Founding a company in Germany: €9600, 152 days and I still can't send an invoice

I started founding my second company in Germany in late January. It is now late June.

In that time, the state, two courts, a notary, a law firm, a tax firm, and software vendors have all found a way to bill me. Every single one of them, on time.

I have spent more than 9,600 euros to start a company: a little over 7,600 in fees and bills, plus 2,000 in share capital frozen in an account I am not allowed to touch. And after five months, here is what I have to show for it:

I have not been able to send a single invoice of my own.

Not one.

The work is happening. The clients are real. The one thing the state exists to let me do, bill them cleanly, is the one thing I still can’t.

The timeline

Everyone in this story could invoice me. I am the only one who can’t invoice anyone.

“But you can invoice your German clients”

The clients abroad need a VAT ID for reverse charge, and that is exactly the one I am still waiting for. My German clients I could bill today. But a domestic invoice now would have to be reissued the moment the VAT ID arrives. Bill now, bill again later, for no reason. So those wait too.

This should have been a web form

Fill it in, pay a fee, get your company and your VAT ID in a week. Estonia does it. The UK registers a company in a day, online, for the price of a dinner. There is no law of nature that says incorporation has to take five months and arrive by post.

Germany has built a process that chains one dependency to the next, puts a fee on each, and lets a founder run up legal bills, notary bills, court fees, tax retainers, and software subscriptions on zero revenue, all before granting the one permission a company exists for: the right to send an invoice.

If you ask the government, the reason is trust: the notary, the capital, the registers, the endless checks, all there to keep bad actors out. This is the same machine that did not catch Wirecard, a two-billion-euro scam. It does, somehow, generate enough friction to scare new founders out of the country.

And no, I could not just leave instead. My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving. But that is a story for another post.

This is a country taxing ambition through the roof before you’ve earned a cent, then wondering why the ambitious leave.

Bonus round: my company name was “too generic”

Have you heard of Apple? A piece of fruit, and one of the most valuable brands ever built. That name would never have been approved in Germany.

Naming a company is hard. It is the word everyone who touches your work will remember. After months of turning it over, I found one I could stand behind, a name that says what I believe software should be. (That belief will be its own post, soon.) Distinctive, I thought. The kind of name you do not forget.

Plenty.

“No,” said the lawyer. German company names have to be distinctive, and “Plenty” is a plain English word. Berlin would reject it.

“Plenty Group?” Two plain words. “Plenty Labs?” “Labs” is a plain word too. “Plenty.is?” A generic word with a domain on the end is still a generic word, and there was case law to prove it.

The suggestions were worse: stick my surname on the front, Paolino Plenty Labs. Or a prefix, PG Plenty Germany. Or make up a fantasy word.

Is Plenty. Its Plenty. IsPlenty. ItsPlenty. Rejected, all of it.

Fine. They wanted a meaningless word; I gave them one. Plenty Labs, minus the space: PlentyLabs.

Approved.

A name that started out of spite. Weeks of correspondence, resolved by removing a space. A rule that does not reward clarity. It rewards nonsense.

Postscript: why a UG and Co. KG, two companies?

Why does a one-person business need two companies? Because the simple version is worse, and because I am building it into something bigger.

The simplest setup is a sole proprietorship. Thirty euros, no capital, done in an afternoon. It also makes me personally liable for everything. A client sues? They are not suing a company. They are suing me. My savings, my apartment, my name.

So I wanted real limited liability, which means a company. And for one person, the cleanest company turns out not to be one company. It is a KG, a partnership that does the work, with a tiny UG standing in as the partner that carries the liability. Strange, but standard. You probably have seen “GmbH & Co. KG” on German companies a hundred times without wondering why. This is why.

It is taxed the sane way, too. The partnership’s profit is taxed once, as my income, since I am the one who ends up with it. A plain UG would tax the company first, then tax me again when I paid myself.

Why a UG and not the famous GmbH? A GmbH wants 25,000 euros sitting in a bank account before it is allowed to exist. The UG lets you start with almost nothing, on one condition: lock away a quarter of every year’s profit until the reserve reaches 25,000, then convert to a GmbH. The 25,000 does not go away. Germany just takes it in instalments.

Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it.

This is also why Chat with Work, my fully private Work AI, is still free: I cannot invoice you yet! Try it before that changes.