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Legal formalities for setting up in business in Germany
Thread poster: Astrid Elke Witte

Astrid Elke Witte  Identity Verified
Germany
Local time: 10:49
Member (2002)
German to English
+ ...
Mar 16, 2002

I have been doing translations on a regular basis for some time, for both my full-time employer and also for agencies via the Internet. However, I have not up to now started a formal business.



I heard from somewhere that I had to register with the Gemeinde and pay a fee, then I heard from somewhere else that this was not true, because translating is classed as \"Scheinselbständigkeit\". Anyone know which of the two stories is correct?



Also, I would like my business to have a name (\"XXXXXXXXX Translations\" - to be decided). When I lived in Britain there was a rule against using anything but one\'s one name, unless starting a business of a particular type. Does anyone know whether this difficulty also exists in Germany?



Any help in these matters would be very much appreciated.


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Alison Schwitzgebel
Germany
Local time: 10:49
Member (2002)
German to English
+ ...
Do you want to set up a business or work for yourself? Mar 17, 2002

In Germany, there is a clear differentiation between forming a business (GmbH, KG, GbR, etc) and working for yourself as a \"Freiberufliche Übersetzerin\".



In Germany, translators belong to the so-called \"freien Berufen\", which also includes doctors, lawyers, etc. As such, we don\'t need to register with the Gemeinde or Gewerbeamt, but just need a tax number (contact your Finanzamt - but ask your tax adviser first as they\'ll ask you how much you plan to earn and base your reporting requirements on this figure).



Okay, Scheinselbstständigkeit would only apply if you were officially working freelance but were dependent on only one customer, had to take your holidays as and when this customer dictated, etc. etc. - you\'ll find loads of stuff on the Web as to what constitutes Scheinselbständigkeit.



Now if you want your business to have a name, then you actually need to form a company, which can have advantages (like limited liability if you form a GmbH, for example). If you have to have XXXXXXXX translations as a name this will also limit the number of company forms available to you.



Bear in mind that some Company forms will make you liable for different types of taxes (Gewerbesteuer, Körperschaftssteuer). The choice you make should be discussed in detail with your tax adviser, as the way you plan to run your business (with employees or no employees, how many employees, where are you going to get capital from, how ready are your investors to enter into risk, how big your business is going to be) can all affect the choice of what type of business you choose to form.



Different types of businesses also carry different formation requirements - for example, a GmbH will require you to pay in capital to the company register at you local Amtsgericht and you will have to have a notarized \"Gesellschaftsvertrag\" - whereas for a GbR you basically just have to shake hands with the person you plan on forming the company with. But bear in mind that as a partner in a GbR you are fully liable with all your personal assets if something goes horribly wrong - whereas if you form a GmbH you are only liable to the amount of your paid-in capital.



My advice: Talk to your tax adviser before doing anything!!!



Hope that helps!



Alison


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L. Russell Jones  Identity Verified
Local time: 10:49
German to English
UK Ltd in Germany? How? Jul 12, 2004

Alison Riddell-Kachur wrote:

In Germany, there is a clear differentiation between forming a business (GmbH, KG, GbR, etc) and working for yourself as a \"Freiberufliche Übersetzerin\".



In Germany, translators belong to the so-called \"freien Berufen\", which also includes doctors, lawyers, etc. As such, we don\'t need to register with the Gemeinde or Gewerbeamt, but just need a tax number (contact your Finanzamt - but ask your tax adviser first as they\'ll ask you how much you plan to earn and base your reporting requirements on this figure)....


I am in a similar situation and would like to know how Proz members in Germany have handeled it. Can a UK Limited (requiring far less capital than a GmbH) do business (establish a bank account, rent office space etc.) in Germany? If so, what requirements are there?


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Kevin Pfeiffer  Identity Verified
Germany
Local time: 10:49
Member (2004)
German to English
+ ...
Ich AG? Jul 13, 2004

Hi,

I'm jumping right in here (should probably be first reading the archives), because the topic is pertinent. The Arbeitsamt offers a program called "ich-AG". For someone like myself that is at the moment arbeitslos this program offers some financial benefits or incentives. If you know, how does the Ich-AG fit into the freiberufler vs. business mix?

(Danke im voraus)

-K


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