FAQ

About

Start-ups from abroad – How to open a branch office in Munich
  • Do you have a start-up and are you planning to settle in Munich?
  • Do you live abroad and are planning to open a business in Munich?

Finding the right contact person

Digital information service

The Point of Single Contact (PSC) can support foreign companies planning to set up a branch office in Munich by providing the relevant basic information such as necessary procedures and formalities required for taking up and performing your planned services, contact details of the competent authorities as well as supportive associations and institutions. Visit the PSC website
Telephone +49 89 233-22080 | E-Mail: psc@muenchen.de

CCI - Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK für München und Oberbayern)

Invest in Bavaria - the Business Promotion Agency of the State of Bavaria

Invest in Bavaria supports companies from Germany and abroad and from a wide range of sectors. From location search to getting access to relevant partners and networks for your business. Their cross cultural teams provide you with all the important information, valuable contacts and customized support for your expansion project. The “Ois Easy” – a programme for start-ups from abroad is specifically designed for start-ups from abroad who want to open a new branch or a new office in Germany and establish themselves on the German market in the long term. Visit the website and find your contact person here.

Germany Trade and Invest - Investment Guide to Germany

Germany Trade & Invest (GTAI) is the economic development agency of the Federal Republic of Germany. With more than 50 offices in Germany and abroad, and its network of partners throughout the world, GTAI supports German companies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany. For initial information on entry regulations, company set up, corporation taxation, employees and social security and incentive programs  please see the GTAI "Investment Guide to Germany".

Need help to find a tax adviser or lawyer?

We have listed several options to help you with your search.

Do you you own a valid residence permit for the purpose of self-employed activity in Germany?

More information on the residence permit

 

Business idea

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Business or liberal profession

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

How do I register my freelancing activity in Munich?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.  Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende]
  • or members of the liberal professions [Freie Berufe].

Different rules apply to these two categories. It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Are you a member of the liberal professions? Register with Tax Office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

Business plan

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Company insurance

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Development and growth

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Einzelhandel

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

Financing and public support

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

First steps

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Start-ups from abroad – How to open a branch office in Munich
  • Do you have a start-up and are you planning to settle in Munich?
  • Do you live abroad and are planning to open a business in Munich?

Finding the right contact person

Digital information service

The Point of Single Contact (PSC) can support foreign companies planning to set up a branch office in Munich by providing the relevant basic information such as necessary procedures and formalities required for taking up and performing your planned services, contact details of the competent authorities as well as supportive associations and institutions. Visit the PSC website
Telephone +49 89 233-22080 | E-Mail: psc@muenchen.de

CCI - Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK für München und Oberbayern)

Invest in Bavaria - the Business Promotion Agency of the State of Bavaria

Invest in Bavaria supports companies from Germany and abroad and from a wide range of sectors. From location search to getting access to relevant partners and networks for your business. Their cross cultural teams provide you with all the important information, valuable contacts and customized support for your expansion project. The “Ois Easy” – a programme for start-ups from abroad is specifically designed for start-ups from abroad who want to open a new branch or a new office in Germany and establish themselves on the German market in the long term. Visit the website and find your contact person here.

Germany Trade and Invest - Investment Guide to Germany

Germany Trade & Invest (GTAI) is the economic development agency of the Federal Republic of Germany. With more than 50 offices in Germany and abroad, and its network of partners throughout the world, GTAI supports German companies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany. For initial information on entry regulations, company set up, corporation taxation, employees and social security and incentive programs  please see the GTAI "Investment Guide to Germany".

Need help to find a tax adviser or lawyer?

We have listed several options to help you with your search.

Do you you own a valid residence permit for the purpose of self-employed activity in Germany?

More information on the residence permit

 

Food businesses

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

Industries

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

International topics

Start-ups from abroad – How to open a branch office in Munich
  • Do you have a start-up and are you planning to settle in Munich?
  • Do you live abroad and are planning to open a business in Munich?

Finding the right contact person

Digital information service

The Point of Single Contact (PSC) can support foreign companies planning to set up a branch office in Munich by providing the relevant basic information such as necessary procedures and formalities required for taking up and performing your planned services, contact details of the competent authorities as well as supportive associations and institutions. Visit the PSC website
Telephone +49 89 233-22080 | E-Mail: psc@muenchen.de

CCI - Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK für München und Oberbayern)

Invest in Bavaria - the Business Promotion Agency of the State of Bavaria

Invest in Bavaria supports companies from Germany and abroad and from a wide range of sectors. From location search to getting access to relevant partners and networks for your business. Their cross cultural teams provide you with all the important information, valuable contacts and customized support for your expansion project. The “Ois Easy” – a programme for start-ups from abroad is specifically designed for start-ups from abroad who want to open a new branch or a new office in Germany and establish themselves on the German market in the long term. Visit the website and find your contact person here.

Germany Trade and Invest - Investment Guide to Germany

Germany Trade & Invest (GTAI) is the economic development agency of the Federal Republic of Germany. With more than 50 offices in Germany and abroad, and its network of partners throughout the world, GTAI supports German companies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany. For initial information on entry regulations, company set up, corporation taxation, employees and social security and incentive programs  please see the GTAI "Investment Guide to Germany".

Need help to find a tax adviser or lawyer?

We have listed several options to help you with your search.

Do you you own a valid residence permit for the purpose of self-employed activity in Germany?

