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Create An English Ltd. or German Gmbh. ?

http://www.berklix.org/mecc/ltd_gmbh.html

Dates in Reverse Chronological order

  • 2011 or earlier: A web search provides various proxy services eg: EAC Business Services
    • Nominee Director UK 150.00
    • Nominee Secretary UK 49 pounds
    • Registered Office UK 49.00
    • Full Company secretarial service ( Inc Registered Office,
    • Nominee Director & Nominee Secretary ) 199.00
    2008.11.01 : Cheap German Mini Companies: 1 Euro Modernisierung des Rechts der GmbH
    • GmbH-Reform Am 1. November ist die lange erwartete GmbH-Reform in Kraft getreten. Ziel ist es, die Rechtsform der GmbH international wettbewerbsfähigher zu machen. Insbesondere soll die Gründung erleichert und beschleunigt werden. Existenzgründer sollen nunmehr - entsprechend der Forderung der IHK-Organisation - die Wahl haben zwischen der Unternehmergesellschaft (haftungsbeschränkt) mit flexiblem Stammkapital oder der GmbH mit einem Mindestkapital von 25.000 Euro. Statt Mustersatzung wird es ein vereinfachtes Gründungsverfahren mit erheblich geringeren Kosten geben, soweit nur bis zu drei Gesellschafter an der Gründung beteiligt sind: das notarielle Gründungsprotokoll. Über diese und weitere Änderungen des GmbH-Rechts, zum Beispiel die Unternehmergesellschaft (UG) oder 'Mini-GmbH', informiert Sie unser Merkblatt..
    • PS I suspect 25,000 Euro incorrect ?, I think limit was 50,000 DM, mapped to 25,000 Euro, then got reduced to 12,500 Euro maybe summer of 2007 ?
    • Der komplette Gesetzentwurf ist im Internet unter www.bmj.de zu finden.
  • 10 Nov 2008: OLG München, Urteil vom 30. Oktober 2008 - 8 U 1941/08: (Off topic for this page:) German law: A customer cannot refuse to pay at all, just because not all was delivered Bei einem fehlerhaft erstellten Softwareprodukt mag zwar wegen zweier fehlender Module eine Reduzierung des Werklohnes angezeigt sein. Das Ausbleiben jeglicher Zahlung seitens der Bestellers stellt jedoch mangelnde Vertragstreue dar, die jedenfalls gemäß § 242 BGB das Rücktrittsrecht ausschließt.
  • 2008.07.01: As of 1.7.2008 German lawyers are now allowed to negotiate flexible fees/ (& perhaps fees contingent on winning)
  • 2008.07: Recently UK companies house relaxed regulations: Far as I know, one can now have single director companies, & no need for that director to be UK resident.

Factual Corrections Encouraged.

Preamble - You Want To Start A Company ?
Welcome To Competition, Risk, Aggression, Trouble, & Expense !

There's probably lots of pages encouraging you to set up a Ltd or Gmbh. Perhaps you don't want to trust the bland commercially biased puff pieces, & want to be aware of & consider some risks yourself ? This page warns you of some problems. This author will not make a penny either away, whether you go ahead or get scared off. I guess that's impartial ? This author appreciates any factual corrections to this draft page, which is new & perhaps wrong or sparse in places. If you form a Ltd or Gmbh you are preparing for the world as a combat zone: You are preparing to denying others the right to claim full damages when you screw up badly. A nation's `defensive precautions' whether military, economic, import tarif, or attempted exporting of local `social conditions' to competitors, is often perceived by another nation as aggression. You may see your plans as defensive, but consider how you as a creditor may perceive the liability limitation of some other Ltd/Gmbh that goes belly up leaving you financially screwed ! Corporate Business is more aggressive than life as an employee or contractor technologist front ended through a jobs agency.

Companies compete commercially, & nations are in competition too, (though some in governments seem often too myopic to realise that they are in international competition), certainly for highly mobile IT sector business competition is real (eg Siemens's Munich's `internal software house' is in Bangalore, India!); civil servants obstruct or fine, the patent professionals predate on our industry, & lawyers abound rather as mercenaries did in the past, ready to help or hinder or prepare for a coming fight, dependent on who's paymaster, & then there's the occasional person looking for a bribe or embezzlement (Ugh!), & free-loaders & pirates etc. So do you Want to also be in Corporate Business, distracted part of the time from your fun technology where you'r highly competent, to a more scarey & exciting world of Corporate Business, where others are already expert ? (Remember the Chinese curse: "May you live in interesting times"). Welcome To Business ! ... Beware all who enter !

