On this webpage you will find important basic information concerning framework conditions, and contact points. This information is intended to provide an initial orientation to those with limited German proficiency. It does not claim to be a full and exhaustive treatment of all legal aspects. We would like to point out that most of the subsequent links to websites, documents and forms are generally not available in languages other than German. Please have a look at this more detailed information using a translation tool of your choice.
Our roadmap “How to set up a new business in Munich” informs about startup formalities, choice of legal form, tax overview, private and operational security, subsidies and financial aids or coaching-programs.
Your business model: an own online store or a marketplace model?
Do you want to create an own online store or do you sell your goods via a marketplace? Both approaches have advantages and disadvantages:
- in terms of the time and money required to start and operate
- in terms of customer acquisition
Marketplaces and sales platforms can also be used to test products quickly and easily before setting up your own online store.
Compare the advantages and disadvantages of the various supply chain concepts for yourself and your business model in order to make your deciscion:
If you are looking for your own storage space to rent please have a look at our location and premises information. It is usually not possible to set up a storage space in your private home. If you wish to use residential space for commercial purposes, for example as a storage space, you must generally apply to the local construction authority [Lokalbaukommission] for a building permit – as this is a change of use.
This is often a suitable setup for customized products made to order.
With dropshipping, storage and shipping are outsourced to the producer, wholesaler, fulfillment service provider or the marketplace. Even as a dropshipper, you remain the first point of contact for your customers, for example in connection with statutory warranty obligations, repair, replacement or compensation. Please be aware that tax and legal obligations for e-commerce also apply to your business model. Pay particular attention to product safety, CE marking and customs regulations for products from third countries.
Do you need software?
Do you need a merchandise management system and if so, how do you find suitable software?
The Chamber of Commerce and Industry offers tips and advice on finding suitable software. If you are setting up your own online store, it is important to choose the right store system – via a modular online store provider or programmed from scratch with professional software for stores.
Legal and tax issues
It is important that you keep up to date with legal and tax issues. There are constant modifications – industry associations and the Chamber of Industry and Commerce help you to stay up to date.
What is allowed and what is prohibited on the Internet? Operators of websites and online stores must comply with a number of legal rules in order to avoid warnings and other problems. CCI guide to Internet law
The DSGVO provides legal rules for the processing of personal data within the European Union. Failure to comply with these rules may result in expensive warnings and fines. Further information and contacts for advice can be found on our Laws and contracts page.
One aim of GTC is to reduce liability and risk as far as possible. Whether individual provisions in GTC are permissible and necessary depends, among other things, on the industry. Some industry associations and publishers provide sample GTC. Lawyers specializing in contract law draw up individual GTC. General terms and conditions are only effective if they are included in the respective contract – and for this there are special rules for online trade. CCI guide to general terms and conditions
Sales law regulates topics such as warranty, possible compensation claims, the right to exchange and return goods, as well as specific aspects of international sales contracts. CCI guide to sales law and CCI guide to the right of return
Companies must have adapted their digital products and services to new contract law rules since Jan. 1, 2022. Article “New law for digital products“
A cancellation button must be provided if companies conclude contracts with consumers online that bind the consumer in the long term.
A basic 14-day right of revocation or cancellation applies for online shopping. Exceptions are perishable foodstuffs or made-to-measure and custom-made products that have been specially produced for a customer. In addition, there are also legal warranty claims for defects or delays in the agreed delivery. CCI guide to the right of return
Whether manufacturer, importer, or retailer – anyone who puts products on the German market must ensure that the products meet the European regulations for product safety or else risk liability procedures, sanctions, and loss of reputation. Product safety regulations also affect labeling and information obligations.
