Murray's Blog

HRB 164185 (Openismus GmbH)

Openismus GmbH now 100% officially exists. All the steps are complete. It’s done. I win. Wikipedia can tell you what a German GmbH is, so ignore my summary if you want accuracy.

This is the easiest form of company to set up in Germany (or an OHG if you are selling physical products). Anything else (such as a GbR) isn’t really a company (“Firma”) and doesn’t have limited liability like a U.K. Ltd company. It’s ridiculously difficult and expensive to set one up, compared to a U.K. Ltd company. On the other hand, you don’t need a GmbH (or GbR) to do business, and Germany makes it very easy to do freelance work without a company. In the U.K. you tend to need a Ltd company, though that’s maybe just so you can pay less tax.

In fact, a person with a GmbH pays more overall tax than an individual and a GmbH demands more (expensive) administration. Yet it’s that difficulty that gives a GmbH an air of respect. Every now and then Germans politicians discuss making it easier but then a bunch of them point out how awful that would be because some of them might fail. Hello? Jobs? Muppets.

Also, clients outside of Germany need to deal with something that’s recognizably a company without having to understand German law enough to know that you don’t need a company in Germany. Note that residents of Germany may set up a U.K. Ltd company instead, thanks to the EU, thus avoiding some of Germany’s beaurocracy, but that still looks suspicious to German clients, and isn’t common enough yet for the procedures to be well understood by German accountants. But I expect this to become accepted in future, leaving the GmbH as a provincial anachronism.

Alternatively, some EU-wide form of company will become more accepted. There’s already an SE company form, but it’s limited to companies with a minimum capital of 105,000 Euros. I’m still convinced that national governments of the EU will fight to the last to preserve their incompatible islands of tax complication. How else can they promise cash to their backers in the form of tax loopholes and allowances. The only EU-wide companies big enough to influence them are big enough to pay their accountants to deal with it.

Anyway, the process went like this.

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