Groupon moves headquarters to Berlin (German, English summary)(netzwertig.com) |
Groupon moves headquarters to Berlin (German, English summary)(netzwertig.com) |
I'm surprised more American businesses aren't picking somewhere like Amsterdam if they're wanting to set up shop in continental Europe, especially with its lower immigration barriers for non-European entrepreneurs.
--
Germany is no(t much) better or worse than other EU countries in terms of bureaucracy or immigration barriers. To deal with legal/ tax/ privacy stuff, you would mostly set up a formal HQ in Ireland, Luxemburg or Switzerland (the latter being home to Groupon EU's legal HQ).
The comparatively low salaries across the board in Berlin coupled with the potential for subsidies from the state make it a good proposition to have a working office. (If you're looking for engineers and highly skilled staff, Zurich and Munich still have an edge but are much more expensive.) Berlin is also large enough to have a talent pool for most positions/ departments and is growing due to perceived and/ or real attractiveness. And with the influx of young people from all over the world, informal immigration barriers like language are vanishing, too.
This would indicate that that is not entirely true:
http://www.doingbusiness.org/rankings
My more subjective impression during two years in Austria was that it's just about as bureaucratic as Italy, just that they tackle it with more efficiency. I imagine Germany being similar.
Opening a company in Germany, for instance, is not as cheap/simple as an LLC in many US states or an Ltd in the UK.
I think it's time for killing the "Berlin is dead cheap" myth
If I start guessing - probably a better startup community. Amsterdam and Netherlands are corporation-friendly, with quite some big companies having headquarters there; but startups and corporations have different needs and make different communities.
UPDATE: Another point I can think of is the size of local market.
Maybe not too important for web startups that go global right away, but if you start locally (and thus use Dutch), you have 16M people in the Netherlands (+maybe 5 in the Dutch part of Belgium), while in Germany you get 82M, five times as much; plus another 8M in Austria and some more German speakers from Switzerland.
That really depends on what kind of LLC you want to open. There the so-called "UG Haftungsbeschränkt" which was created as response to the British Ltd. and costs somewhat less than 200 Euros + whatever capital you want to invest. For larger enterprises, you'd probably found a GmbH which usually costs somewhere between 1000 - 2000 Euros in Legal Fees [1] and needs a minimum capital of 25.000 Euros (which you can use to pay the legal fees, so you don't need those extra). The costs of creating a business in germany are probably not higher than anywhere else in Europe.
[1] as always, legal fees can be significantly higher than that depending on how complicated the case is.
http://www.doingbusiness.org/data/exploreeconomies/germany/
vs
http://www.doingbusiness.org/data/exploreeconomies/united-ki...
UK still looks easier, and doesn't have any capital requirements.
> minimum capital of 25.000 Euros
This is a very continental European concept that, IMO, is basically useless. It's a number picked by some politician, nothing more, nothing less.
Only a part of the company profits. But you can invest that capital, so if you'd by a new macbook on the company, that counts IIRC. You don't have to keep that in money in a bank account. If you're a sole founder you'd probably pay yourself a regular wage and save what's left, so that doesn't apply either.
Those doingbusiness numbers seem far off from my personal experience. The german ones don't apply in all cases (you don't need half the steps if you don't have employees) and certainly don't cover the UG case - charges and timelines are way off. They seem to apply to the standard GmbH, but there the timeline is far too quick - it takes more like 4 - 6 weeks to have all the paperwork through court and it took more than another month until the tax administration in Berlin acknowledged our existence - they're currently a little overloaded.
You are required to save capital, so you cannot pay yourself above a certain percentage in dividends, but you can still pay yourself salary, which is not subject to those limits.
It is easier in the UK if you are already in the UK, but living in Germany is certainly easier than living in the UK in terms of immigration rules.
Plus, instead of handing over the copyright to the company, it might be possible to do something like grant an exclusive license to the company instead.
Far better might be some transparency requirements.
In any case, the number is not too low to guarantee compensation: The base capital of the company is public. Every business person in Germany knows that number. So if you're trading with a fresh GmbH you can safely assume that at least 25k were available at some point. Excluding plain fraud, you can be pretty sure that at least bills in a given range can be paid from that capital. You'd have a second look if they try to order something which goes beyond their base capital. Transparency requirements don't help much with fresh companies since there is now history to judge from.