More information on the residence permit

 

Laws and contracts

Small business, small business owner regulation – what is the difference?

What is a small business – Kleinunternehmen?

A small business – Kleinunternehmen in German – is not a separate legal form or defined type of business. The term is often used colloquially. It is associated with a self-employed individual who is both the owner and the workforce of their business. Other characteristics are low risk, lower management and administrative costs and a manageable turnover. This can all be true, but it doesn't have to be.  The European Commission offers an official definition of small and medium-sized enterprises (SMEs). These thresholds are not necessarily "small".

However, in the world of business, the following terms are more relevant:
  • small trading business – Kleingewerbe
  • small business owner regulation – Kleinunternehmerregelung

The two have nothing to do with each other thematically, but are often confused.

Will I run a small trading business – Kleingewerbe?

You have a Kleingewerbe if you register a trade and become self-employed as a sole proprietor and expect a profit of less than 80,000 euros and a turnover of less than 800,000 euros per year. You are therefore exempt from the provisions of the German Commercial Code – Handelsgesetzbuch HGB – and the obligation to be entered in the commercial register – Handelsregister – via a notary.

  • The German Civil Code – BGB Bürgerliches Gesetzbuch applies to you.
  • Single-entry bookkeeping with net income statements is sufficient to determine profits for the tax office.

An important aspect of Kleingewerbe is therefore the way in which profits are determined. If you exceed the above-mentioned profit or turnover threshold as a business trading sole proprietor, you must determine your profit using double-entry bookkeeping, which also includes the annual preparation of a balance sheet and a profit and loss account. This also involves an entry in the commercial register – Handelsregister – via a notary.

The term "small business" or Kleingewerbe says nothing about whether you show VAT on your invoices or make use of the small business owner regulation.

How do I apply for the small business owner regulation – Kleinunternehmerregelung?

Are you planning to become self-employed and have you clarified whether your planned self-employed activity is classified as a trade-like business or a liberal profession? When registering with the tax office you can opt for the small business owner regulation – Kleinunternehmerregelung. The small business regulation is a statutory simplification regulation for companies with low turnover. This means that VAT is not charged. You can make use of the small business owner regulation if your total turnover did not exceed 22,000 euros in the previous calendar year and is not expected to exceed 50,000 euros  in the current calendar year.

If you start your business activity during the course of the calendar year, the turnover limit of 22,000 euros applies for the application of the small business regulation. In this case, you must estimate the expected turnover for the start-up year as part of a forecast. To check whether the limit of 22,000 euros is likely to be met in the year of foundation and thus whether the small business regulation can be applied, the estimated total turnover must be extrapolated to the full calendar year.  Examples are provided by Gründerplattform, the Chamber of Commerce and Industry  or the Tax Office.

If you apply the small business owner regulation, you may not show VAT separately in your invoices. Instead include a note, such as "Gemäß § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.“ Please note that to due to the fact that VAT is not charged, you cannot claim an input tax deduction for purchased services.

Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.

Further English language information and examples are available on the website of this tax office. Turn to the Munich tax office for general tax information. Check our page on Taxes and Accounting on how to locate tax professionals to advice you.

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Legal structure

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Location and premises

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

Mobile Gastronomie 

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

Planning

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

How do I register my freelancing activity in Munich?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.  Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende]
  • or members of the liberal professions [Freie Berufe].

Different rules apply to these two categories. It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Are you a member of the liberal professions? Register with Tax Office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Registration

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Tax numbers in Germany and their purposes

In Germany there are are different tax numbers that serve different purposes.

  • Tax-ID number: The Steuer-ID (steuerliche Identifikationsnummer) is a 11 digit number. It is  assigned for the purpose of uniquely identifying a natural person in administrative proceedings. It is permanently valid and does not change, for example, if you move house, change your name or change your marital status. The Steuer-ID  is issued by the Federal Central Tax Office.
  • Tax number: The Steuernummer consists of 10 to 11 digits, which are usually separated by two slashes. It is issued by your local tax office as part of the tax registration process, for example if you are employed or register for self-employment with the tax office. It is possible to have more than one tax number, for example if you are employed and also work as a self-employed person.
  • VAT-ID number: The Umsatzsteuer-ID (Umsatzsteuer-Identifikationsnummer, USt-IdNr.) is a stand-alone number that businesses receive in addition to the tax number of their company. It begins with the EU country code, 'DE' for Germany, followed by up to 12 digits. When registering your self-employment with the local tax office by completing the tax registration questionnaire you can apply for the VAT-ID number in this form. The VAT-ID number is issued by the Federal Central Tax Office. Businesses who provide or receive goods and services within the EU single market require a VAT-ID number for processing. This allows companies to prove to each other that they actually have entrepreneur status and are not private individuals. Many online marketplaces also require their retailers to provide a VAT ID. If a VAT ID has been issued, it must appear on the company's website in the legal notice (Impressum). Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.
  • Economic ID number: The new Wirtschafts-ID (Wirtschafts-Identifikationsnummer, W-IdNr.) will be issued by the Federal Central Tax Office. It is not available, yet. In the future, it will apply to economically active people and will primarily be used by the tax authorities. Economically active people are, for example, natural persons who pursue self-employment, legal persons or associations of persons. Tax authorities will thus be able to correctly assign economically active legal entities to the respective natural persons. The W-IdNr. will consist of the letters 'DE' and 9 digits and thus correspond in its form to the VAT-ID number. The Federal Central Tax Office will issue a W-IdNr. at the request of the competent tax authority and notify you without you having to submit an application.

