Registering a trade is an important step on the way to setting up a business. Whether you’re establishing a new startup, pursuing a side job or registering a (Kleingewerbe) small trade, you need to obtain a trade licence first. Read on to find out everything you need to know before you register your trade.
- Trade registration is just one step in the company formation process.
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What exactly is a trade?
The term ‘trade’ is the English translation of Gewerbe and refers to self-employed activity to earn a profit. You might also see Gewerbe translated as ‘business’ or ‘commercial’.
The Gewerbeordnung or GewO (German Trade Act) gives entrepreneurs the right to pursue a trade. Anyone can register a trade, as long as no restrictions are preventing you from doing so.
All production and processing activities (industry and craft) count as trades.
Generally, anyone wishing to become self-employed and earn profit must register a trade (§ 14 GewO). Additionally, if you want to pursue the independent operation of a non-travelling trade, a branch office or a dependent branch, you must submit your business registration (Gewerbeanzeige) to the competent authority.
Who is not required to register a trade?
Those in the liberal professions (freie Berufe or Katalogberufe in German) do not need to register with the trade office (Gewerbeamt). Katalogberufe (which literally means ‘catalogue professions’ in English) include doctors, journalists and lawyers, for example.
Freelancers, ie those practising liberal professions, can skip trade registration and register directly with the tax office (Finanzamt). The Finanzamt will decide (on a case-by-case basis) whether the business activity in question is considered a freie Berufe during tax registration.
If a sole trader is not running a commercial business, it is a Kleingewerbe (small business). A Kleingewerbe does not have to (and cannot) register with the Gewerbeamt.
In Germany, this varies from state to state. Often, you register at the district office (Bezirksamt) responsible for your headquarters or the public order office (Ordnungsamt). In some states, like Hamburg or Bavaria, you can also register your trade with the Chamber of Industry and Commerce (Industrie- und Handelskammer, or IHK).
Entrepreneurs don’t always have to register in person. Some trade offices allow entrepreneurs to send the application by mail or complete the entire registration process online (German article).
When do I have to register my trade?
Generally, you have to register your trade when your business activities commence. Late registrations may be met with fines, though not all trade offices enforce such policies strictly.
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What do I need to register with my trade office?
Although some entrepreneurs only need to show their ID card (or passport or registration certificate) when registering their trade, there are several professions and activities where industry-specific certificates or permits (Meisterbrief/master craftsman’s certificates, for example) must be presented. Inform yourself ahead of time as to which qualifications or permits are necessary to register the type of activity you are planning to carry out.
To pursue many crafts, for instance, a Meisterbrief (master craftsman’s certificate) must be presented. To work as a broker (Makler), you need a permit in accordance with § 34c GewO. There are several professions that require a trade permit (Gewerbeerlaubnis) to practise on a self-employed basis. A trade permit is required when operating gambling arcades or pawnshops, for example, or working as an insurance consultant, broker, property developer or travel agent.
In addition to trades requiring a permit, there are also trades where background checks are mandatory. To register such a trade, you need a police clearance certificate as well as an excerpt from the central commercial register. The latter is necessary for proving that you have not violated any GewO regulations, have not had to pay fines or have not been banned from practising a trade in the past. Trades that require background checks include businesses handling second-hand, high-priced products, businesses that build safety installations and theft-resistant opening tools, credit and detective agencies, travel agencies and locksmiths.
Trades with special requirements: licences, certificates and other qualifications
Some trades involve submitting more than the usual requirements. To register such trades, you need to present licences from the relevant agencies or offices. Among others, these specially regulated trades include:
- Ambulatory nursing care services (Ambulante Pflegedienste): If you’re planning on starting your own nursing care service, must either be fully trained as a nurse, paediatric nurse or geriatric nurse or have two years of relevant work experience under your belt. In addition, you’ll need to have completed training in patient care management, referred to in German as Pflegedienstleitung (PDL), or studies in patient care organisation (Pflegemanagement). Moreover, you’ll also need to obtain approval from nursing care insurance providers.
- Taxi companies (Taxiunternehmen): As an aspiring taxi company owner, you’ll need a special permit from your local traffic authority (Verkehrsbehörde): the so-called taxi licence (Taxikonzession). Also required is a certificate of proficiency for taxi drivers, which you can obtain through relevant studies or work experience or an IHK exam.
- Skilled craft businesses (Zulassungspflichtige Handwerksbetriebe): Some skilled craft professions are subject to the Meisterpflicht – meaning that such businesses may only be led by master craftsmen. These professions include masons, scaffolders and ship builders. If you wish to open such a business, you’ll need a Meisterbrief (master craftsman’s certificate). Some craftsmen, such as tilers, violin makers and goldsmiths, can pursue self-employment in their trades without a Meisterbrief. This also applies to those practising similar professions, such as cosmeticians, piano tuners and undertakers.
