Introduction
Starting a business in Germany might initially seem like a great idea: a robust market, plenty of potential clients, and a booming startup ecosystem. However, for many, the reality is quite different. Carmine Paolino, an entrepreneur, shares his experience: after spending €9600 and waiting 152 days, he still cannot send an invoice. Let's delve into his journey to understand the bureaucratic challenges he faced.
The Beginning: The Idea Takes Shape
It all begins in January when Carmine decides to set up his second company in Germany. Very quickly, he encounters the administrative complexity of the country. From the first call with a law firm, the costs start accumulating. By February, he signs the mandate and begins drafting the articles of PlentyLabs UG & Co. KG.
Administrative Steps: An Obstacle Course
The incorporation process stretches over several months. Between finding a notary, registering with the commercial register, and tax procedures, every step comes with its share of costs and delays. Here's a breakdown of the accumulated costs:
- Notary: €1,575.24
- Locked share capital: €2,000
- Court advance: €300
- Commercial registration: €260
- Legal fees: €4,462.50
- Accounting software: €426.97
The Blockage: The Endless Wait for the VAT Number
Despite the company's registration, Carmine finds himself stuck without a VAT number. This number is crucial for invoicing his overseas clients using the reverse charge mechanism. After seven weeks of waiting, still nothing. Meanwhile, all the involved service providers managed to invoice him, but he cannot do the same with his clients.
Why Such a Delay?
Delays in obtaining the VAT number can be attributed to several factors:
- The volume of administrative requests in Germany.
- The complexity of the tax system requiring thorough checks.
- Bureaucratic inefficiencies.
Conclusion: What to Take Away?
Founding a company in Germany requires meticulous preparation and immense patience. Entrepreneurs must be ready to face significant administrative challenges, both in terms of costs and time. However, with a good strategy, these obstacles can be overcome.
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