Germany is home to tens of thousands of companies, from small one-person businesses to large industrial corporations. Many of the reasons for the great development of the German economy are due to the large number of small and medium-sized enterprises. The German government is very willing to support new businesses of any kind, whether they are run by Germans or foreigners. Germany ranks 24th out of 190 countries in the World Bank’s ease of doing business rankings.
In Germany you can choose what type of company you want to open. Starting from a one-person company to more complex corporate forms. My advice is to find a good tax advisor through recommendations from compatriots who are already doing business in Germany. Once you have found a tax advisor, he will give you all the information you need about tax and business aspects.
Opening a new business is really fast and cheap. However, since Germany is a federal state, there are differences from state to state. I recommend that you contact the IHK in the city where you want to open your business and they will give you all the information.
To start a business in Germany, it is not required by law to know German. However, if you do not know the language, you may encounter problems in the day-to-day running of your business: talk to suppliers, to the accountant, etc. Therefore, you should wait until you have mastered the German language before taking this step.
To be fair, there are many pizzerias, restaurants and other businesses run by foreigners who do not know German but have hired at least one or two compatriots (waiters, bartenders, etc.) who speak German and use them as interpreters.
Make it in Germany on the website of the Ministry of Labor and Economy you can find all the information about how to start a business in Germany, how to open a new business, how to get access to funds or any kind of financing and much more.
The business that foreigners do in Germany is mainly concentrated in the hospitality industry. Germany is full of pizzerias, restaurants, pastry shops, bars, etc. However, there are also entrepreneurs who operate in other industries.
For those who want to open a business in Germany, I always advise them to live locally for a while. This will make it possible for you:
- know the area and the profitability of the business
- be able to assess the advantages and disadvantages of the location
- to understand if your idea can work
To open a restaurant/bar, you have two options:
- Purchase a license for a restaurant that is already in operation; if the restaurant is in operation, the cost will be significant. If the restaurant is closed, it may be attractively priced, but the challenge will be more difficult
- Opening a new restaurant: in this case, you do not have to buy a license, which would significantly reduce the start-up costs for your business. You should check if the municipality is still issuing new licenses. Carefully check the location of the business premises, the most important condition for the success of your business
How much money do you need to open a business in Germany?
Many factors play a role here:
- It depends on the type of business you want to start
- whether you are opening a new business or taking over an existing one
- whether the business you want to open is profitable or loss-making
- the city in which you want to open the business, etc.
If we talk about new premises, to give some figures, we can say that the investment can range from 20,000€/ 30,000 € for a small bar/cafeteria to 100,000 € and more for a restaurant. In any case, when making your business plan, you should always allow for expenses 25% higher than the budget.
Here is the list of the richest areas in Germany:
- Hamburg and surroundings
- Bremen and surroundings
- Monaco and surroundings
- Stuttgart and surroundings
- Frankfurt and surroundings
The capital, Berlin, is not included because not only is it not a rich city, but it is also experiencing heavy immigration with more and more new openings and a price war.
For example, if you want to open a high-end restaurant with high prices, you could consider the above cities. On the other hand, if you want to open a mid-priced restaurant, you can operate all over Germany without any problems.
Do not think that Germany is the El Dorado. Competition in the restaurant industry is very strong and it is not easy to succeed, remember that more than half of new establishments close in the first year. That is the reality of the facts.
All information about starting a new business in Germany can be found here:
- on the website of the Ministry of Economy
- on the Eugo website where you can find information about the different Land
Many German cities offer support and information to potential investors. So, if you are ready to invest in a German city, I recommend you take a look at their website. For example, the website of the city of Bremen