[icon name="icon-info"] Taxes and Accounting

 

Small business, small business owner regulation – what is the difference?

What is a small business – Kleinunternehmen?

A small business – Kleinunternehmen in German – is not a separate legal form or defined type of business. The term is often used colloquially. It is associated with a self-employed individual who is both the owner and the workforce of their business. Other characteristics are low risk, lower management and administrative costs and a manageable turnover. This can all be true, but it doesn't have to be.  The European Commission offers an official definition of small and medium-sized enterprises (SMEs). These thresholds are not necessarily "small".

However, in the world of business, the following terms are more relevant:
  • small trading business – Kleingewerbe
  • small business owner regulation – Kleinunternehmerregelung

The two have nothing to do with each other thematically, but are often confused.

Will I run a small trading business – Kleingewerbe?

You have a Kleingewerbe if you register a trade and become self-employed as a sole proprietor and expect a profit of less than 80,000 euros and a turnover of less than 800,000 euros per year. You are therefore exempt from the provisions of the German Commercial Code – Handelsgesetzbuch HGB – and the obligation to be entered in the commercial register – Handelsregister – via a notary.

  • The German Civil Code – BGB Bürgerliches Gesetzbuch applies to you.
  • Single-entry bookkeeping with net income statements is sufficient to determine profits for the tax office.

An important aspect of Kleingewerbe is therefore the way in which profits are determined. If you exceed the above-mentioned profit or turnover threshold as a business trading sole proprietor, you must determine your profit using double-entry bookkeeping, which also includes the annual preparation of a balance sheet and a profit and loss account. This also involves an entry in the commercial register – Handelsregister – via a notary.

The term "small business" or Kleingewerbe says nothing about whether you show VAT on your invoices or make use of the small business owner regulation.

How do I apply for the small business owner regulation – Kleinunternehmerregelung?

Are you planning to become self-employed and have you clarified whether your planned self-employed activity is classified as a trade-like business or a liberal profession? When registering with the tax office you can opt for the small business owner regulation – Kleinunternehmerregelung. The small business regulation is a statutory simplification regulation for companies with low turnover. This means that VAT is not charged. You can make use of the small business owner regulation if your total turnover did not exceed 22,000 euros in the previous calendar year and is not expected to exceed 50,000 euros  in the current calendar year.

If you start your business activity during the course of the calendar year, the turnover limit of 22,000 euros applies for the application of the small business regulation. In this case, you must estimate the expected turnover for the start-up year as part of a forecast. To check whether the limit of 22,000 euros is likely to be met in the year of foundation and thus whether the small business regulation can be applied, the estimated total turnover must be extrapolated to the full calendar year.  Examples are provided by Gründerplattform, the Chamber of Commerce and Industry  or the Tax Office.

If you apply the small business owner regulation, you may not show VAT separately in your invoices. Instead include a note, such as "Gemäß § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.“ Please note that to due to the fact that VAT is not charged, you cannot claim an input tax deduction for purchased services.

Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.

Further English language information and examples are available on the website of this tax office. Turn to the Munich tax office for general tax information. Check our page on Taxes and Accounting on how to locate tax professionals to advice you.

Can I start a business out of my home?

Many entrepreneurs start working from home and use a part of  their apartment or house for their business. You should inform your landlord about your plans. Also contact the Amt für Wohnen und Migration, the municipal Housing and Migration Office, whether you are actually allowed to use your home for business purposes or whether you need a permit to do so. If you are a home owner, you should also obtain approval for working from home in case of doubt.

You also need to consider building, fire protection, and industry-specific regulations such as requirements for practices and rooms in which some form of childcare is offered, or  food hygiene regulations for anyone planning to store, process or sell food.

How do I register my business?

Before you launch your new business, you are required to register it with the Trade Office [Gewerbeamt] and the Tax Office [Finanzamt].

Step 1: Register your business with the Trade Office [Gewerbeamt]

There are different options how to submit your business registration in Munich:

1. Register your business online

You can register your business online via the München-Portal. You are able to upload additional documents if required. For the online registration process you will need to create a personal BayernID first.

2. Register your business by mail or e-mail

Complete the business registration form [Gewerbeanmeldung”] (PDF, 144 KB) and submit it to the Trade Office at the Department of Public Order [Kreisverwaltungsreferat - KVR] by mail or e-mail together with all required documents. Use our English language fill-in help to guide you through the business registration form.

3. Register in person at the Trade Office after setting up an appointment

Check the online appointment tool for available appointments and book yourself an available time slot for your business registration. If there are no time slots available we recommend to check again later to see if new time slots have been activated.

[icon name="icon-standort“]Kreisverwaltungsreferat (KVR), Hauptabteilung III, Gewerbemeldungen, Implerstraße 11, 81371 München

Which documents do I need to register my business?

In Germany, everyone is essentially free to register a business.

But: Some trades or businesses require special permits or monitoring [erlaubnispflichtige und überwachungsbedürftige Gewerbe]. Many skilled craft trades [zulassungspflichtige Gewerbe im Handwerk] require a permit or license or from the local  Chamber of Skilled Crafts [Handwerkskammer - HWK]. An exception applies to those activities that either qualify as "zulassungsfreie und handwerksähnliche Tätigkeiten" or are not regarded as part of the skilled craft trade at all.

