Germany is among the most developed countries in the world. That’s why more and more Poles are choosing to register a company and make real money. It so happens that the lack of knowledge of the German language, as well as the lack of knowledge of tax law, accounting and many other regulations, is a limitation.
Basic rules of doing business in Germany
Not knowing the basic rules of doing business in Germany , despite the fact that since 2011 the German market has been completely opened to foreign entrepreneurs from countries belonging to the European Union, we can ask for help from consulting companies that operate in the German market. The most popular and very common is the sole proprietorship known as the “one-man business”. Gewerbe.
Sole proprietorship in Germany – Gewerbe
The main advantage of Gewerbe is that no initial capital is required to establish it. In the case of Gewerbe, registration in the business register is required. When setting up Gewebe, we must remember that the principle of liability of the entrepreneur even with his own property applies here.
This type of business, or rather form of business is suitable for individuals who provide highly specialized work, services themselves. This type of business is commonly chosen, especially by Poles, as it does not require initial capital. When it comes to a sole proprietorship, the principle of personal liability of the entrepreneur applies here, even with his own assets.
Civil partnership in Germany – GbR
Another form of business in Germany is the Civil Company GbR. This type of company is reserved for at least two people.
The right to operate such a company is given to all partners. The big downside of such a company is higher business tax. The tax-free amount is the same as for business. However, if in a civil partnership the annual turnover exceeds the amount of 600 thousand euros (or income of 50 thousand) then the obligation to balance arises.
How is profit divided in a civil company in Germany – GbR?
When there is a profit in the company it is divided among the partners. If the contract does not specify this, the profit is shared equally. The same is done if a loss occurs. Moreover, this type of business is a common choice as far as Poles are concerned, since it does not require initial capital.
To sum up, in Germany we can talk about the existence of the following legal companies:
– GmbH company
– limited liability company. UG (Unternehmergesellschaft)
– joint-stock company AG
– limited partnership KG
– limited joint-stock partnership KgaA
– general partnership OHG
– partnership (Partnerschaft)
When setting up any of these companies, pay attention to the following elements that characterize the German tax system:
– local business tax
– solidarity tax
– VAT
– customs duties
German accounting system vs. company size
When starting a business in Germany, it is important to remember that there is no obligation to maintain an accounting plan in Germany.
It is the company doing business itself that decides on the form, currency and language. A feature of the German tax system is that small companies are required to prepare financial statements within six months of the end of the fiscal year. Large and medium-sized companies are required to complete financial statements within three months of the end of the fiscal year.
Doing business in Germany – accounting and tax obligations
Taking all these elements into account, we can point out that doing business in Germany involves many accounting and tax obligations. Accounting, in particular, is a legal requirement and must therefore be approached in an extremely responsible manner. The accounting system in Germany has similarities and differences with the Polish system, and if we see that we will have problems with bookkeeping, it is best to outsource these activities to professionals in this field. We will pay for the service, but it is certainly an excellent solution from struggling alone in the maze of unfamiliar German regulations. In conclusion, Germany is a favorable country for Polish entrepreneurs and therefore it is worthwhile to be among the companies that will establish a new company or a branch of a Polish company there.
