Registering a Business
When do I have to register a business (including a small business or secondary self-employed activity)?
Any scheduled, long-term self-employed activity that seeks to make a profit is a business and must be registered. This registration is required irrespective of whether this activity is performed as a primary or secondary professional activity. The takeover of an existing business or the opening of another branch also has to be registered. Businesspersons include in particular traders, restaurant owners and skilled tradespersons.
The business must be registered when its operations commence.
The activities of freelance/independent professionals (e.g. doctors, lawyers or tax consultants) are not considered to be businesses.
In general, freelance/independent professionals do not have to register as a business!
The finer details of the distinction between businesspersons and freelance/independent professionals can be complicated and cannot be fully covered here. Freelance/independent professionals generally assume responsibility for providing personal, professionally independent goods and services which are of a high value. They acquire the ability to do so through their special professional qualifications or creative talent (see also Section 1(2) of the German Law on Partnerships for Members of the Freelance/Independent Professions [Gesetz über Partnerschaftsgesellschaften Angehöriger Freier Berufe, PartGG]). If in doubt, please do not hesitate to ask the competent regulatory authority through the ticket system on the Wirtschafts-Service-Portal.NRW or the Verwaltungssuchmaschine. Please also contact your tax office.
The professions listed under Section 18 of the German Income Tax Act [Einkommensteuergesetz, EStG] are as a rule freelance/independent professions, also within the context of commercial law. According to this, freelance/independent professions include in particular:
- Medical professions: doctors, dentists, veterinarians, practitioners of alternative medicine and physiotherapists
- Legal, tax-related and financial advisory professions: lawyers, patent lawyers, notary publics, auditors, tax consultants, tax agents, economic advisors and management consultants, chartered accountants and attested auditors of books
- Natural science/technical professions: surveyors, engineers, trade chemists, architects and pilots
- Linguistic or informative professions: journalists, photojournalists, interpreters and translators
The same applies to the additional professions listed in Section 1(2) of the German Law on Partnerships for Members of the Freelance/Independent Professions: psychologists, massage therapists, midwives and professional independent experts.
Professions considered to be freelance/independent within the meaning of income tax law are not subject to business tax. However, please note that the use of the term “freelance/independent profession” under income tax law may not be identical to the use of the term under commercial law. It therefore cannot be excluded that, in certain cases, an activity that qualifies as a freelance/independent profession under tax law may also have to be registered in accordance with the German Code of Trade and Commerce [Gewerbeordnung, GewO].
The above-stated list of professions is not exhaustive and is only provided for orientation. Comparable professions are therefore generally also considered to be freelance/independent professions (e.g. occupational therapists). The decisive factor is above all whether the training or activities are comparable to those for one of the listed professions.
Since creative talent may also be an indicator for a freelance/independent profession, self-employed scientific, artistic, literary, teaching or educational activities are normally classified as freelance/independent professions. This is generally determined by whether the activities consist primarily of intellectual, creative work. If so, these are generally considered to be freelance/independent professions.
Please also note the following: What matters is the specific activities performed. This is important for so-called mixed activities. A lawyer, for example, may be considered a practitioner of an independent profession due to his or her activities as a lawyer, but as a businessperson if he or she performs advisory activities as a secondary profession. Many such constellations are possible – for example, if an author markets her work through an online publisher, her literary activities will be considered a freelance/independent profession, while the sale of books will represent a business. Clear distinctions must therefore be made, especially for accounting purposes.
For more information, we recommend:
- General information on freelance/independent professions and the definition of a business, including a self-test: see here (version: 04/2018)
- The business start-up portal of the German Federal Ministry of Economic Affairs and Energy with additional (practical) tips especially for founders: see here
- For “mixed activities” and especially concerning the assessment of partnerships: see here
For more information about freelance/independent professions, please see here.
Where do I register my business?
Registering your business or freelance/independent profession requires a business registration. This business registration must be done at your local trade licensing or regulatory office. In smaller municipalities, the trade licensing office is often at the town hall.
Alternatively, you can register your trade fully electronically here.
Which documents do I have to submit?
Usually, a business registration form and a copy of your ID must be submitted to the trade licensing office. Depending on the type of activity (e.g. craft or trade requiring a licence) or on the selection of the legal form (e.g. limited liability company (GmbH)), additional documents may also be required by the competent authorities.
The following documents usually have to be submitted:
- Completed business registration form
- Proof of identity (ID or passport)
- For foreign (non-EU) businesspersons: a copy of the residency permit required for the registered activity
Additional documents may be required in the following cases:
For example, if:
- you want to perform activities requiring a licence as a skilled tradesperson (e.g. roofer or bricklayer). Additional information about this can be found under “Register of Skilled Trades”.
- you want to found your business under a certain legal form (e.g. OHG or GmbH). Additional information can be found under “Setting up a business”.