Moreover, check if you have a valid residence permit that allows you to go self-employed.

The Trade Office lists the documents required for a business registration, such as:

  • Completed business registration form [Gewerbeanmeldung]
  • a copy of your identity document such as an identity card [Personalausweis] or passport [Reisepass]
  • if you are not a national of an EU country: valid residence permit including a permit entitling them to go self-employed
  • Supplement for authorized representatives: letter of attorney, competent proof of identification of the principal and the authorized representative
  • Supplement for minors: agreement of the parent or legal guardian (for sideline businesses) or permission of the guardianship court [Vormundschaftsgericht] (for main businesses)
  • entities listed in the registers of companies, cooperatives and partnerships or of associations [Handelsregister, Genossenschaftsregister, Vereinsregister] are required to submit a copy of an up-to-date and complete excerpt from their register
  • trades requiring a special permit [erlaubnispflichtige und überwachungsbedürftige Gewerbe]: submit a copy of the permit
  • skilled craft trades requiring a license [zulassungspflichtige Gewerbe im Handwerk]: submit a copy of the license [Handwerkskarte]

After submitting your business registration form and documents, the Trade Office will issue an acknowledgement of receipt [Gewerbeschein]. Please note that the "Gewerbeschein" does not replace any legally required permits or licenses.

When do I register my business?

  • You are obliged to register your employment either before you start operating it or at the same time as starting it.

Fees

  • Registration in Munich costs about EUR 50 to 60 depending on the legal structure of your business.
  • Additional fees apply when permits and licenses are required.

Forms

[icon name="icon-download"] Business registration form [Gewerbeanmeldung] (PDF, 145 KB), available in German language only

[icon name="icon-download"] Fill-in help with explanations in English language

Learn more about business registration from the Munich Trade Office:

[icon name="icon-weltkugel"] www.muenchen.de

[icon name="icon-info"] Telefon: 089 233-96030

 

Step 2: Register your business with the Tax Office [Finanzamt]

You have to inform the tax office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

[icon name="icon-tipp“]Tip

Are you considering to start self-employed work as a member of the liberal professions? Find out first if you qualify.

How do I register my freelancing activity in Munich?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.  Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende]
  • or members of the liberal professions [Freie Berufe].

Different rules apply to these two categories. It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Are you a member of the liberal professions? Register with Tax Office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Residence permit

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Run & Grow

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Self-employment

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Social insurance

False self-employment or Scheinselbstständigkeit

False self-employment or "Scheinselbstständigkeit"
What is known as “false” or "bogus" self-employment ("Scheinselbständigkeit") may exist if someone claims to be self-employed, although their relationship to the client points to dependent employment. It is often difficult to distinguish between genuine self-employment and regular employment. Multiple factors from several fields of law need to be taken in account: employment law, social security law and tax law. An English language example is available from the Office for the Equal Treatment of EU Workers.

Employee-like employment or "arbeitnehmerähnlichen Selbstständigkeit"
Are you are legitimately self-employed but work only for one client? Then you might have to join statutory pension insurance. Statutory pension insurance is compulsory for certain occupational groups such as teachers, artists, nurses, licensed craftsmen and those who have mainly only one client. In the statutory pension they are known as "Selbstständige mit einem Auftraggeber". Learn more about pension insurance and who to contact for professional advice.

Beware: False self-employment and employee-like employment can lead to unpleasant consequences for both the client as well as the entrepreneur.

For advice and further information please see our feature laws and contracts.

Specific Issues

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Bezirksinspektion

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] belong to the District Administration Service (Kreisverwaltungsreferat, KVR), section III "Gewerbeangelegenheiten und Verbraucherschutz" focusing on commercial and trade affairs and consumer protection.

The Licenses and Consumer Services inspectors offices [Bezirksinspektion] are based in Munich’s city districts. These 25 city districts are grouped together to five areas, each one with its own local Bezirksinspektion:

  1. Bezirksinspektion Mitte
    districts in the city center # 1, 2, 3
    address: Tal 31, phone: +49 89 233-32400, email bi-mitte.kvr@muenchen.de
  2. Bezirksinspektion Süd
    districts in the south # 6, 7, 8, 17, 18, 19, 20
    address: Implerstrasse 11, phone: +49 89 233-39888, email bi-sued.kvr@muenchen.de
  3. Bezirksinspektion West
    districts in the west # 9, 21, 22, 23, 25
    address: Landsberger Strasse 486, phone: +49 89 233-46550, email bi-west.kvr@muenchen.de
  4. Bezirksinspektion Ost
    districts in the east # 5, 13, 14, 15, 16
    address: Trausnitzstrass 33, phone: +49 89 233-63500, email bi-ost.kvr@muenchen.de
  5. Bezirksinspektion Nord
    districts in the north # 4, 10, 11, 12, 24
    address: Hanauer Strasse 56, phone: +49 89 233-38600, email bi-nord.kvr@muenchen.de
  • Learn more about Munich’s city districts
  • Are you not sure which Munich street address belongs to which city district? Scroll down this page until header “Ermitteln der für Sie zuständigen Stelle” and enter the street address of your future premises into the entry field.

