8 Challenges While Forming A Company In Germany


Nearly 4% of global direct investment flows into Germany there are a very few countries which are tightly connected to the world economy. Forming a Company in Germany can still be a challenge especially for those unfamiliar with its tax and legal structures. In order to make sure that things run smoothly from the start itself, having local help is essential. Being the biggest economy in Europe, Germany is the fourth-largest economy in the world. This success is built on innovation, research, and its capability to attract FDI from around the world. For foreign companies, forming a GmbH in Germany, is a way to go.

With first class infrastructure, a huge consumer market and a modern finance system, there are still a few challenges that a company can face and also the benefits of having local help on board:

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Starting a Business  

The process of starting a business can be a bit overwhelming in the beginning. Despite its modern outlook and global standing, businesses are liable to liaise with the  the local commercial register, local chamber of industry and commerce, the local office of business and professional association of the relevant trade.

Construction Permits

Approval of static calculation and obtaining a permit for building and are one of the most lengthy procedures while dealing with construction permits. Having someone local to help with these processes can ensure smooth flow of work without any uncalled for hassle.
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Getting Electricity

Germany has one of the most streamlined and fastest procedures for getting electricity to business in the world. It requires only three procedures and take only 17 days on average as compared to the OECD average of 98.

Registering Property

The registration of property is a complex process that is laden with bureaucracy. Companies need to obtain an extract from the Land Registry. You then have to notarise the transfer agreement before finally obtaining the waiver of preemption rights with the municipality.
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Getting Credit

Having a modern financial sector in place, Germany operates within a strict legal environment. Getting credit is a relatively streamlined process,with no collateral registry involved.

Paying Taxes

Germany’s fiscal system can be a bit complicated to navigate. Studies have shown that it takes a business nine tax payments a year which consumes an almost of 207 hours of their time. This time can be utilised in more pressing concerns that is running your business. Therefore, having a local help can go a long way especially in the initial phase of the business.
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Trading Across Border

A relatively cheaper and easy endeavour in Europe, trading across borders requires four documents which needs to be prepared when you are exporting and five when you are importing. Having a local help would help figure out all the intricacies and can get this work done faster than you can imagine.

Enforcing Contracts And Resolving Insolvency

Germany’s up to date legal system takes care of the insolvency and contracts with relative efficiency. But native laws and regulations can sometimes be tricky to understand. Therefore having a help can ensure smooth flow of work.
Location: Germany

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