So You Still Want To Form A Company ?

OK, Read on, but ...
I'm not paid to write this. I'm not require to be polite or diplomatic or pander to people's often un-informed or nationally blinkered sensitivities. I've seen things where Germany could reduce its obstruction to business, & I'll mention some. (Equally I'm sure a foreigner in Britain might spot room for business improvement, but that doesn't excuse Germany's many obstructions.) Perhaps enhanced insight may combat a national complacency that knows no better; sometime it takes a fresh eye to spot the problems. The sooner that more locals learn business doesn't Have to be so obstructed, the sooner they can push Government & society to remove German obstructions to business.

Someone asked on MECC mail list in 06.2004

  • I just had a look around on www.go-limited.de which looks pretty good at first glance as an alternative to a GMBH here in Germany.
  • I was actually just about to set up a GMBH within the next couple of months but now I'm torn. Before I head off to talk to an accountant I would like to know your opinion on this.
  • Does anyone know whether there is any major drawback such as difficulty finding an accountant, increased bookkeeping overhead, or hidden expenses, etc ...
  • Does anyone know whether there is any major drawback such as difficulty finding an accountant, increased bookkeeping overhead, or hidden expenses, etc ...

Rephrase The Question

Invert the question, assume a UK default company base, & one could equally ask: "Are there hidden costs setting up a German company ?" The difference just depends if the questioner is British or German. Most nationals of any country won't have much more than a superficial knowledge of corporate creation & administration even in their own country, let alone another country in another language, so the question is ...

"What do MECC people know about costs & benefits of British Ltd & German GmbH ?

English Speaking Companies

This author formed an English Ltd Co. in '86, I set it up in England 'cos I couldn't read German properly at the time. I could have set up in any English speaking location, some of which are what people sometime like to call "very tax efficient", such as Panama or the Virgin Isles etc too, One use to find adverts for such things in the back pages of the UK's Private Eye magazine. I wasn't looking to be so `creative' ;-) I haven't looked at http://www.go-limited.de , however, they'll presumably they have some financial incentive in Germans setting up UK Ltds, so can't be expected to be neutral ? However I have heard from presumably neutral sources that the UK offers a better deal.

Probably the public of many countries think they've got the worst bureaucrats with their own fellow nationals being an obstruction to them. I have lived & work in both Britain & Germany a long time, I am of the opinion that one is better off avoiding German bureaucrats. Hence I'd suggest forming a Ltd, not a GmbH, on the simple premise of avoiding German Bureaucrats whenever possible.

( In numerous discussions with Americans I've also come to the conclusion America probably has less obstructions to (& more incentives to & for) business than either Britain or Germany. Perhaps the newly reconstructed emerging countries of Eastern Europe, just into the European Union this June , might be where there's least obstruction to business (purely guessing, let me know if true / false) )

Gmbh: An friend (Irish) set up a German Gmbh a few years back, I believe because his bilingual (German & English) wife was going to run it in Germany, & she had studied German not English business administration. so the German system would be more familiar. I have never heard of any of us doing a rigorous cost / benefit comparison of which is / was best (& the balance may change with time ).

A MECC member here in Germany has heard for GmbH you also have to pay "Sozialversicherung". Wouldn't surprise me.

Resident Directors

UK Ltd.: One is required to have a UK resident Director, (might be problematic: relatives &/or friends may get tired & be less keen to continue).

German Gmbh I don't know. Do you know ?

Austrian Gmbh I don't know. Do you know ? (~ 1.5hrs down motorway from Munich, also speak German)

UK Ltd: Who Does The Books ?

If the UK Inland Revenue agree you'r a simple company , well behaved & mainly / or better solely trading abroad, they're usually prepared to waive their right to demand a UK Chartered Accountant certified annual tax return, at which point the small accountant down the road (or your business savvy relative / friends or you yourself ) can do the books, & it's cheaper to run.

Ltd.:A German accountant might advise against: he might see no revenue for himself in a UK accounted company ? Though I suppose if he & his book keeper are comfortable also working in English, & if the UK Inland Revenue doesn't require a UK Chartered Accountant & if you happen to think your German personal accountant is good value for money I guess he could prepare it for you.