Entrepreneurs turn to their Bezirksinspektion for guidance and permits such as:

A. Planning to start a restaurant business, coffee shop, food stall, canteen, food truck, food carts, coffee-bike, food delivery service, night club

B. Home-based food businesses

C. Food hygiene

D. Food Labeling

E. Meat, poultry meat, dairy and other establishments

F. Using public ground such as roads, sidewalks, places and pedestrian zones

Are you planning to use public ground for your business such as for parking a food truck or coffee bike, for displaying goods, setting up plant containers, outdoor seating or bike racks outside of your business? Are you going to sell fruit, flowers, roasted nuts, or self-crafted artwork or newspapers from a stall or a temporary setup? This includes stalls demonstration and promoting products in the pedestrian area of the Munich Old Town.  This type of land use requires a permit from your local Bezirksinspektion.

Please note that according to the City of Munich’s special regulation § 20 Abs. 6 Sondernutzungsrichtlinien mobile vendors such as snack vans, food trucks, food carts, coffee bikes and others on public ground may not park on public ground. Selling from a vendor’s tray is also not allowed.

Is your mobile vending operation going to be located on private property? Before applying for permits or licences from Bezirksinspektion verify if your preferred location is a good candidate for zoning approval. Zoning refers to municipal or local laws and regulations that govern how land may be used. Each zone allows certain activities or uses and prohibits others. The local construction authority [Lokalbaukommission] based at the Munich Department of Urban Planning enforces these zoning regulations, reviews projects and proposals for compliance, and issues certain permits. Please check with Lokalbaukommission to determine if sales and service uses are allowed at your preferred location. Confirm property owner consent, too. Entrepreneurs are strongly encouraged to obtain zoning approval before signing a lease.

Are you planing a home-based business? To find out whether your home complies to residential zoning rules allow, please contact Lokalbaukommission. Depending on your type of business, you may also need additional special permits relating to signage, noise levels or health issues.

Learn more about legal prerequisites and building regulations for commercial use of premises in Munich on our website.

G. Food supplement, cosmetics, tobacco, e-cigarettes, toys, cleaning agents, glasses, clothing, tableware and over-the-counter medicines, labeling of fur

Contact your Licenses and Consumer Services inspectors offices [Bezirksinspektion] if you have any questions on these issues. Information leaflets are available for download, too.

[icon name="icon-info"] Other useful contacts

As the owner of a food business, you have a responsibility to ensure that you do not contribute to any build-up of restaurant fats, oils, grease and starches in wastewater. Grease separators are required in businesses and facilities where the quantities of greasy dirty or rinse water produced exceed the rates normally associated with private households. Contact “Münchner Stadtentwässerung”, the municipal enterprise in the wastewater management sector, for advice and guidance.

Direct any questions on commercial waste disposal to the waste management corporation of Munich (Abfallwirtschaftsbetrieb München).

Start-ups from abroad – How to open a branch office in Munich
  • Do you have a start-up and are you planning to settle in Munich?
  • Do you live abroad and are planning to open a business in Munich?

Finding the right contact person

Digital information service

The Point of Single Contact (PSC) can support foreign companies planning to set up a branch office in Munich by providing the relevant basic information such as necessary procedures and formalities required for taking up and performing your planned services, contact details of the competent authorities as well as supportive associations and institutions. Visit the PSC website
Telephone +49 89 233-22080 | E-Mail: psc@muenchen.de

CCI - Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK für München und Oberbayern)

Invest in Bavaria - the Business Promotion Agency of the State of Bavaria

Invest in Bavaria supports companies from Germany and abroad and from a wide range of sectors. From location search to getting access to relevant partners and networks for your business. Their cross cultural teams provide you with all the important information, valuable contacts and customized support for your expansion project. The “Ois Easy” – a programme for start-ups from abroad is specifically designed for start-ups from abroad who want to open a new branch or a new office in Germany and establish themselves on the German market in the long term. Visit the website and find your contact person here.

Germany Trade and Invest - Investment Guide to Germany

Germany Trade & Invest (GTAI) is the economic development agency of the Federal Republic of Germany. With more than 50 offices in Germany and abroad, and its network of partners throughout the world, GTAI supports German companies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany. For initial information on entry regulations, company set up, corporation taxation, employees and social security and incentive programs  please see the GTAI "Investment Guide to Germany".

Need help to find a tax adviser or lawyer?

We have listed several options to help you with your search.

Do you you own a valid residence permit for the purpose of self-employed activity in Germany?

More information on the residence permit

 

Starting up

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

False self-employment or Scheinselbstständigkeit

False self-employment or "Scheinselbstständigkeit"
What is known as “false” or "bogus" self-employment ("Scheinselbständigkeit") may exist if someone claims to be self-employed, although their relationship to the client points to dependent employment. It is often difficult to distinguish between genuine self-employment and regular employment. Multiple factors from several fields of law need to be taken in account: employment law, social security law and tax law. An English language example is available from the Office for the Equal Treatment of EU Workers.

Employee-like employment or "arbeitnehmerähnlichen Selbstständigkeit"
Are you are legitimately self-employed but work only for one client? Then you might have to join statutory pension insurance. Statutory pension insurance is compulsory for certain occupational groups such as teachers, artists, nurses, licensed craftsmen and those who have mainly only one client. In the statutory pension they are known as "Selbstständige mit einem Auftraggeber". Learn more about pension insurance and who to contact for professional advice.

Beware: False self-employment and employee-like employment can lead to unpleasant consequences for both the client as well as the entrepreneur.

For advice and further information please see our feature laws and contracts.

