Success tips when doing business in Germany in 2023
Before engaging in company registration, there are several points that our Client should know:
- The Client should prepare a comprehensive business plan which includes i) an extensive market study ii) an evaluation of competitors and iii) a complete feasibility study of the plan;
- The Client must perform a detailed study of the sector where he/she is planning to setup the business; this will optimize your work productivity;
- The Client should try and learn German, as it is the lingua franca and therefore important for building a business network;
- The Client must have a website in the German language to use as an efficient marketing tool;
- Prior to company incorporation, the Client must have a proper exit strategy in order to map out potential accomplishments for the future. This will help the firm manage its finances efficiently;
- It is important that the Client communicate with us regarding any problems that he/she faces; our experts regularly help young businesses succeed in foreign countries.
Germany corporate culture tends towards conservatism. To help our Clients to prepare themselves to do business in Germany, these are our suggestions:
- Always make an appointment; walk-ins will convey informality and will not be well received;
- Always be punctual for a meeting; deferrals must be avoided whenever possible;
- You must conduct your own due diligence prior to a meeting. Address people by their professional titles unless specifically asked otherwise;
- A strict dress code needs to be maintained at all times; dresses must be formal, but not showy;
- There is a reluctance to take risks in Germany’s business culture; you will be expected to provide substantial information before any consensus is reached;
- German corporate culture has a deeply entrenched and rigid hierarchy; respect for seniors is the only way to be successful;
- Gifts should only be exchanged after the successful conclusion of negotiations; if done before, it will be perceived as bribery or flattery;
- Always inquire about the English-language proficiency of a business man beforehand; where the counterparty’s English skills are lacking, hire an interpreter to increase efficiency;
- Lastly, it is important to remember that Germany business culture revolves around results; always remember to put your best foot forward.
Interesting facts about Germany
- Germany has a pluralistic society; it has more than 15 million first and second generation foreigners;
- German is the official language of 5 countries: Germany, Switzerland, Austria, Luxembourg and Liechtenstein. German is the 3rd most commonly taught language worldwide;
- Germany is famous as the birth place of Nobel Prize winner Albert Einstein; today, 102 Germans have received the Nobel Prize for excellence;
- Great musicians and composers like Beethoven, Johann Bach and Richard Wagner were all Germans;
- Germany has the most zoos in the world; Berlin zoo is the world’s largest;
- Germans are the second largest consumer of beer in the world after the Irish;
- Germans are obsessed with bread; the country has museums that showcase 300 different kinds of bread;
- Germans love soccer; the country has the highest number of soccer fan clubs in the world;
- The 1st Bible was printed by a German (Gutenberg) in the year 1455. Also, the New Testament was written by a German (Martin Luther);
- There is a Barbie doll made after the German chancellor Angela Merkel;
- For German kids, it is determined in the 4th grade if they go to university or, instead, enter the work force directly when they grow up;
- The Munich Oktoberfest actually starts in September;
- Holocaust denial is a crime in Germany;
- Smoking is legal in German public places; no law is passed to stop this because Nazis used to oppose public smoking and no political party wants to support a Nazi conviction.
Frequently asked questions
Is a Germany company required to submit an annual tax return and/or financial statements?A Germany company is obliged maintain accounts and submit annual financial statements. Large and medium companies are subject to audits.
What are the tax implications for a German company?
- Corporation income tax rate is a flat 15%, excluding tax rates levied at the municipal-level;
- Value-Added Tax (VAT) is 19% on all chargeable goods and services delivered in Germany, including intra-company transactions. A lower rate of 7% is charged for daily convenience goods (eg. food, public transport).
Is it necessary to deposit the initial capital at once for a Germany LLC?No. For company registration to be successful, the Client will need to prove that at least half the amount (€12,500) has been deposited. Later, during the visa application process, the rest of the deposit must be made.
Do all resident companies need to have their financial statements audited?
No. A firm that meets two out of three of the following criteria is not required to have its financial statements audited:
- Total assets < €4,840,000;
- Turnover < €9,680,000;
- Total employees < 50.
Is it possible to have a Germany free zone company?No. A free zone company is not recognized under German law.
Can I use the share capital once the registration process is completed?No. Once, the registration process is complete, you will need to apply for residence permit where proof of capital will be required by the chamber of commerce. However, after the residence permit is granted, the capital can be used.
What monthly government reporting is required for my Germany company?A Germany business formation is only required to submit audited annual returns by 31st of May every year.
Can I register a company in Germany if I have no plan to live in the country?Shareholders and directors of a limited liability company do not need to be German or residing in Germany. However, the company’s managing director must travel Germany to complete registration of the company. Assistance with arranging the necessary travel is included in our Germany business registration services. If required, our company registration agent will greet our Client at the airport and escort him or her to the Client’s chosen hotel.