Germany's first real decision isn't about legal structure so much as whether you count as a Freiberufler, a freelance professional, or a Gewerbetreibender, someone running a commercial trade. That distinction decides whether you register with the local trade office at all, and it shapes your taxes from day one. Here's what it takes to start a business in Germany in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Freiberufler (freelance professional). Certain regulated and creative professions, consulting, writing, design, medicine, law, among others, are legally exempt from trade registration and trade tax. Whether your work qualifies isn't always obvious; the Finanzamt decides borderline cases.
- Einzelunternehmer (sole proprietor). The default for commercial activity that doesn't qualify as freelance work. You and the business are the same legal entity, with unlimited personal liability.
- UG or GmbH. Both are limited liability companies. A UG (mini-GmbH) can start with as little as €1 in share capital; a GmbH needs €25,000 in share capital, with at least €12,500 paid in before registration. Both require notarization.
2. Register your business
Freiberufler
You skip the trade office entirely and register directly with your local Finanzamt using the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung). There's no fee.
Einzelunternehmer, UG, and GmbH
You'll file a Gewerbeanmeldung at your local trade office (Gewerbeamt), which costs €15 to €65 depending on the city; many cities, including Berlin, Hamburg, Munich, Cologne, and Frankfurt, now accept this online. For a UG or GmbH, the Gewerbeanmeldung comes after two earlier steps: notarizing your company's formation documents (a standardized Musterprotokoll runs roughly €800 all-in for a simple GmbH; a custom Gesellschaftsvertrag costs more), and entry in the Handelsregister (commercial register) through the local Amtsgericht, a separate ~€150 court fee. The full sequence from decision to operating company typically takes 3 to 6 weeks.
3. Get your Steuernummer
A Steuernummer (tax number) from your local Finanzamt is free and comes from the same tax registration questionnaire every Freiberufler, sole proprietor, UG, and GmbH has to file. If you'll be charging VAT, you'll also want a USt-IdNr (VAT identification number), issued separately and free by the Bundeszentralamt für Steuern.
4. Check licenses and permits
Germany doesn't issue a single national business license. What you need depends on your industry and city: regulated trades generally need registration with the local Handwerkskammer (chamber of crafts), certain industries like food service and childcare carry their own permits, and local authorities may add their own requirements on top. Check with your Gewerbeamt directly for anything industry-specific.
5. Understand German taxes
Freiberufler and sole proprietors pay personal income tax (Einkommensteuer), progressive from 14% up to 42%, with a top rate of 45% at higher incomes, and no tax at all on the first €12,348 of income for 2026. A 5.5% solidarity surcharge only applies once your income tax bill itself exceeds roughly €20,350 as a single filer, which affects a minority of higher earners.
Commercial businesses, sole proprietors, UGs, and GmbHs alike, also owe trade tax (Gewerbesteuer), a local tax with a €24,500 tax-free allowance for sole proprietors and partnerships. It's calculated as a 3.5% base rate multiplied by a municipal multiplier that ranges from 200% to 900%, working out to an effective 7% to roughly 17% or more depending on where you're based; sole proprietors can partially credit this against their income tax. Freiberufler are exempt from trade tax entirely.
GmbHs and UGs pay corporate tax (Körperschaftsteuer) at a flat 15%, plus a 5.5% solidarity surcharge on that amount, on top of the same trade tax described above. The combined corporate tax burden typically lands somewhere between 23% and 33%, averaging around 30% nationally.
VAT (Umsatzsteuer, still often called by its older name Mehrwertsteuer) is 19% standard, with a 7% reduced rate for items like books, food, and local public transport. Very small businesses can opt out of charging VAT at all under the Kleinunternehmerregelung (small business exemption) if their revenue stays under the relevant threshold.
6. Stay compliant
Every Gewerbetreibender, UG, and GmbH files an annual trade tax return (Gewerbesteuererklärung) through ELSTER, Germany's electronic tax filing system. GmbHs and UGs also file an annual corporate tax return and publish annual financial statements (Jahresabschluss) to the Bundesanzeiger, the electronic federal gazette, which is mandatory and publicly searchable. VAT returns are typically filed monthly or quarterly depending on your turnover.
Germany business costs at a glance
| Item | Cost |
|---|---|
| Freiberufler registration (Finanzamt only) | Free |
| Gewerbeanmeldung (sole proprietor/commercial) | €15 to €65 |
| GmbH notarization + Handelsregister entry | ~€800 to €2,000+ |
| GmbH minimum share capital | €25,000 (€12,500 paid in) |
| UG minimum share capital | From €1 |
| Steuernummer / USt-IdNr | Free |
| Corporate tax + solidarity surcharge (GmbH/UG) | ~15.8% |
| Trade tax (Gewerbesteuer) | ~7% to 17%+ depending on municipality |
| VAT (standard rate) | 19% |
Frequently asked questions
What's the difference between a Freiberufler and a Gewerbe in Germany?
Freiberufler covers certain regulated and creative professions exempt from trade registration and trade tax. A Gewerbe (commercial trade) requires registering at the local trade office and paying trade tax on top of income tax.
How much capital do I need to start a GmbH in Germany?
€25,000, with at least €12,500 paid in before registration. A UG (mini-GmbH) can start with as little as €1.
How long does it take to register a business in Germany?
A Freiberufler can register the same day directly with the Finanzamt. A GmbH or UG typically takes 3 to 6 weeks once notarization and Handelsregister entry are included.
What's the corporate tax rate for a GmbH in Germany?
A flat 15% corporate tax plus solidarity surcharge (about 15.8% combined), plus municipal trade tax that varies 7% to 17% or more by location, for a combined burden typically between 23% and 33%.
Do freelancers in Germany pay trade tax?
No. Freiberufler are exempt from trade tax (Gewerbesteuer) entirely, unlike sole proprietors carrying out commercial activity.
Fees and rates above come from the Finanzamt, local Gewerbeämter, and the Bundeszentralamt für Steuern as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a German-qualified Steuerberater or lawyer about your specific situation.