries and taxes<\/a>
\nDoing business in Berlin VIII: Hiring in Berlin (and what to expect if you\u2019re looking for a job)<\/a>
\nDoing business in Berlin IX: final thoughts<\/a>
\nBrexit: an opportunity for Berlin to grow<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"