Requirement To Register Foreign Operation

My German steuerberaters told me if a foreign ie British etc company, has a director resident in Germany, then it has a German base & must register its operation here too (that doesn't mean form a Gmbh too, but does mean filling out forms in German). However that might be avoidable, legally or otherwise, I wouldn't know. I did know an outfit in North Munich that 10 years ago, had apparently been trading for years unregistered. How close to the wind they sailed I can only guess, but the man in charge was a nasty character I have reason to distrust.

Join Free & Learn

Join our MECC mail list & Stammtisch to exchange info. We have at least:
  • Two German nationals who run German GmbHs,
  • A Brit with a UK Ltd,
  • An Irishman with a German GmbH,
  • An Irishman who ran a Ltd in Eire (Eire of course being similar legal system to UK, but independent of UK since early 20th century,
  • A Brit who has recent knowledge on sole trading including supply of hardware (& Manufacturing tax.
  • An Austrian & at least one American who may have varied perspectives on personal tax issues.
  • Sundry others whose tech. & company knowledge you'll never know unless you come join us smiley face

Language & Bureaucracy

  • A British company can be formed to run in English or Welsh language.
  • I imagine an Irish company can run in English or Irish.
  • I imagine a German company just runs in German language.
  • Not heard of anything European yet, in regard to company formation, it's probably some decades yet before that'll be possible.
  • Perhaps a UK company may be less bloated & loaded with bureaucracy & tax/income prediction rules etc than a German one ? Perception of that may depend on ones' nationality & upbringing, or on the facts ? ;-) I know no one who has personal comparative experience of running one of each. I'd be interested to hear.

Annual Fees

  • Filing Fees

    Look it up yourself

    • UK Companies House
      They do a nice series of free plain simple english booklets, well worth reading. Authoritative too, unlike both information I've put on this page or Germans put on German language pages about British companies, any of which might be wrong.
    • Germany ? Someone send me a URL please
  • Accountancy Fees: How long is a piece of string ? ie may depend on turnover & transactions. UK accountants used to be damn expensive, more so than German, surprisingly, (surprising as contractors used to earn more in Germany than Britain, & Germans generally charge higher service fees in general than Brits (eg house sale in UK: 2.5 to 3% seller only, against several percent each side in Germany, one of many service fee examples).
  • Beware International accountants: The person you talk to may just be an accountant of nationally limited experience, working for an prestigious internationally known group of accountants, thus more expensive for no real benefit. Very different from someone who actually personally understands 2 tax systems that would be worth paying more for.
    A renowned accountancy firm I know of were expensive & useless when I talked to them in '85 / '86 or so. They just kept telling me they could find out about UK & get back to me (read: establish a business relationship with me & start billing heavily) , & I kept answering that would be a waste of time as I already knew whatever in UK, or my father did, who was a businessman. & I already had a German steuerberater, so that I did Not want them to do any research for me, all I was looking for from this international firm, was indication of pre-knowledge of Both German & UK systems, prior to decision to purchase a little advice on cross border tax optimisation. They were thus no damn use, but wrote me a big hourly bill for first lengthy introductory meeting, despite I'd kept trying to cut them short, & told them repeatedly that this was just an initial first meeting to see if they could be of use to me, & I would only engage them if they would be of use. - Hence Beware !
  • Beware also any German firm, particularly German lawyers, where the secretary shoves a form under your nose to sign (in German of course) authorising their firm to do christ knows what on your behalf, (including by implication billing you), before you ever meet her boss to decide if he's the right person for your business. It's just another tedious off putting part of German business life. Refuse until you met your lawyer. Just as he'd refuse until after he'd met his computer consultant ! (No apology for the `he' & `she' BTW: It Could be the other way round, but I've never yet met a male secretary in a female lawyers office, though they doubtless exist other places).

Tax Prediction

In Germany (a GmbH owner reports):
The Finanzamt will use your annual tax declaration to estimate your turnover/income for the following year, and then ask advance payment for the expected taxes. ... The amount is split into smaller (usually quarterly) parts. ... If you have a very good year, and the following year is not as good, the estimates are too high. But in this case you can ask for reduction, and from what I've seen myself and what I heard from others this has never been a problem.
One does not need to predict future income for either a German or UK company. In UK one can pay tax at end of year, after you know what you've earned (or more accurately, what you've invoiced for, (so you might not want to invoice near end of year if customer's wont likely pay till next year).