Tax numbers in Germany and their purposes

In Germany there are are different tax numbers that serve different purposes.

  • Tax-ID number: The Steuer-ID (steuerliche Identifikationsnummer) is a 11 digit number. It is  assigned for the purpose of uniquely identifying a natural person in administrative proceedings. It is permanently valid and does not change, for example, if you move house, change your name or change your marital status. The Steuer-ID  is issued by the Federal Central Tax Office.
  • Tax number: The Steuernummer consists of 10 to 11 digits, which are usually separated by two slashes. It is issued by your local tax office as part of the tax registration process, for example if you are employed or register for self-employment with the tax office. It is possible to have more than one tax number, for example if you are employed and also work as a self-employed person.
  • VAT-ID number: The Umsatzsteuer-ID (Umsatzsteuer-Identifikationsnummer, USt-IdNr.) is a stand-alone number that businesses receive in addition to the tax number of their company. It begins with the EU country code, 'DE' for Germany, followed by up to 12 digits. When registering your self-employment with the local tax office by completing the tax registration questionnaire you can apply for the VAT-ID number in this form. The VAT-ID number is issued by the Federal Central Tax Office. Businesses who provide or receive goods and services within the EU single market require a VAT-ID number for processing. This allows companies to prove to each other that they actually have entrepreneur status and are not private individuals. Many online marketplaces also require their retailers to provide a VAT ID. If a VAT ID has been issued, it must appear on the company's website in the legal notice (Impressum). Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.
  • Economic ID number: The new Wirtschafts-ID (Wirtschafts-Identifikationsnummer, W-IdNr.) will be issued by the Federal Central Tax Office. It is not available, yet. In the future, it will apply to economically active people and will primarily be used by the tax authorities. Economically active people are, for example, natural persons who pursue self-employment, legal persons or associations of persons. Tax authorities will thus be able to correctly assign economically active legal entities to the respective natural persons. The W-IdNr. will consist of the letters 'DE' and 9 digits and thus correspond in its form to the VAT-ID number. The Federal Central Tax Office will issue a W-IdNr. at the request of the competent tax authority and notify you without you having to submit an application.

[icon name="icon-info"] Taxes and Accounting

 

Small business, small business owner regulation – what is the difference?

What is a small business – Kleinunternehmen?

A small business – Kleinunternehmen in German – is not a separate legal form or defined type of business. The term is often used colloquially. It is associated with a self-employed individual who is both the owner and the workforce of their business. Other characteristics are low risk, lower management and administrative costs and a manageable turnover. This can all be true, but it doesn't have to be.  The European Commission offers an official definition of small and medium-sized enterprises (SMEs). These thresholds are not necessarily "small".

However, in the world of business, the following terms are more relevant:
  • small trading business – Kleingewerbe
  • small business owner regulation – Kleinunternehmerregelung

The two have nothing to do with each other thematically, but are often confused.

Will I run a small trading business – Kleingewerbe?

You have a Kleingewerbe if you register a trade and become self-employed as a sole proprietor and expect a profit of less than 80,000 euros and a turnover of less than 800,000 euros per year. You are therefore exempt from the provisions of the German Commercial Code – Handelsgesetzbuch HGB – and the obligation to be entered in the commercial register – Handelsregister – via a notary.

  • The German Civil Code – BGB Bürgerliches Gesetzbuch applies to you.
  • Single-entry bookkeeping with net income statements is sufficient to determine profits for the tax office.

An important aspect of Kleingewerbe is therefore the way in which profits are determined. If you exceed the above-mentioned profit or turnover threshold as a business trading sole proprietor, you must determine your profit using double-entry bookkeeping, which also includes the annual preparation of a balance sheet and a profit and loss account. This also involves an entry in the commercial register – Handelsregister – via a notary.

The term "small business" or Kleingewerbe says nothing about whether you show VAT on your invoices or make use of the small business owner regulation.

How do I apply for the small business owner regulation – Kleinunternehmerregelung?

Are you planning to become self-employed and have you clarified whether your planned self-employed activity is classified as a trade-like business or a liberal profession? When registering with the tax office you can opt for the small business owner regulation – Kleinunternehmerregelung. The small business regulation is a statutory simplification regulation for companies with low turnover. This means that VAT is not charged. You can make use of the small business owner regulation if your total turnover did not exceed 22,000 euros in the previous calendar year and is not expected to exceed 50,000 euros  in the current calendar year.

If you start your business activity during the course of the calendar year, the turnover limit of 22,000 euros applies for the application of the small business regulation. In this case, you must estimate the expected turnover for the start-up year as part of a forecast. To check whether the limit of 22,000 euros is likely to be met in the year of foundation and thus whether the small business regulation can be applied, the estimated total turnover must be extrapolated to the full calendar year.  Examples are provided by Gründerplattform, the Chamber of Commerce and Industry  or the Tax Office.

If you apply the small business owner regulation, you may not show VAT separately in your invoices. Instead include a note, such as "Gemäß § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.“ Please note that to due to the fact that VAT is not charged, you cannot claim an input tax deduction for purchased services.

Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.

Further English language information and examples are available on the website of this tax office. Turn to the Munich tax office for general tax information. Check our page on Taxes and Accounting on how to locate tax professionals to advice you.

Can I start a business out of my home?

