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

1. Jan23

2. 23 Jan

3. First call with a law firm to set up the company. The clock and the hourly billing start.

4. Feb5

5. 5 Feb

6. I sign the mandate and send my ID. Drafting begins.

7. Feb18

8. 18 Feb

9. The structure is set: PlentyLabs UG & Co. KG, technically two companies. The name is a saga of its own.

10. about 1 month of drafting

11. Mar6

12. 6 Mar

13. Incorporation documents ready.

14. Mar17

15. 17 Mar

16. Documents approved. The hunt for a notary begins.

17. 7 days for the appointment

18. Mar24

19. 24 Mar

20. Notary in Berlin reads the deeds aloud and certifies that I am who I say I am.

21. €1,575.24Notary fees

22. Mar25

23. 25 Mar

24. I pay in €2,000.00 of share capital. Money I cannot touch; it has to stay there.

25. €2,000.00Locked, not a fee

26. Mar26

27. 26 Mar

28. The register court demands a fee advance.

29. €300.00Court advance

30. 17 days after the notary

31. Apr10

32. 10 Apr

33. First company entered in the commercial register.

34. 1 week more

35. Apr17

36. 17 Apr

37. Second company entered.

38. €260.00Register, 200 + 60

39. Apr20

40. 20 Apr

41. I ask the firm I already pay to handle the tax registration too.

42. 2.5 weeks just to start

43. May6

44. 6 May

45. Before the tax work can begin, a fresh engagement is required: proposal, power of attorney, ID checks, per company.

46. €630.00Tax registration quote

47. May28

48. 28 May

49. The incorporation legal bill lands.

50. €4,462.50Legal fees

51. May29

52. 29 May

53. Tax questionnaires submitted. I request standard VAT and a VAT ID, urgently.

54. Jun3

55. 3 Jun

56. First bill from the accounting software.

57. €426.97Accounting software

58. Jun9

59. 9 Jun

60. I am told the VAT ID will arrive by post. A letter.

61. Jun24today

62. 24 Jun, today

63. Seven weeks since the tax firm, almost four weeks since the questionnaires. No VAT ID. No invoice sent.

Billed by everyone else€7,654.71

Share capital I cannot touch€2,000.00

Total gone€9,654.71

Invoices I have managed to send0

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.