Credibility & Capitalisation

This section to be split into 2: Formal Capitalisation Liability & Practical Credibility
Some say a German GmbH has more credence, with an initial capitalisation of 25,000 Euro, there's some partial truth to that, but perhaps less than some believe: Initial UK capitalisation can be as little as 2 or 3 pounds, with liability I recall to pay 100 pound minimum though, if things go belly up (&/or maybe requirement to hold a meeting to authorise extension of share holding capital beyond 100). (I can't remember exactly, it's been a _long_ time )

Truth doesn't matter here as much as what people believe. A GmbH (even if run by a single person) is sometimes more trustworthy than a bigger company which is not a GmbH or AG.

I'd heard that in Germany the 25,000 Euro can on occasion, after the initial showing to register, be rapidly removed again. (Perhaps by discovering or doing work to merit consultancy or other bills to pay I had guessed. ). I had also heard that you only maybe need show half ? &/or can borrow some from bank. This seemed to have been rather garbled/ misinformed/ or possibly from dodgy backgrounds, where perhaps things may not have run correctly.

Two owners of different GmbHs wrote to MECC mail list in 2004:

  • Borrowing for the capital is not legal, especially not from a bank.
  • You don't have to keep the ``Grundkapital'' (minimum 25,000 Euro) locked up in a bank account, it can also be invested in company assets. But if the sum of assets and money drops below the registered amount of the GmbH, the company is required to file bankruptcy ... otherwise, this is a criminal offence and the limitation of liability is void. Not every AG has to be publicly traded, there is also the ``Ich AG'' which is supposed to be manageable even for individuals or small companies (I've never researched about that topic, though).

Many people in both Britain & Germany give Ltd & Gmbh undue credence. Some of those may include people we know: technologically clever employee engineers in major engineering firms, but folks who may not know much about business law. As consultants, perhaps we don't want to scare customers, so should just leave perceptions undisturbed, but in reality small firms can be less safe than individuals, or partnerships. Remember exactly what the titles Ltd & Gmbh says: A small(*) firm who have Legally Limited Their Liability to pay their creditors if they screw up badly ! (*) Usually small, but not necessarily: a stock exchange listed firm such as Plc must however have much greater minimal capitalisation & live to much more stringent accountancy standards etc. An AG = AktienGesellschaft = firm with shares (though it might be just an "Ich AG" - I don't know anything about them. Ask the Arbeitsamt

Often enough if I trouble to explain about `Ltd' & `GmbH' properly to someone, customer or otherwise, their whole financial perception changes, & they're quite grateful, & more relaxed dealing with smaller companies, or individuals, once they know you'r stable & not going away. smiley face

As a creditor, you'r sometime safer trusting an unlimited liability person or partnership if some have got personal assets &/or capital: there if something goes wrong, if it's eg an unlimited partnership, & one screws up really badly, you can sue 'em all into bankruptcy, & collect the assets. I knew a German girl whose father was an architect: I think the fellow architect of her father was the one who'd screwed up somehow, but her father ended up losing their house, worth far more than some paltry 25,000 Euro capitalised GmbH. A one or two man firm can thus be of far more worth than a `real' company ! Ask yourself what your assets are worth: got a nice car ? a part paid flat or house ? Then you as a sole trader can be considered more financially stable than some Ltd or GmbH. This reality is proven by the fact that that banks (at least in Britain, don't know about Germany) try to make loans to companies, secured on personal guarantees from the company directors. Ditto for UK landlords seeking security for leasing properties for start up computer companies. ( People tried that one on me back in 1983 for a new company start up - No Way ! ) German Situation on that I don't know. Do you know ?

Directors of UK Ltd companies are increasingly being burdened by new laws, with personal responsibilities they cannot shirk & palm off on the company. Can't remember them all, but some are eg a Director responsible for poor safety when someone gets injured, can be personally liable, (financially &/or tossed in jail!) not just the Ltd financial liability as in old days. I guess German law may be evolving in same direction ? So far so good, but I think it goes a lot further. Read the leaflet called (from memory) "Responsibilities of Directors" from UK Companies House German situation ? I don't know. Do you know ?