Many entrepreneurs start working from home and use a part of  their apartment or house for their business. You should inform your landlord about your plans. Also contact the Amt für Wohnen und Migration, the municipal Housing and Migration Office, whether you are actually allowed to use your home for business purposes or whether you need a permit to do so. If you are a home owner, you should also obtain approval for working from home in case of doubt.

You also need to consider building, fire protection, and industry-specific regulations such as requirements for practices and rooms in which some form of childcare is offered, or  food hygiene regulations for anyone planning to store, process or sell food.

How do I register my business?

Before you launch your new business, you are required to register it with the Trade Office [Gewerbeamt] and the Tax Office [Finanzamt].

Step 1: Register your business with the Trade Office [Gewerbeamt]

There are different options how to submit your business registration in Munich:

1. Register your business online

You can register your business online via the München-Portal. You are able to upload additional documents if required. For the online registration process you will need to create a personal BayernID first.

2. Register your business by mail or e-mail

Complete the business registration form [Gewerbeanmeldung”] (PDF, 144 KB) and submit it to the Trade Office at the Department of Public Order [Kreisverwaltungsreferat - KVR] by mail or e-mail together with all required documents. Use our English language fill-in help to guide you through the business registration form.

3. Register in person at the Trade Office after setting up an appointment

Check the online appointment tool for available appointments and book yourself an available time slot for your business registration. If there are no time slots available we recommend to check again later to see if new time slots have been activated.

[icon name="icon-standort“]Kreisverwaltungsreferat (KVR), Hauptabteilung III, Gewerbemeldungen, Implerstraße 11, 81371 München

Which documents do I need to register my business?

In Germany, everyone is essentially free to register a business.

But: Some trades or businesses require special permits or monitoring [erlaubnispflichtige und überwachungsbedürftige Gewerbe]. Many skilled craft trades [zulassungspflichtige Gewerbe im Handwerk] require a permit or license or from the local  Chamber of Skilled Crafts [Handwerkskammer - HWK]. An exception applies to those activities that either qualify as "zulassungsfreie und handwerksähnliche Tätigkeiten" or are not regarded as part of the skilled craft trade at all.

Moreover, check if you have a valid residence permit that allows you to go self-employed.

The Trade Office lists the documents required for a business registration, such as:

  • Completed business registration form [Gewerbeanmeldung]
  • a copy of your identity document such as an identity card [Personalausweis] or passport [Reisepass]
  • if you are not a national of an EU country: valid residence permit including a permit entitling them to go self-employed
  • Supplement for authorized representatives: letter of attorney, competent proof of identification of the principal and the authorized representative
  • Supplement for minors: agreement of the parent or legal guardian (for sideline businesses) or permission of the guardianship court [Vormundschaftsgericht] (for main businesses)
  • entities listed in the registers of companies, cooperatives and partnerships or of associations [Handelsregister, Genossenschaftsregister, Vereinsregister] are required to submit a copy of an up-to-date and complete excerpt from their register
  • trades requiring a special permit [erlaubnispflichtige und überwachungsbedürftige Gewerbe]: submit a copy of the permit
  • skilled craft trades requiring a license [zulassungspflichtige Gewerbe im Handwerk]: submit a copy of the license [Handwerkskarte]

After submitting your business registration form and documents, the Trade Office will issue an acknowledgement of receipt [Gewerbeschein]. Please note that the "Gewerbeschein" does not replace any legally required permits or licenses.

When do I register my business?

  • You are obliged to register your employment either before you start operating it or at the same time as starting it.

Fees

  • Registration in Munich costs about EUR 50 to 60 depending on the legal structure of your business.
  • Additional fees apply when permits and licenses are required.

Forms

[icon name="icon-download"] Business registration form [Gewerbeanmeldung] (PDF, 145 KB), available in German language only

[icon name="icon-download"] Fill-in help with explanations in English language

Learn more about business registration from the Munich Trade Office:

[icon name="icon-weltkugel"] www.muenchen.de

[icon name="icon-info"] Telefon: 089 233-96030

 

Step 2: Register your business with the Tax Office [Finanzamt]

You have to inform the tax office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

[icon name="icon-tipp“]Tip

Are you considering to start self-employed work as a member of the liberal professions? Find out first if you qualify.

How do I register my freelancing activity in Munich?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.  Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende]
  • or members of the liberal professions [Freie Berufe].

Different rules apply to these two categories. It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Are you a member of the liberal professions? Register with Tax Office no later than one month after starting your self-employment.

The tax office responsible for you is determined by where you generate your income. In Munich turn to the Munich Tax Office [Finanzamt München].

Registering at the tax office is done digitally. All forms relating to tax registration are free or charge and available via ELSTER, the online portal used by the government’s financial administrative authorities. You may also use the forms provided by a commercial accounting software that is able to integrate with ELSTER. Please note, that in any case you are required to register once  with ELSTER. The certificate file required for electronic authentication is created free of charge during registration. A domestic classification criterion (tax number) is essential for registration on the ELSTER portal.

Learn how to register with the tax office in two steps.

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Taxes and Accounting

Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here

Tax numbers in Germany and their purposes

In Germany there are are different tax numbers that serve different purposes.