- your business requires a permit (e.g. to work in security or in the taxi trade or the itinerant trade), you must provide:
- Certificate of conduct (document type O) for submission to the authorities
- Information from the German Central Register of Companies
- Proficiency examination through the Chamber of Commerce and Industry
- If necessary, additional documents
- you want to open a restaurant. Detailed information about this can be found under “Opening a restaurant”.
Conclusion: The documents you have to submit will depend on your selected service or your activities and the selected legal form.
|For natural persons and shareholders of partnerships with powers of representation who are not legal persons||26|
|For legal persons, even if they are shareholders of partnerships with powers of representation||33|
|For every additional legal representative in the case of legal persons||13|
|For the issuance of a second copy of the business registration for the businessperson||15|
* in accordance with rate position 12.1.3 of the general fee rate for the General Administrative Fee Ordinance of North Rhine-Westphalia [Allgemeine Verwaltungsgebührenordnung Nordrhein-Westfalen, AVerwGebO NRW]
Obtaining additional documents (e.g. a certificate of conduct) may result in additional costs.
German Code of Trade and Commerce [Gewerbeordnung, GewO], especially Section 14 of the German Code of Trade and Commerce.
Length of procedure
he legally specified processing time for businesses requiring a permit is three months. If your business does not require a permit, but only needs to be registered, you should receive confirmation of your business registration within three days.
This period will start when all documents have been received and may be extended once by an appropriate period of time if justified by the difficulty of the matter. This extension must be explained by the competent authorities and the applicant will be informed in good time.
A requested permit will be considered granted once this deadline has expired (assumption of approval).
At your request, the competent authorities will confirm the granting of the assumption of approval.
Which other authorities must or will be informed?
The trade licensing office will normally forward your business registration to other bodies, such as the tax office, the Chamber of Crafts and Skilled Trades or the Chamber of Commerce and Industry, the register court and the employers’ liability insurance association.
Tax Office – tax assessment survey (tax number)
After registering their business, businesspersons need to fill in a tax assessment survey from their tax office. This should be done electronically via the ElsterOnline-Portal (www.elsteronline.de). Once you have submitted the completed survey, the tax office will issue you with a tax number.
Click here for the online form: Fragebogen zur steuerlichen Erfassung.
The survey also allows you to make use of the so-called small business regulation. Small businesses enjoy certain benefits. They are exempt from VAT and may perform “simple” accounting. More information on the requirements for being able to use the small business regulation (e.g. revenue limits) is provided in the business start-up portal of the German Federal Ministry of Economic Affairs and Energy: see here.
Chamber of Commerce and Industry (CCI) / Chamber of Crafts and Skilled Trades (CCST)
By registering your business activities, you will also automatically become a member of the Chamber of Commerce and Industry or, if you have registered a skilled trade business, a member of the Chamber of Crafts and Skilled Trades. These chambers see themselves as representatives of the interests of German businesses. Membership fees will be charged.
Employers’ Liability Insurance Association
The employers’ liability insurance associations (statutory accident insurance providers) will normally be informed about your business registration. Nonetheless, businesspersons should also take the initiative and register their business with the competent accident insurance provider within one week. This reporting obligation (Section 192 of Book VII of the German Social Code [Sozialgesetzbuch, SGB]) applies irrespective of the fact that the statutory accident insurance provider receives a copy of every business registration. Usually, a commercial employers’ liability insurance association will be responsible for business start-ups. Commercial employers’ liability insurance associations are normally organised according to the industry they deal with; addresses can be found here.
Taking on employees – requesting a company registration number and registering for social security
If you take on employees in your business, please note the following:
• You must apply for a company registration number from the German Federal Employment Agency
• You must register your employees for social security
Company registration number
If you take on employees who are subject to social security contributions, part-time workers (up to EUR 450) or trainees, you will need a company registration number. This eight-digit number can be requested from the company registration number service of the German Federal Employment Agency.
The application may be made in writing or by telephone, fax or e-mail. The eight-digit company registration number is the basis for registering employees for social security. It will be used to register and deregister your employees from their health insurance provider and to deduct their contributions to the health, pension and unemployment insurance schemes. It is also required for company-related work permits or accident reports to the employers’ liability insurance association.
Employees are normally required to pay social security contributions (to the statutory pension, health, nursing care and unemployment insurance providers). Social security contributions are collected by the health insurance providers. Please therefore contact your employee’s health insurance provider to register your employee. Ask them to issue your employee’s social security card. Most health insurance providers offer consultation services for employers with regard to their social security obligations.
More information is available here.
Simple online business registration through the Point of Single Contact for NRW
If you have any questions, please do not hesitate to contact us – the Point of Single Contact for NRW. On request, we can also coordinate your business registration by electronic means. Our services are free.