CCI guide to product safety
CCI guide to product liability
Special regulations exist for a number of products, such as:
- Toys
- Electrical products
- Textiles
- Cosmetics
- Food supplements
- Medical products
- Food production and or trade
- food contact materials
Anyone who manufactures, imports or additionally packages goods in Germany required to monitor compliance with obligations under the Packaging Act (Verpackungsgesetz, VerpackG). This includes downstream distributors in the supply chain, online marketplaces, online retailers and fulfillment service providers. You are required to register with the LUCID Packaging Register. Does your packaging accumulate as waste with private final consumers? Then you will also have to obtain a packaging license from officially approved (dual) system(s) that acts as a take-back system.
- In German: IHK guide to packaging law
- In English: Central Agency Packaging Register – ZSVR
Are you planning to have customers outside of Germany? Make sure to fulfill the packaging law of each country.
- In German: DIHK guide to packaging regulations in 27 European countries (PDF, 914 KB)
- In English: Contact the German Chambers of Commerce Abroad (AHK) to find out about country-specific regulations
Do you have any questions? The local Chamber of Commerce and Industry (IHK) offers free advice.
Logos of companies or individual products are capable of being registered as a trade mark. An important prerequisite is that you do not violate any existing trademark rights and business names. An Internet domain name or your company name may be protected by use in a business context – limited to the geographical reach of your company’s business activity. CCI guide to protecting names and logos
When it comes to doing business abroad, you need to check what tax and legal regulations apply. Rules are complex and you might require professional assistance. Find out more in our international topics check.
For deliveries from suppliers or to customers based in other EU countries or third countries: Find out in advance how to manage input tax [Vorsteuer] and value-added tax [Umsatzsteuer]. Even companies that make use of the “provision for small businesses” [Kleinunternehmerregelung] can be affected! IHK guide to value-added tax
When services are provided across the border, the question always arises as to the correct VAT treatment of cross-border services. Find out more in the IHK guide to VAT: Cross-border services. The Federal Ministry of Finance has issued a detailed statement on the VAT classification of turnover from online event services and other online services.
Online retailers must pay VAT in other EU countries if their sales to non-business customers (i.e. private end consumers) in other EU countries is more than 10,000 euro net (including shipping costs) in a calendar year. This also applies to small businesses, i.e. regardless of whether an online retailer is obliged to pay VAT in Germany. This 10,000 euro threshold value includes all products and services sold, including digital services such as downloads. In order to register and pay this tax in other EU countries you can use the One Stop Shop procedure (OSS), which involves registering with the Federal Central Tax Office in Germany and submitting your tax declaration to them for your entire EU sales.
More information on registering for OSS
Federal Central Tax Office: The One Stop Shop EU regulation
Since the start of 2023, platform operators have to report their users’ sales data to the German tax office if an user account generates more than 2,000 euros in turnover per year or has more than 30 sales transactions. Anyone who exceeds these limits will be classified as a business trader with all the tax and legal consequences. An exemption limit of 600 euros generally applies to private sales transactions.
Prepare a business plan
Once you have thoroughly reviewed the issues mentioned above, your next step is to prepare a detailed business plan including effective and accurate financial projections. Our business plan template and more information around the planning process you will find here.
Industry specific information sources
The more you know about your industry, the better you can plan your self-employment. Industry specific information helps to evaluate how you successfully can realize your business idea. Are there any average values for your business sector that can help you estimate what sales and profits are typically generated? Which calculation figures are typical for your industry? You may want to start your research by reviewing information from one of the following industry associations:
- Bundesverband E-Commerce und Versandhandel Deutschland
(German E-Commerce and Mail Order Association) - Bundesverband Onlinehandel e.V.
(German Online Trade Association) - eCommerce-Verbindungsstelle Deutschland
(eCommerce Liaison Office Germany) - The Mittelstand 4.0 Competence Center for Commerce offers free online seminars
- The “Erfolgreich handeln” Initiative organizes online webinars and face-to-face workshops focusing on topics such as getting started in e-commerce, dealing with social media, online marketing and digital visibility. All webinars are subsequently available free of charge in the project media library.
- The Chambers of Commerce and Industry in Hessen have joined forces to form a service company that offers free information.