  • Tax-ID number: The Steuer-ID (steuerliche Identifikationsnummer) is a 11 digit number. It is  assigned for the purpose of uniquely identifying a natural person in administrative proceedings. It is permanently valid and does not change, for example, if you move house, change your name or change your marital status. The Steuer-ID  is issued by the Federal Central Tax Office.
  • Tax number: The Steuernummer consists of 10 to 11 digits, which are usually separated by two slashes. It is issued by your local tax office as part of the tax registration process, for example if you are employed or register for self-employment with the tax office. It is possible to have more than one tax number, for example if you are employed and also work as a self-employed person.
  • VAT-ID number: The Umsatzsteuer-ID (Umsatzsteuer-Identifikationsnummer, USt-IdNr.) is a stand-alone number that businesses receive in addition to the tax number of their company. It begins with the EU country code, 'DE' for Germany, followed by up to 12 digits. When registering your self-employment with the local tax office by completing the tax registration questionnaire you can apply for the VAT-ID number in this form. The VAT-ID number is issued by the Federal Central Tax Office. Businesses who provide or receive goods and services within the EU single market require a VAT-ID number for processing. This allows companies to prove to each other that they actually have entrepreneur status and are not private individuals. Many online marketplaces also require their retailers to provide a VAT ID. If a VAT ID has been issued, it must appear on the company's website in the legal notice (Impressum). Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.
  • Economic ID number: The new Wirtschafts-ID (Wirtschafts-Identifikationsnummer, W-IdNr.) will be issued by the Federal Central Tax Office. It is not available, yet. In the future, it will apply to economically active people and will primarily be used by the tax authorities. Economically active people are, for example, natural persons who pursue self-employment, legal persons or associations of persons. Tax authorities will thus be able to correctly assign economically active legal entities to the respective natural persons. The W-IdNr. will consist of the letters 'DE' and 9 digits and thus correspond in its form to the VAT-ID number. The Federal Central Tax Office will issue a W-IdNr. at the request of the competent tax authority and notify you without you having to submit an application.

[icon name="icon-info"] Taxes and Accounting

 

Small business, small business owner regulation – what is the difference?

What is a small business – Kleinunternehmen?

A small business – Kleinunternehmen in German – is not a separate legal form or defined type of business. The term is often used colloquially. It is associated with a self-employed individual who is both the owner and the workforce of their business. Other characteristics are low risk, lower management and administrative costs and a manageable turnover. This can all be true, but it doesn't have to be.  The European Commission offers an official definition of small and medium-sized enterprises (SMEs). These thresholds are not necessarily "small".

However, in the world of business, the following terms are more relevant:
  • small trading business – Kleingewerbe
  • small business owner regulation – Kleinunternehmerregelung

The two have nothing to do with each other thematically, but are often confused.

Will I run a small trading business – Kleingewerbe?

You have a Kleingewerbe if you register a trade and become self-employed as a sole proprietor and expect a profit of less than 80,000 euros and a turnover of less than 800,000 euros per year. You are therefore exempt from the provisions of the German Commercial Code – Handelsgesetzbuch HGB – and the obligation to be entered in the commercial register – Handelsregister – via a notary.

  • The German Civil Code – BGB Bürgerliches Gesetzbuch applies to you.
  • Single-entry bookkeeping with net income statements is sufficient to determine profits for the tax office.

An important aspect of Kleingewerbe is therefore the way in which profits are determined. If you exceed the above-mentioned profit or turnover threshold as a business trading sole proprietor, you must determine your profit using double-entry bookkeeping, which also includes the annual preparation of a balance sheet and a profit and loss account. This also involves an entry in the commercial register – Handelsregister – via a notary.

The term "small business" or Kleingewerbe says nothing about whether you show VAT on your invoices or make use of the small business owner regulation.

How do I apply for the small business owner regulation – Kleinunternehmerregelung?

Are you planning to become self-employed and have you clarified whether your planned self-employed activity is classified as a trade-like business or a liberal profession? When registering with the tax office you can opt for the small business owner regulation – Kleinunternehmerregelung. The small business regulation is a statutory simplification regulation for companies with low turnover. This means that VAT is not charged. You can make use of the small business owner regulation if your total turnover did not exceed 22,000 euros in the previous calendar year and is not expected to exceed 50,000 euros  in the current calendar year.

If you start your business activity during the course of the calendar year, the turnover limit of 22,000 euros applies for the application of the small business regulation. In this case, you must estimate the expected turnover for the start-up year as part of a forecast. To check whether the limit of 22,000 euros is likely to be met in the year of foundation and thus whether the small business regulation can be applied, the estimated total turnover must be extrapolated to the full calendar year.  Examples are provided by Gründerplattform, the Chamber of Commerce and Industry  or the Tax Office.

If you apply the small business owner regulation, you may not show VAT separately in your invoices. Instead include a note, such as "Gemäß § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.“ Please note that to due to the fact that VAT is not charged, you cannot claim an input tax deduction for purchased services.

Good to know: If you use the small business owner regulation – Kleinunternehmerregelung, you can also obtain and use a VAT ID without losing your small business owner status.

Further English language information and examples are available on the website of this tax office. Turn to the Munich tax office for general tax information. Check our page on Taxes and Accounting on how to locate tax professionals to advice you.

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!

Useful contacts

How do I find tax advisors, legal experts and insurance professionals?

Please understand that for legal reasons Munich's Business Startup Office is not allowed to provide individual tax or legal advice or help with insurances. We may not recommend or refer you to a particular professional or business.

We have listed several options to help you with your search.

Expanding your contacts by attending workshops, seminars and other events for new businesses can open doors to recommendations. Check out our events section!