Tax Balancing

Load balancing: UK personal tax is to April ( 4/7th ? ). German is 31 Dec. Both a UK Ltd & a German GmbH can choose when it's tax year date is. Then there's the question of whether tax is due on invoice being issued or money being received. used to be different between Germany & UK. Find out what it is currently & tell me please. Deft balancing of income between years to achieve uniform rather than peak personal tax rate any year may be possible. Not that I ever tried, but if you'r good with admin, & prediction, & can tear yourself away from the technology, maybe you can smiley face

Rating Agencies

A Gmbh owner wrote:
Many (especially bigger) customers don't want to deal with individuals, but only with "real" companies, i. e. a GmbH or similar. They get their information from several independent channels - like data collected by credit agency like Creditreform, Dun & Bradstreet (sooner or later you will need to register with D&B to get your DUNS number - at least if you ever want to deal with companies like Siemens etc.). They told me you cannot get any contracts any more without being registered with their "click2procure" system. and the first thing you need for registration is your DUNS number.
( Try via US Securities & Exchange Commission to find other reference agencies such as Duns )

If your customers find that you are a German who is running a Ltd.

Maybe they'll think less of you (`Sinking Ship' syndrome ? ;-) ... or they'll be impressed by your international financial prowess ? Or they'll think you modern, more European & flexible, non national- blinkered ? Probably a mix of various reactions. ... But you don't _have_ to tell them.:
  • UK Companies House list directors, not shareholders, far as I recall, & many small companies use `directors of convenience' paid an annual fee to sign forms & otherwise be quiet. As long as you hold the shares, you can hold a meeting & toss 'em out if they go berserk. There is an element of trust though - Yes ... trust & money with a stranger ?! ;-) - Better use someone you know & trust if you can ! I guess whoever is the man registered at the bank to sign company cheques is the one you Really have to trust !
  • However, if you don't tell 'em, it may be more problematic: A GmbH owner writes:
    The situation is actually worse if you cannot or don't want to openly answer any questions how your business is organised, etc. And such questions are standard when discussing with new customers. And with bigger ones (like Siemens) you will have to fill in all these nasty "Selbstauskünfte".

Exchange rate:

You can have a Euro dominated banka account in UK. ( Since '86 or earlier (OK, was DM then). Be warned: UK Inland Revenue will charge you corporate tax in Pounds Sterling, you'r gonna have fun with those exchange rates ! ... & which date does the rate apply ? that becomes of great importance if there's a currency rate lurch that year. I think it may be on the final day of the Co Ltd tax year, but I'm not at all sure, ask your accountant, please tell me if you know !

Financial Immunity &/or lack thereof: Personal, Directors, & Corporate

Certainly one has to consider not just any financial immunity that English company law may or may not give you as a service provider, &/or directors in UK, but also what the local German law might be able to get you for personally ... so to be sure: talk to 2 lawyers: one Brit & one German if you can afford to ;-) & then there's the ever increasing European laws: get a 3rd lawyer ? ;-) who knows what's at Brussels/ Strasbourg & the products of the tower of Babel (how many official languages are they burdened with now, & just what backlog do they have translating ?!) ;-)

Germany is more Business hostile than Britain

Nero Fiddles While Rome Burns (Author's Economic Rant !

Freelancers are _still_ seeing a rotten economy at 2004.06, that the German politicians seem to be still making no realistic effort to fix (eg they could reduce bureaucracy, rules & stupid medieval based guild type restrictions, not waste time passing ever more expansive & dubious ecology laws, & they could stop wasting time fighting over the balance of taxes between federal & Lander - & instead devote time to devising measures to expand the economy, not fight over a shrinking tax income !) The electoral slogan "It's the economy. Stupid!" never seems to have sunk in to the consciousness of politicians here. Does it give us satisfaction to know the economy is currently in charge of a chancellor who apparently finds time to sue in court about some allegation whether he does or does not use hair dye ... ?! A pity he can't fix the economy. Perhaps we need a shortish dose of Margaret Thatcher type radical reform, to shake up the complacent system, (even if it then needs a further shake up later to repair collateral damage ;-). Freelancers (often working through small companies) care more than most how well an economy is run, - we experience any down turn first. Any stability / growth is currently coming from USA & Britain etc, not from recessive mismanaged complacent Germany, the so called (& falsely labelled) locomotive of European industry, now well of the rails

Perhaps we need an `Anglo Saxon' (as French politician Chirac would condemn it), less regulated economy, to fix the mess. So why do I stay ? The great Munich beer gardens & proximity to Alps & lakes. Cycle track on a river & a big park through the middle of the city, & wide circle of friends. The economy itself though is good reason to leave. It's screwed. It began with Kohl's

