Business in Germany

Everyone who is thinking about starting a business abroad, of course, has their own reasons for choosing a particular country. But anyone would like to work in the most comfortable, transparent and predictable business environment, where reasonable laws apply and property rights are respected. Germany will definitely be among the countries that first come to mind for a future entrepreneur.

For professionals and not only
"I'm growing up, I'll be seventeen. Where should I work then, what should I do?" – about the same problem, regardless of age, arises for those who are thinking about starting a business abroad.
Those who already have their own business in Russia are in the best position. "The most promising direction for you will be the one in which you are best versed,– says Bogdan Polyakov, founder of KENNEN GmbH. – If you are a great hairdresser, open a salon, it would be stupid to engage in the restaurant business. And vice versa."
The difficulty is that a lot of people don't have any entrepreneurial experience at all. A dead end? Fortunately, no: the ideal option for a beginner is to purchase an apartment building or apartment for subsequent rental. Such a business is promising and the least troublesome in the markets of many countries. But in Germany, says Natalia Zhukova, head of the foreign real estate department at Cliff Property, there are specific conditions that make this type of activity even more interesting.
Firstly, it is a tradition accepted among local residents to rent a house, rather than buy it. Only 43% of the population lives in their own houses and apartments, while the remaining 57% rent real estate. In large cities, there are five times more people who rent apartments than those who buy. It follows from this that the demand for rental housing is consistently high.
The second consideration is affordable prices, because real estate in Germany is much more affordable than in most Western European countries. This is especially true for the German capital, where the quality of real estate is very high, and prices remain affordable – from 1000 euros per 1 sq.m. m in prestigious areas of West Berlin.
Renting an apartment is not only the easiest, but also the most affordable way to earn money on real estate. The minimum required to start a business is about 50,000 euros. But the profitability will also be low – only 5-7% of the price of the object per year. "It is the western part of Berlin that may be of interest to foreign investors," Bogdan Polyakov emphasizes, "buying in the eastern part, where prices are about two times lower, can only bring losses, since no one will ever want to rent it, profitability is zero."
If we are talking about more global options, then Bogdan Polyakov recommends paying attention to the hotel business. "Berlin is one of the largest tourist centers," he notes. "Exhibitions and conferences, theater and film festivals are constantly held here, and there are a huge number of research institutes and higher educational institutions. With a huge flow of tourists, business travelers and guests, all types of hotel real estate are interesting: apartments and hotels, private pensions and large hotels."
A hotel is not the only option, you can invest in an apartment building, a restaurant, a store, etc. With an investment of several million when buying an office center, you can achieve profitability of up to 20% and above. But, whatever the field of activity, income and, accordingly, profitability directly depend on the business strategy and management quality. In other words, it depends on the desires and efforts of the owner.

Legal aspects
The process of registering a new company in Germany, experts say, is well-established, all procedures are very clearly spelled out in the laws, which eliminates the arbitrariness of the bureaucracy. "Germany supports entrepreneurial activity in every possible way," says Bogdan Polyakov. "There are no restrictions for foreigners who want to open a company in the country."
The most common organizational and legal form of a legal entity is GmbH (Gesellschaft mit beschrankter Haftung). "It can be called an analogue of a Russian limited liability company," says Natalia Zhukova. – The minimum number of participants in such an enterprise is one person, the minimum amount of authorized capital is 25,000 euros. Subject to certain formalities, only half of the amount of the authorized capital can be paid at the time of registration, the rest – later."
The director of the company must be a person who has the right to work in Germany. As for the founders (or the founder), their personal participation may be limited to signing a contract at a notary office and opening a corporate bank account. At the same time, the only necessary document is a passport. All other formalities, including the preparation of constituent documents and registration of a legal entity in the Commercial Register, can be entrusted to professionals.
It takes lawyers no more than two weeks to prepare the foundation agreement. It takes about four months between signing the document at the notary and receiving the registration number. During this period, the company can already work – but in all documents it is necessary to indicate "I.G." ("in the state of registration").
The range of services for registering a company in Berlin costs about 3,000 euros, but some activities require special licenses and permits, which increases this amount. In addition, the cost of similar services in other parts of Germany may vary.
As in any country, intermediaries should be carefully selected in Germany. It is necessary to verify the integrity of the agents, make inquiries, check licenses, and view reviews about the company on the Internet. This is doubly important if a foreigner does not start a business from scratch, but acquires an existing one. "This option has advantages: you do not have to deal with the purchase of equipment, the formation of staff and other things, but you can immediately get existing assets," notes Bogdan Polyakov. – But there are also pitfalls. Even with perfect financial performance, an existing company may have a bad reputation, which the new owner will never get rid of."
Is business activity in Germany a reason for permanent residence in the country? According to German law, there is a possibility of business immigration - to do this, you need to invest at least 250,000 euros in the German economy and create at least five jobs. But even if the investments are noticeably more modest, the founder of a company in Germany can receive a business multivisa (provided that the company works and pays taxes). After that, you can apply for a residence permit (issued for a year, extended for two years), and then for permanent residence.

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