- Hospitality venues (Gaststätten): In order to open a restaurant, food stall or bar, you need to request a special hospitality licence (Gaststättenerlaubnis) from your local Gewerbeamt. To receive one, you must have a health certificate, a police clearance certificate and a valid rental contract, lease agreement or purchase contract for your location. Ideally, you’ll also already have years of experience in the food service industry, for example as a cook or as a hospitality professional.
- Driving schools (Fahrschulen): As an aspiring self-employed driving instructor, you must present proof of successfully completed driver instruction training as well as two years of experience as a driving instructor. You must also present an overview of your classrooms and equipment as well as a declaration of all teaching material and vehicles.
Regardless of which trade you wish to pursue, you should inform yourself ahead of time as to what the unique requirements of your industry are. Find people who have already successfully established businesses in your industry by tapping into your personal network or finding contacts in local industry associations or internet forums.
How much does it cost to register a trade?
It usually costs between €10 and €40 to register a trade (Gewerbeanmeldung). Find out ahead of time what your competent trade office charges for trade licences. If you’ve chosen a legal company form other than a GbR or a sole proprietorship (such as a GmbH, AG, UG or GmbH & Co. KG), you’ll need a notarial certification and your commercial register (Handelsregister) entry before registering. For sole proprietorships, this depends on whether or not you classify as a registered merchant (eingetragener Kaufmann, or e.K.) or not.
What are the steps involved to register a trade?
To register your trade (Gewerbeanmeldung), a trade registration form must be filled out and submitted. If you’ve chosen the GmbH, UG or a certain type of sole proprietorship as your business’s legal company form, you’ll need to have your Handelsregister entry on hand in order to be able to enter the HR number as well as the place of issue. Proof of the entry must also be submitted.
Among others, the following details must be provided:
- Personal information: name, address, birthplace, etc.
- Name and legal company form of the planned business
- Names of all shareholders/partners when founding a business with others
- City and number of the Handelsregister entry (for corporations and merchants)
- Number of managing partners (for partnerships)
- Number of legal representatives (for corporations)
- Details of the business premises
- Registered activity: What business activities will be carried out and when did the activities commence?
If you’re registering in person, bring the following documents with you to the Gewerbeamt:
- Valid ID
- Handwerkskarte (craftsman’s card) – when applicable
- Handelsregisterauszug (commercial register entry) – for corporations and registered merchants
- Gewerbeerlaubnis (trade permit) – and, when necessary, industry-specific permits and licences
- For trades requiring background checks: police clearance certificate, excerpt from the central commercial register
Afterwards, you’ll receive a stamped copy of the registration form as confirmation or as your trade licence (Gewerbeschein).
If you can’t fill out or submit the form in person, you can authorise a third party to do so for you via a power of attorney.
What happens after I register my trade?
Once you’ve successfully registered with your trade office, the Finanzamt will contact you for tax registration. You’ll receive a form requesting general details such as personal information as well as specific details about your business activities, your working capital, the anticipated amount of revenue you’ll earn and the types of bookkeeping and profit calculation you’ll use. You will then receive your tax ID number (Steuernummer), which is necessary for issuing invoices.
The IHK (Industrie- und Handelskammer, or the Chamber of Industry and Commerce) or the HWK (Handwerkskammer, or Chamber of Crafts) will also be in touch with you, as membership is necessary for traders. In addition, you (and your employees, if applicable) have to register with the relevant trade insurance institution (Berufsgenossenschaft). Trade insurance institutions (Berufsgenossenschaft) are the carriers of German statutory accident insurance (Unfallversicherung). It is also highly recommended to obtain a membership with a federal association (Bundesverband) relevant to your business.
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An overview of the most important details
- Practising a trade is subject to the German Trade Act, or the Gewerbeordnung (GewO).
- Anyone wishing to pursue a trade needs a trade licence (Gewerbeschein).
- Some trades require permits, others mandate police checks.
- You need a valid ID to register your trade.
- Depending on the trade, more documents may have to be submitted such as permits, craftsman’s card/Handwerkskarte, commercial register (Handelsregister) entry (if applicable), residence permit (Aufenthaltserlaubnis), police clearance certificate (Führungszeugnis) excerpt from the central commercial register (Gewerbezentralregister), etc.
- Registration takes place at the trade office responsible for the municipality/city in which you are establishing your business.
Deregistering your trade
If you want to terminate or relocate your business, you have to deregister your trade. You also have to deregister and reregister if you want to change your business’s legal company form. Depending on your municipality, you may be able to do so online, in person, by mail or by fax. Simply fill out the form with the same details you provided when registering. It doesn’t cost anything to deregister, and you don’t need to submit any additional documents.
The information published on our site is all written and checked by experts with the greatest care. Nevertheless, we cannot guarantee the accuracy of this information, as laws and regulations are subject to constant change. Therefore, always consult an expert in a specific case – we would be happy to connect you with the right professional.
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