Unification Bungle (justified by the Constitution apparently, that we had to be one unitary state of German speaking happy taxpayers, though they could have changed the constitution instead, after all, Germany's only been a state for a mere 150 years, Nothing compared to France Spain UK; Austria speaks German but isn't German, & USA & Australia aren't ruled from London)
& we had the the obvious
Big Lie "It won't cost you anything, self financing", which lots were amazingly gullible enough to believe at the time, I recall... After which came Solidaritaet Zuschlag, & East German high unemployment) ,
Then we had
The Big Move They'd had about 40 years to settle into Bonn, build a federal government infrastructure there, with much government work out sourced to the Lander. Then they forced near all employees to move to Berlin, which many didn't want to do, & ran up a horrendous taxpayers bill for new buildings etc. (& of course created a new over pressured central city like London: too big, centre of everything, nothing diversified, & of course reinstating the Berlin - proud capital of a large state sort of structure that worried some who remembered their history, but perhaps didn't care to articulate their thoughts. Not a problem currently, but an un-necessary, disruptive, insensitive & wasteful move.
When was the last time German politicians scrapped some laws, instead of heaping on more junk ? Politicians have talked tax reform for years, TV news was full of little else for years, but the Germans didn't discuss Business reform & relief from restrictive legislation.

The German people proved they can work hard post 2nd world war, reconstructing, but how can they work hard now, limited by more rules at every turn ? I see little hope of liberalisation for this rather sclerotic society except from Europe, forced down from above. eg

European Court 05/11/2002 Judgement/Urteil C-208/00 Überseering BV (Netherlands) Versus/gegen Nordic Construction Company Baumanagement GmbH (NCC)

Language of the case: German.

(My summary: companies formed legally elsewhere within the EU have legal substance overall in EU, & can't be ignored (& can't be refused permission (as non existent) to sue others etc).

I got the dates of the case from here go-limited.de, where it says Bundesgerichtshof confirmed it 13.03.2003 Search further if you want

Manufacturing tax = Gewerbesteuer

Monty Python's quote: "_Nobody_ _expects_ the Spanish Inquisition ! " Neither will you expect it when if you'r not damn careful how your structure your consultancy business, any hint of Manufacturing tax type business could bring you big trouble !

Manufacturing tax (& the German guilds system etc) can be the kiss of death to setting up new businesses. Gewerbe-steuer may make sense to narrow minded Germans or Brits who've gone native in Germany, but to this author, it's just another stupid tax that deters German industry. I've had ideas for several ventures I wouldn't pursue for fear of getting drawn into the cesspit of more German bureaucracy. I make every effort to avoid the entire German civil service, (except tax dept, gotta' pay them). The Kreiswerwaltungs were bloody un-civil & did their very best to obstruct my European Union rights to a residents permit way back. I won't waste my time with them. A burden the Germans have that kill & inhibits new industry & / or moves it off shore.

The German Guilds System

Perhaps the worst aspect of German business. Seems little changed from medieval practice to me. An obsession with paper qualifications rather than skills. Much work you still can't do without a "Meister-Brief" I've known a British builder who had to leave Germany, 'cos though hew was fully skilled, he couldn't trade alone, & had to pass hsi work through a `Meister' who was signing off, & creaming the profit. Chimney sweeps run a closed shop, legally maintained. Don't do anything with a soldering iron unless you'r qualified ! The IHK = Industry & Handels Kammer provide some potentially useful & interesting services, but be careful what you tell them: if membership was truly optional, that would be just fine, but it's not as I've heard it, if you'r in certain lines of work, there's obligation to join so I'm told, in certain circumstances. I'd be very glad to be categorically told by IHK that there's never in an case obligation to join, but I have been repeatedly told by locals that's not the case. All this closed shop national Meister rubbish is probably in breach of the treaty of Rome's freedom to move & work etc, but that needs court enforcement, & lawyers aren't cheap. Fact is you don't meet half the obstructions to work in the UK, that you meet in Germany.

Wholesale purchase often needs Handels Register

Many firms won't sell you to unless you'r registered in Germany. In Britain the usual attitude is: "If you want wholesale prices, we have minimum order quantities." but UK suppliers aren't stupid enough to simply refuse to sell. I've seen this obstruction from a Disc driver vendor in Soest (DM 3500 order refused) & Large food shops like Metro in Munich, who from 1985 to 2004 inclusive have consistently refused to sell from their large warehouse type outlets, unless you provide paper proof eg from the Finanzamt of being in formally registered business, (forget foreign = European documentation (Again !) If you just have say a few thousand Euro on you , see a good deal, & want to buy it here & sell it elsewhere in Europe: forget it - no German papers - no sale !

