6 Steps To Becoming An Entrepreneur In Germany

For many people, being an entrepreneur is the ultimate career goal. The constant hustle, the idea of being your own boss, and the freedom to make all business decisions are benefits that appeal to all budding entrepreneurs. Regardless of your business’s size, you can easily become an entrepreneur with the right mindset and a nurturing entrepreneurial ecosystem.

One country that’s continuously being praised for its business-friendly environment is Germany. A country needs to provide the resources entrepreneurs need to get the kickstart to start their own businesses and foster entrepreneurial thinking. 

In this regard, Germany is consistently ranked as the top country for entrepreneurship based on multiple factors, including well-developed infrastructure, an excellent legal framework, technological expertise, and easy access to capital. 

If Germany’s environment has piqued your interest and you want to know how you can become an entrepreneur in the country as a foreigner, here’s what you need to do:

Obtain Health Insurance 

Before getting a resident permit or visa, permission to be a freelancer or set up your own business in Germany, you need to have health insurance which is mandatory. All German residents are required to have health insurance, and you’d be surprised how many applicants get rejected because they don’t have this important document. 

You should opt for one of the health insurance Germany options, by making a choice between public and private health insurance. Since you will be declared as a freelancer or self employed person, you will have private health insurance in Germany, opposed to the public one which is based on income.

Contrary to what many people think, you don’t necessarily need a business account since a normal account will work just as well. However, you should clarify this with the bank in advance since some of them may cancel your account if you use it for business transactions. To set up a bank account, you’ll need a registration certificate, which you’ll obtain when you register your address in the country. 

Apply For A Visa

If you’re from the European Union, you don’t need to worry about this. However, if not, you need to apply for a freelance visa that permits you to be self-employed in Germany. Technically, it’s called the freelance residence permit, but people typically refer to it as a visa. 

Once you have the necessary documents, you can apply for your freelance visa. Note that you also need to prove that you’ll make a valuable contribution to the German economy. You can prove this by bringing in documents, such as proof of savings, letters of recommendation, and a business plan.

Additionally, you also need to provide a regional need or cultural or economic interest in what you do. You need to focus on the regional aspect since you won’t get the visa if your customer base is in another country. All in all, you need to provide enough evidence that shows you can support yourself after moving to the country. 

Register An Address In The Country

Registering an address in Germany is a crucial step, and many other vital documents are dependent on this one. Completing this step will give you a tax ID and certificate of registration, which is essential for opening a bank account in Germany.

So, before beginning the entire process of setting up a business in the country, you need to find a place to live. You’ll need to obtain a document that is signed by the landlord. You can also get a signed letter from the main tenant if you’re renting a sublet or a room if the landlord provides you permission. 

Determine Whether You’re A Freelancer Or A Tradesman

This step is vital for when you have to register your business with the tax office. The difference between whether you’re a tradesman or freelancer is critical since tradesmen need to apply for a trade license and pay a trade tax. Tradesmen also have to be listed in a trade register and follow specified accounting rules. 

On the other hand, if you’re a freelancer, the process might be a little simpler, but you need to fall under specific professional categories, such as writers, therapists, engineers, actors, and tax consultants.

Open A Bank Account

Having a German bank account will be incredibly useful during this journey. Not only does it help with legalities, such as during the visa or business registration process, but it’ll also help you manage your finances when you’ve successfully set up your business. It’s also essential when you have to start paying taxes.

Network And Recruit Skilled Talent

Lastly, it would be best if you focused on why you’re in Germany in the first place. Your primary aim is to set up a successful business and scale it. To do this, you need to have a team in place to perform tasks that you can’t do. By delegating tasks that may not necessarily require all your attention, you can focus your efforts on other areas, such as business development. 

To recruit your skilled talent, you need to know where to find it and have an excellent recruitment strategy in place. You can reach out on LinkedIn or other business platforms, where you can find talent that matches your criteria. Many companies also use social media as an effective recruitment strategy to extend your geographic reach when you search for talent. 

Final Thoughts

This article will provide you a kickstart on what you need to do to become an entrepreneur in Germany. Starting a business in the country can be an incredible experience. With a nurturing environment for anyone who wants to explore their interests, it doesn’t get better than this. While the process may seem complicated, it becomes quite straightforward when you put your mind and heart into your passion.

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.