As AI makes it feasible to build good things with tiny teams I recently am finding myself repeatedly in discussions with friends about starting a business. It would be the first time in 20 years for me to be founding a GmbH.
The thought of all that regulatory hassle you have to go through in Germany compared to those superniche ideas you would try out in our AI days, makes me weep [1].
I wonder if the gap we‘ve already saw in the last 20 years between EU and US in terms of tech success stories is just the tip of the iceberg of what’s to come.
[1] notary costs (every visit ~400€ like changing your address or business scope), registry costs (also for every address and business scope change), hiring a tax attorney to produce compliant balance sheets (2,000 - 3,000 € /year), multiple types of yearly, quarterly, and monthly tax filings (tax attorney 150-300€/ month), different taxes which will be collected federally and locally, mandatory membership in Commerce Chambers (~350€/year), legal requirement to have a „business bank account“ (here at least today there are some startups making this easier and somewhat cheaper), mandatory membership at a trade-coop (yes it costs money), public health insurers in your neck nagging you to find some legal trap you stumbled into to extract bankrupting amounts of premiums from you, same with the state pension program. And just because you close down, it doesn’t just stop (you have operate the GmbH for years after before it gets deleted, so you pay money for years after still). Then there is the Exit Tax, which on the rare case you were successful locks you into Germany forever (unless again you pay professionals insane amounts of money).
So this leaves you and your kindergarten-Management-slash-Single-parent-CRM vibe coding idea easily with effectively 500-1000 €/month just to deal with red tape.
But it’s not just the money, each of these points I listed are just sources of endless amounts of paperwork with people/Organisations that know they don’t have to respect you or care about you at all to extract money from you.
And no, UG is not helping at all because still exactly the same GmbH red tape applies. And I am 65% certain the proposed EU Incs will - in Germany - be not exempt from this.
The thought of all that regulatory hassle you have to go through in Germany compared to those superniche ideas you would try out in our AI days, makes me weep [1].
I wonder if the gap we‘ve already saw in the last 20 years between EU and US in terms of tech success stories is just the tip of the iceberg of what’s to come.
[1] notary costs (every visit ~400€ like changing your address or business scope), registry costs (also for every address and business scope change), hiring a tax attorney to produce compliant balance sheets (2,000 - 3,000 € /year), multiple types of yearly, quarterly, and monthly tax filings (tax attorney 150-300€/ month), different taxes which will be collected federally and locally, mandatory membership in Commerce Chambers (~350€/year), legal requirement to have a „business bank account“ (here at least today there are some startups making this easier and somewhat cheaper), mandatory membership at a trade-coop (yes it costs money), public health insurers in your neck nagging you to find some legal trap you stumbled into to extract bankrupting amounts of premiums from you, same with the state pension program. And just because you close down, it doesn’t just stop (you have operate the GmbH for years after before it gets deleted, so you pay money for years after still). Then there is the Exit Tax, which on the rare case you were successful locks you into Germany forever (unless again you pay professionals insane amounts of money).
So this leaves you and your kindergarten-Management-slash-Single-parent-CRM vibe coding idea easily with effectively 500-1000 €/month just to deal with red tape.
But it’s not just the money, each of these points I listed are just sources of endless amounts of paperwork with people/Organisations that know they don’t have to respect you or care about you at all to extract money from you.
And no, UG is not helping at all because still exactly the same GmbH red tape applies. And I am 65% certain the proposed EU Incs will - in Germany - be not exempt from this.