Retail purchase can be easier in other countries.

Even shop assistants get 2 years training (when you go shopping ask yourself what some spent 2 years learning ;-) Certainly back in the late 80's in Munich "Kunde (=Customer)" certainly used to all too often seem an epithet, though it's got better & I've probably got more used to dealing with locals their way ;-) They finally got credit cards here, but only about 2 decades after Britain. They finally let their shops open a little longer on Saturday, but only 2 decades after Britain, & still nowhere near as long. Tottenham Court Road London is open to sell electronics Saturday afternoon. PC shops near Schiller Strasse Munich closed, Not to sell computers Saturday afternoons. Partly German laws, partly German habits.

Working Hours - Inland

  • I've been chased out of work in Munich, because the boss didn't want our mixed teams of employees & freelancers being seen to work too long. If you work too many hours in a week, you (employee) can be prosecuted by the German state, & so can your boss.
  • I've known technologists officially check out with their time card, then sneak back into work, so it won't be on the books.
  • I've known employees who would have been genuinely happy to work a bit longer to get a job done, but who went home because they didn't want to be fined, be hassled by management for working too long, & nor did they want the risk of being uninsured if an accident happened while working on company premises.

Working Hours - Attempt To Cripple Other Countries

Germany was for a decade aggrieved that the UK allowed companies to employ people for a few more hours a week. They've long considered it gave the UK an unfair competitive edge. Perhaps it was an edge, but it was a national choice, & Germany seemed to ignore the consideration that while their economy was doing worse, perhaps `unfair competition' wasn't the reason, & perhaps they would have been better studying & emulating successful economies, & being grateful to have adjacent trading nations still doing well, to help also trade with & keep some adjacent German companies going. Instead, national jealousy, not envy seemed to rule among the politicians, & there were numerous German efforts to convince the Brits (& some others ) direct, or to force them through European co-ersion, to reduce their working hours too, supposedly on the grounds that Germany couldn't afford to give it's workers better conditions if the British were prepared to work harder. PS Just weekend of 2004.06.26 there's been an announcement that some Siemens workers with the reluctant agreement of their union are now going back up to a 40 hour week (from about 37 or so) with no increase in pay ! One extreme to the other !

UK: Building Use Planning Restrictions

UK used to have archaic planning laws. You were either a business, or a residence. Couldn't be both. Laws pre-dating a silent computer & silent laser printer ! Don't know current UK law, but I think there's still a problem there. The one example I can recall where the German system seemed more flexible (OK I don't know formal German law on that either, but I know what I see in practice).

Links.

Another MECC member wrote : Concerning getting information on German law, someone who could help out is Ulrich Bode (www.ulrich-bode.de), located near Munich and I found to be a very helpful person and runs a nice little firm. He is very involved in the German Gesellschaft für Informatik (GI), in the Chapter for promoting self-employment ( Beirat für Selbständige).

GI Munich branch

Bundesverband der freien Berufe.

Disclaimer.

This author & MECC in general are not lawyers nor accountants. We are technologists. Some of the above opinion may be plain wrong or outdated. If you want authoritative opinion go pay a professional accountant or lawyer etc, or even ask the tax office (free), apparently they're quite friendly in both countries I've heard, & if you ask before you do something rather than after, you can ask in all innocence smiley face There's also books on setting up UK companies. They cost a few pounds in any UK book shop (or try the Internet). Private Eye magazine use to carry ads for setting up cheap companies, ... & funnily enough often on the same page, ads for vanity book publishing ?!

This is a new page, still rough, may not be accurate, & I encourage factual corrections, Thanks. For anyone wondering: I like Germany, but find German bureaucracy inhibits new business.


Professional Indemnity Insurance = Vermogungs- haftpflicht- versicherung.

The Author

Author can be contacted here, to provide computer consultancy
or if you'r an international technology company looking to establish a support base in Munich, & or interested in computer products & services, the company page is here and some professional associates are here.
The 25,000 Euro Stamm- Kapital was announced as reduced to 10K on Deutschland Funk, Fri 29th April 2005 Not immediate, but With effect from 1.1.2006. Also level of capitalisation to be shown on letters. Source: BMJ (Bundes Ministerium der Justiz), PM (Presse Mit- Teilung ?). v. 29.04.2005 (photocopy from a friend)

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