Company Formation in the EU

The European Union is one of the world's largest economies. For entrepreneurs, it's one of the best places to start a business. It has well-developed infrastructure and has always been an attractive location for both domestic and international investors. The number of unicorns — startups valued over $1 billion — has grown dramatically in recent years. Europe meets the requirements of both private and public potential enterprises.

Below, we list some of the points that make the European Economic Community (EEC), with its large common market, a good place for trade, distribution, and production.

Requirements for setting up a company in the EU

To get started you will need a few documents. You should have a European passport or at least a work permit in order to set up your company. You also need an address for the commercial register in the respective district. To set up a company you also need a business bank account.

Especially when starting a business, you need information about your planned operation. What is the nature and scope of your business? Do you have partners who will work with you? Such questions are answered in a professional business plan and in the articles of association. What exactly you need depends on the country within the EU in which you want to set up your company. If you live outside the EU, this is something to think about.

Choosing the right country in the EU to set up a business

Within the European Union there is a whole range of attractive countries to choose from. To get an overview of what works best where, there are many detailed lists online. These are often organized by specific categories that help to narrow down your choice.

Depending on exactly what you want to do, you will weight certain factors more heavily than others. If you want to trade goods and materials, you may primarily look for a geographical advantage. If you are looking for a place where doing business is as inexpensive as possible, you will look for a country with a particularly favorable corporate tax structure. There are differences between the individual states. In general, you should also pay attention to the available talent and the infrastructure that will support your specific business idea.

There are regions that are better suited to manufacturing, while others are more suited to technology or other industries. Thorough research helps when choosing the right place to build up your company and your reputation.

For people living within the EU, there are hardly any restrictions when it comes to setting up and registering a company. Whether you choose the country in which you live or a different one, you benefit from the EU-wide freedom of establishment. This means that either you already have a residence permit or a work permit for the desired location, or you do not have too many steps to take in order to obtain one or the other.

For people living outside the EU, this topic can be a little – or quite a lot – more complicated. For tips on this I have already uploaded another article that deals with the concept of representation. You can find it here. Representation allows you to operate in another country through a local representative.

Setting up your company

Once you have decided on a location, the exact procedure – from drawing up a professional and detailed business plan to the final incorporation of a company – varies from country to country. If you have prepared the paperwork mentioned above, the process should be relatively straightforward everywhere. There is a wealth of detailed information about this on the internet. Even once you have moved from the idea to your first concrete steps, you should definitely seek advice from an expert. For basic advice, your first port of call should always be the local Chamber of Industry and Commerce.

Long story short: Europe is an attractive location for doing business. As everywhere, there are several steps to go through before you can start. But once you have done your research and consulted the right people, you should simply get going and take the next step.

Guide to becoming self-employed in Germany

Setting up a company in Germany is much easier than you might think. A new draft law by the Federal Cabinet, for example, will make it possible to set up GmbHs online in the future. In addition, the German authorities will help you with any open questions. We at businessstart.eu have developed a guide with tips you should also bear in mind. If you have any further questions, please do not hesitate to contact us at info@businessstart.eu.

1. Plan your foundation: take your time

Do you have the idea of becoming self-employed or taking over a company? If so: you probably want to start immediately. But be careful: self-employment requires a lot of commitment and the willingness to take new paths. You will be challenged and may reach your limits.

TIP: Take your time and do not rush. Only start once you have prepared your foundation well. Set yourself a clear timeline.

2. Gather information: use existing offerings

In Germany there is a wide range of information on starting a business. There are also many public bodies that inform about the challenges and requirements of setting up a business.

TIP: First discuss your idea with your family, friends, and acquaintances. Get an overview of publicly available information. Businessstart.eu helps you with important questions about setting up a business. The Chambers of Industry and Commerce and the Chambers of Crafts also support you.

3. Comply with formalities: proof of qualifications and permits

If you set up a company in Germany, you have to make a number of registrations. For certain activities a special authorization is required, such as a university degree or a master craftsman's title.

TIP: Find out about the required registrations and permits. Get in touch with Chambers of Industry and Commerce or migrant advisory centers.

4. Provide proof of qualifications: recognition of vocational training

Have you completed vocational training in your country of origin? That does not automatically mean that you meet all the requirements for self-employment in Germany.

TIP: Submit an application to have the equivalence of your professional qualification reviewed.

5. Permission for self-employment: obtain residence permits

Are you not an EU or EEA citizen and would like to set up a company in Germany? Then you need a special residence permit allowing you to pursue self-employed activity.

TIP: Check whether you have a residence title that permits self-employment. Otherwise, advisory centers will support you with the application.

6. Build business relationships: be well prepared

After establishing your business, it is important to develop good relationships with customers and business partners. In Germany, a strict separation between private and business matters is often made.

TIP: Prepare well for meetings and expect German partners to get "down to business" quickly. Write down your concerns and questions in advance.