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Summary: to start a business in Germany you must first determine whether your activity is a Gewerbe (trade, restaurant, shop, services) or a Freiberuf (doctor, lawyer, translator, designer, consulting engineer). A Gewerbe is registered at the trade office (Gewerbeamt) and freelancers register directly at the tax office. Within one month of starting you must fill in the “tax registration questionnaire” in ELSTER. With revenue of up to €25,000 in the previous year you can use the small business rule (Kleinunternehmerregelung) and not charge VAT.
Step 1: residence permit for self-employment
EU citizens and holders of permanent residence or a residence permit marked “Erwerbstätigkeit erlaubt” can start a business without restriction. Otherwise you need a self-employment residence permit (§ 21 AufenthG), which requires a viable business plan, economic interest or regional need, and financing. Coordinate with the Foreigners’ Authority before starting.
Step 2: choosing the legal form
- Einzelunternehmen: the simplest form; no minimum capital, but full personal liability.
- GbR: a partnership of two or more people, with personal liability.
- UG (haftungsbeschränkt): a “mini limited company” with minimum capital of €1; requires a notary (Notar).
- GmbH: a limited liability company with initial capital of €25,000 (at least half of it on registration).
Step 3: registering the Gewerbe (Gewerbeanmeldung)
- In most cities online or in person at the Gewerbeamt
- Documents: passport, residence card with permission for self-employment, and for some occupations a special permit (for example restaurants: Gaststättenerlaubnis and health certificate; crafts: registration in the Handwerksrolle)
- Fee: about €15 to €65 depending on the city
- After registration, the trade office automatically informs the tax office, the chamber (IHK or HWK) and the employers’ liability insurance association (Berufsgenossenschaft). Membership in the IHK is mandatory.
Step 4: tax registration
In the ELSTER portal fill in the “Fragebogen zur steuerlichen Erfassung” within one month. In it you declare expected income, the legal form and the choice of Kleinunternehmer. You then receive a Steuernummer and, if needed, a VAT ID (USt-IdNr.).
Main taxes
- Income tax (Einkommensteuer): on profit; quarterly prepayments.
- Value added tax (Umsatzsteuer): 19% or 7% (for example on food). Kleinunternehmer with revenue of at most €25,000 in the previous year and at most €100,000 in the current year are exempt.
- Trade tax (Gewerbesteuer): only for a Gewerbe; for individuals and partnerships, €24,500 of annual profit is exempt.
More details in the guide to taxes in Germany.
Step 5: insurance
- Health insurance: mandatory for the self-employed; statutory (voluntary) or private – health insurance guide.
- Professional liability insurance (Betriebshaftpflicht): strongly recommended.
- Pension insurance: mandatory for some occupations (for example teachers, craftspeople).
Step 6: bank account and bookkeeping
Open a separate account for the business (bank account guide). Keep all invoices and receipts for 10 years. From 2025, invoices between businesses must gradually be issued as electronic invoices (E-Rechnung).
Step 7: being visible
Registering on Google Business Profile, building a website and being present on social media are essential. To reach the thousands of Iranians in Germany looking for Persian-speaking services, list your business in our directory.
Support and financing
- Gründungszuschuss: a grant from the employment agency for unemployed people who start a business.
- KfW loans: low-interest state loans for start-ups.
- Free advice from the IHK and HWK and counselling centres for immigrant entrepreneurs.
Frequently asked questions
How much does registering a business (Gewerbeanmeldung) cost in Germany?
About €15 to €65 depending on the city. Registering a Freiberuf at the tax office is free.
Who is a Kleinunternehmer?
A business whose revenue was at most €25,000 in the previous year and is at most €100,000 in the current year, and which can issue invoices without VAT.
Can I have a side business with a work residence permit?
Only if your residence card allows it. Otherwise get permission from the Foreigners’ Authority first.
What permits are needed for an Iranian restaurant?
Gewerbeanmeldung, a restaurant licence (if selling alcohol, depending on the state), food hygiene training (Belehrung nach Infektionsschutzgesetz) and compliance with building and fire regulations.
This article is not legal or tax advice; consult a tax advisor when starting a business. Last updated: September 2026.
