For Start-ups

Registering a business

Before commencing your business activity, you must notify the regulatory agency (Ordnungsamt) in the district in which it will be based. You must be able to present your identity card or passport as well as any licences that are required. If several people wish to run a business together (as a business partnership), they must all attend together. If giving notification of a new corporation (GmbH, UG or AG), an extract from the Commercial Register must also be submitted. The tax office, Employers’ Liability Insurance Association, Chamber of Industry and Commerce and/or Chamber of Crafts and Skilled Trades are among the organisations that will be informed of the notification. Although the Employers’ Liability Insurance Association will normally be informed about the start-up automatically when notification is given, this does not release the businessman from his legal obligation to notify it himself. Article 192, Book VII of the Social Code stipulates that entrepreneurs – regardless of whether or not they employ others – are obliged to report to the appropriate Employers’ Liability Insurance Association within one week, and to inform it of the nature and object of the business, the number of insured persons, and the start-up details of the company.
In order to speed up registration with the tax office, you may notify it directly that you are starting the business. You are obliged to notify the regulatory agency (Ordnungsamt) not only that you are establishing the business, but also about any changes.
What information has to be supplied to the regulatory agency?
  • The date when the business is to start operating for the first time (N.B.: The date in question is that on which you actually start work on your project, e.g. you rent premises, promote your business in the marketplace or recruit employees.)
  • The opening of additional business premises (even in the same locality), especially if you are opening another branch or a dependent branch office
  • A change of address of your business premises (even within the same locality)
  • A change in the type of activities your business carries out
  • Expansion into an unconventional area (e.g. a bookseller who also sells wine)
  • The installation of gaming machines
  • The closure of the business
Freelancer vs. trader
  • Freelancers are self-employed people working as scientists, academics, artists, novelists, teachers, educationalists, etc.
    Typical freelancers include doctors, lawyers, tax advisors, business consultants, journalists, artists and academics. Freelancers are not governed by the German Trade Regulation.
    Code in their work, so do not have to notify the authorities of their business. A freelancer’s self-employment therefore formally begins when he applies for a tax ID number from the relevant tax office. In cases of doubt, the relevant tax office will also decide whether the activity concerned is a freelance occupation or a trade.
  • Trader: The freedom of economic activity is a fundamental right in Germany; in other words, anyone is entitled to carry out a trade unless exceptions or restrictions have been prescribed or permitted by law.
    What are the characteristics of a trader? You are a trader if you work:
    • in self-employment;
    • long term, i.e. with the intention of repeating and continuing
    • your activity and of making a profit; and
    • you are working neither in a freelance profession nor in primary production (agriculture and forestry, fisheries, etc.) or the civil service, or in a job that is basically against social mores (e.g. organ trafficking)