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How to Start Your Own Business in Germany: 5 Proven Success Strategies for Female Expats

“Whenever you see a successful business, someone once made a courageous decision.” — Peter F. Drucker, Management Consultant, Educator, and Author

Starting your own business in a foreign country like Germany can feel like an uphill battle. Between navigating a new language, different cultural norms, and understanding local regulations, the bureaucratic process for female entrepreneurs may seem daunting. However, many women in Berlin and across Germany have turned these challenges into opportunities, building thriving businesses with passion, expertise, and resilience.

As a career + business coach and trainer specializing in supporting women—particularly expat women—on their career journeys, I’ve helped many navigate the path to success. In this blog, I’ll share five practical strategies to help you start your business in Germany, drawing on real-life examples from my experience and collaborations with inspiring women.

1. Tackle Bureaucracy with a Step-by-Step Approach
Germany’s bureaucracy can be complex, but it is also organized, and resources are available to guide you. To officially start your business, take it step-by-step:

  • Register Your Business:
    Decide whether your business activity falls under “Freiberuflich” (for specific professions, in German so called „Katalogberufe“) or “Gewerbe” (trade):

    Freiberuflich     includes professions like teachers, coaches, and therapists. It is mandatory to register in the first month starting your business. As soon your application is reviewed by the financial Office of your district, you receive a letter with your tax ID for your activity as Freiberufler.

    Gewerbe applies to tradespeople and other commercial businesses. For Gewerbe, register at your local Gewerbeamt (trade office).

    If you’re unsure, contact your local Finanzamt (tax office) for clarification—they will be happy to help. If your business is Freiberuflich, register directly with the Finanzamt in your district. If it is a Gewerbe, register with the local Gewerbeamt (trade office). 

  • Health Insurance:
    Understanding your obligations regarding health insurance and pensions is crucial. In Germany, health insurance is mandatory for everyone, including freelancers, and contributions depend on your income; you can estimate your costs using calculators provided by providers like TK (Techniker Krankenkasse).

  • Consider Other Insurances and Pensions:
    Pension contributions are mandatory for some professions (e.g., teachers, artists, or midwives), while for others, it is optional. Regardless of the requirement, it’s highly recommended to save for retirement to ensure financial security in the future, especially if you are not obligated to contribute to a pension scheme. For example, the Künstlersozialkasse (KSK) is a compulsory insurance for self-employed artists and journalists in Germany, providing coverage for health, long-term care, and pension insurance. Artists and journalists only pay half of the contribution, as the government covers the other part to ensure their social security. For more information check out their homepage https://www.kuenstlersozialkasse.de/ 

My advice as Entrepreneur:
I started my own business as a coach and trainer for female expat career development by taking courses at I.S.I. (Initiative for Self-Employed Female Migrants) in Berlin. These courses, offered in multiple languages and funded by the government, are free of charge. Now, I’m a business trainer for I.S.I., teaching in German, Spanish, and English. Therefore, I can highly recommend “apply a step-by-step approach, connect with other entrepreneurs, and celebrate every small win!”

2. Understand Business Types and Choose the Right Structure
Choosing the right business structure is crucial, as it affects taxes, liability, and administrative requirements. Common business types in Germany include:

  • Freiberufler: A legal term for certain freelance professions (e.g., coaching, design, therapy). Liability is unlimited, and this is a common structure for solo entrepreneurs.
  • GmbH (Limited Liability Company): Requires €25,000 in capital. Liability is limited, making this popular for startups. gGmbH is a non-profit version for socially oriented businesses.
  • UG (so called Mini-GmbH): Requires only €1 in capital, offering a low-cost option for solo or team-based businesses.
  • GbR (Civil Law Partnership): For teams; no capital requirement but unlimited liability.

I highly recomend looking into different possibilities and consider consulting the IHK (Chamber of Commerce) or a lawyer, especially if you’re starting a business with someone else.

First-hand advice from Maria:
Maria, a graphic designer from South America, registered as a Freiberufler after moving to Berlin. She joined local networking groups migrapreneur Berlin to share experiences and navigate bureaucracy more easily.

3. Master Legal and Tax Requirements
Germany’s bureaucracy requires careful attention to legal and tax obligations. Understanding these requirements early on is critical to running a successful business without unnecessary legal or financial troubles.

Taxes:
There exist different taxe obligations, depending on the type of business you have. The most important ones you should take into consideration when starting your own business are the following ones:

  • Income Tax (Einkommensteuer): This tax applies to employees as well as to self-employed. Your taxable income is calculated as your total revenue minus allowable business expenses. Income tax rates in Germany are progressive, ranging from 14% to 45%. It’s essential to keep accurate records of all income and expenses to determine or at least estimate your taxable profit. There exist helpful apps such as accountable or papierkram or many entrepreneurs, including myself, get the support from a tax advisor, too.
    Besides, there is a church tax (Kirchensteuer) if applicable in your case. If your annual income exceeds a certain threshold, you may also be required to pay a solidarity surcharge (Solidaritätszuschlag) If you have any further questions it is highly recommende to watch out for an accountant supporting you in your entrereneurship journey. Further information inlcuding a free calculater you can find on the website of Lexware, one of the accountant softwares: https://office.lexware.de/wissenswelt/rechner-checklisten/einkommensteuer-rechner/
  • Trade Tax (Gewerbesteuer): This tax is relevant for tradespeople and registered businesses, but “Freiberufler” are generally exempt. Trade tax rates vary by municipality, typically ranging from 7% to 17.5% of your annual profit after a tax-free allowance of €24,500 for sole proprietors and partnerships, however this does not count for a GmbH. This tax is payed in the district or municipality your business is registered. Further details about this tax as well as detailed explenations on how to calculate it (free calculater included) you can find on the website of the accountant software Sevdesk: https://sevdesk.de/gewerbesteuerrechner/ 
  • VAT (Umsatzsteuer): Value-added tax is charged on goods and services you sell, typically at a standard rate of 19%. For small businesses owners applies the rule of small business regulation, meaning as long as your revenue is lower than than €25,000 and you are expecting no moe than €50,000 revenue in the current year, you are exempt from charging and paying Value Added Tax (VAT, or „Umsatzsteuer) in the current year may opt for the small business regulation (Kleinunternehmerregelung), exempting them from charging VAT.
  • Corporate Tax (Körperschaftsteuer): This tay is only paid by corporations such as GmbHs (limited liability companies) or UG (haftungsbeschränkt, a type of mini-GmbH). The corporate tax rate is 15%, plus a solidarity surcharge so it is 15,83 %.
    If you operate as a sole proprietor (Freiberufler or solo commercial trader) or have a partnership such as a Gbr, this tax doesn’t apply to you, but it’s important to understand if you plan to expand or change your business structure. Further information you find here: https://www.fuer-gruender.de/wissen/unternehmen-gruenden/finanzen/steuern/koerperschaftsteuer/ 

Pro Tips from my own experience: 

  • Open a business bank account : As well, set aside tax payments in a separate sub-account.
  • Consult a Tax Advisor: A Steuerberater can help you navigate your specific obligations.
  • Keep Records: Maintain clear records of all income and expenses by using an excel sheet or one of the mentioned softwares or apps or any other helpful tool.
  • Advance Tax Payments (Vorauszahlungen): Taxes in Germany are typically paid quarterly in advance based on your estimated annual earnings. This includes income tax, trade tax, and VAT (if applicable). These advance payments are adjusted at the end of the year once your final tax liability is calculated.
  • Invest in yourself : Decide wheter you invest for yourself in training for example with a workshop at the organization of female migrant founders I.S.I and / or finding support from a tax advisor as mentioned above.

Understanding these taxes will help you manage your business finances effectively and stay compliant in Germany!

4. Leverage Networking and Community Support
Networking is essential for entrepreneurial success. Connecting with other entrepreneurs can offer valuable insights, clients, and collaborations. Surrounding yourself with a supportive community can also help you navigate the challenges of starting a business in a foreign country. From my personal experience as an entrepreneur, I can definitely say that all the friendships and collaborations I developed in the past years really made and still make a difference.

First-hand advice from Yumi:
Yumi, a yoga instructor, built her business by hosting workshops in Berlin co-working spaces and promoting them on Eventbrite. She joined groups like Expat Women Entrepreneurs in Berlin on Facebook and attended local events. These connections helped her find clients, partners, and supportive friends.

5. Seek Professional Guidance and Mentorship
Starting a business can feel overwhelming, but mentors and coaches can guide you through the process and provide the expertise needed to avoid common pitfalls. Professional guidance helps you make informed decisions, overcome challenges, and adapt your business to the local market and regulations. Besides group workshops I invested from the very beginning in personal coachings which helped me and still helps me further developing mi entrepreneurship with more focus, clarity and ease. 

First-hand advice from Sara:
Sara, a life coach in Berlin from Italy, worked with a entrepreneurship coach who helped her navigate the business strategy in the German market. This support boosted her confidence and refined her business model, as well it saved her a lot of time.

Final Thoughts: Turning Challenges into Opportunities
As a female expat in Germany, your resilience, adaptability, and unique perspective are powerful assets. While the process can be challenging, Germany offers abundant resources, communities, and opportunities.

By researching your options, networking, and seeking professional guidance, you can turn your entrepreneurial dreams into reality. And always keep in mind what the famous business owner Peter F. Drucker states: “Whenever you see a successful business, someone once made a courageous decision.”  

Ready to Take Charge of Your Future?
If you’re ready to take the next step, I’d love to help! 

Let’s turn your business idea into a success story!