Opening a Kita: How to establish a childcare centre in Germany

There is a huge demand for childcare centres all over Germany. Unfortunately, the government doesn’t make it easy to set one up. We’ll take you through opening a Kita, getting the necessary operating licence and writing your business plan.

 

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Andreas Munck

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Do you have questions about setting up a Kita?

  • Startup expert
  • 10+ years experience

Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.

 

What is the best legal form for your new Kita?

If you want to open a Kita, you first have to choose a legal company form. Kitas are usually established using the following legal forms.

Opening a Kita as a non-profit GmbH

Forming a gGmbH is a common alternative to opening a Kita as an association (Verein). A ‘gGmbH’ refers to a non-profit GmbH (gemeinnützige GmbH), a legal company form with limited liability. Just like a gGmbH, kindergartens exist to pursue a charitable purpose. gGmbHs may take the form of care, cultural or educational facilities.

The gGmbH enjoy tax privileges and are partially exempt from certain taxes. Only the gGmbH’s share capital is at risk, not the shareholders’ private assets.

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Opening a Kita as a non-profit association

The advantages of opening a childcare centre as an association are the association’s limited liability and the tax privileges you enjoy as the centre’s founder. This legal form requires you to find seven founding members and draw up articles of association. Private Kitas are often founded as the result of a parent initiative aimed at improving their local childcare situation.

Associations enjoy tax privileges and are partially exempt from certain taxes. There is also relatively little bureaucracy to deal with when founding the association, and no share capital is required to get started.

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How do I register a Kita?

Opening and registering your Kita business

Whichever legal form you choose, you will need to register your Kita with your local Gewerbeamt (trade office). Once you have registered your business with the trade office, you will automatically be contacted by your local Finanzamt (tax office) to register for tax. Once the tax office has checked your documents, you’ll receive your Steuernummer (tax number), which you need to send invoices. If you set up your Kita as an association, you will only need to register your business when it generates enough income to become subject to VAT. If this is the case, consult a tax adviser.

Business registration in Berlin (downloadable form)
Business registration in Hamburg (downloadable form)
Business registration in Munich (downloadable form)
Business registration in Cologne (downloadable form)
Business registration in Frankfurt (downloadable form)

Do I need to enter my Kita in the Handelsregister (commercial registry)

The Handelsregister (commercial registry) is a public index of registered merchants and incorporated entities under the jurisdiction of their respective registry court. Companies with the legal forms GmbH and gGmbH must be entered into the commercial register.

What do I need to know about Berufsgenossenschaften (trade insurance institutions) & Kitas?

As carriers of German statutory accident insurance, trade insurance institutions (BGs, or Berufsgenossenschaften) are responsible for companies and their employees. If you open a Kita, do register yourself with the appropriate institution. In your case, that would be the Berufsgenossenschaft für Gesundheitsdienst und Wohlfahrtspflege (social accident insurance institution for health and welfare services).

If you have further questions, the German statutory accident insurance umbrella association, DGUV (Deutsche Gesetzliche Unfallversicherung) can be reached at +49 800 60 50 40 4. Here is a list of trade insurance institutions and their areas of responsibility here.

Federal associations for Kitas

We recommend membership in the Bundesverband für Kindertagespflege e.V. – Germany’s federal daycare association.

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What are the licences for opening a Kita?

Childcare is a task that carries great responsibility and with it goes a lot of administration. Below is a list of the essentials:

  • An operating licence and prove that the children enrolled in your Kita will be cared for by qualified professionals. Your local youth welfare office (Jugendamt) will issue your licence once you meet all requirements. To apply, you need a detailed business concept that includes your pedagogical goals, your professional qualifications and examples of day-to-day routines, among other things.
  • A suitable building designed for commercial use. And of course, you can’t form a company without a detailed finance plan.
  • If you plan to open a Kita as a gGmbH or as an association, you must also submit an application for non-profit status (Antrag auf Gemeinnützigkeit).
  • Be sure to take out the most important insurance such as commercial insurance, business liability insurance and business contents insurance.

How do I create a business plan for a Kita?

To gain the trust of potential clients, you need to have a convincing pedagogical concept. Your plan also has to ensure financial stability. We’ve put together a few examples of how you can draw up future-proof business and financial plans.

What is your pedagogical concept?

Many Kitas run special learning programmes, take part in the ‘Haus der kleinen Forscher’ project aimed at fostering an interest in the natural world, or go on regular field trips to exciting educational institutions such as observatories. Many childcare centres even offer foreign language courses.

Are there open spaces for playtime?

Kids should generally be able to spend a lot of time playing outdoors; this should absolutely be taken into consideration when choosing a location. Kitas can rarely forego having their own garden or playground.

Who will work with the children?

The people behind your concept are, of course, extremely important. Will you be working with trained and qualified teachers? Will you employ interns and assistants?

How will food be provided?

Households are growing more and more health-conscious, and parents increasingly value fresh, home-cooked meals for their kids. Do consider integrating your own meal program into your Kita’s daily routine or finding a good caterer in your city.

Opening a Kita: Important aspects of your finance plan

Every new business needs capital. If you want to open your own Kita, you may be able to obtain access to government support. To receive such support, you have to have already been accepted into your youth welfare office’s requirements plan. Your youth welfare office is the best source of information regarding government subsidy programs for entrepreneurs provided by federal states and municipalities. Your financial plan should address the following costs:

  • Capital requirements for the business’s initial phase
  • Costs for consultation and bureaucracy/lawyers during the founding phase
  • Capital requirements for furnishing the Kita’s location (furniture, toys, hygiene products)
  • Ongoing operating costs (rent, electricity, heating, EDP)
  • Taxes and insurance
  • Financial reserves for unexpected events

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How should I shape my childcare concept?

Anyone thinking about opening a Kita must develop a concrete childcare concept. Your concept should clearly answer the following questions:

  • What is your pedagogical vision?
  • Who are the childcare practitioners?
  • What learning opportunities will be offered?
  • Will spots be offered to children with special needs?
  • How large will the groups be?
  • How much influence will parents have?
  • What age group will be served?
  • How will business days and holidays be handled?
  • How will children be settled into your new Kita?
  • What special rules will be defined (mandatory vaccination, etc.)?
  • How will daily routines be managed?

 

What should I look for in a Kita location?

Finding the right location to open your Kita is of utmost importance. The legal specifications governing this decision are especially strict, as building safety and security are particularly important when it comes to childcare centres. These specifications address details such as stair safety. There must also be group rooms where the children can play safely. An outdoor space, or at least a nearby playground, is usually required. A sufficient number of washrooms and lavatories dependent on the number of children enrolled in the Kita is a must. Spaces for napping and a room to store buggies are also among the minimum requirements.

How many people should my Kita employ?

The ratio of children to childcare practitioners is defined by law with the aim of ensuring adequate support and safety for each child. Each federal state sets its own ratio. On average, the ratio of childcare practitioners to Kita-aged children is 1:6.
Moreover, caring for children responsibly means employing trained and qualified professionals, such as teachers and educators.

Can I open a Kita in Germany without a pedagogical background?

As a founder, you are not required to have completed any studies in education. However, you must be able to prove to your youth welfare office that you will be employing qualified professionals. Kitas are often founded by parents who are aware of how high the demand for open Kita spots is and want to provide their children with an additional daycare option.

Who will be offered spots in your Kita, and what age group will your Kita serve?

As with establishing every other business, your Kita will target a specific market. Be sure to answer the following questions in your business plan:

  • What age groups will my Kita serve?
  • Will I offer spots for integration?
  • Will my concept target a certain market, such as families who especially value closeness to nature?

 

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How should I advertise my newly founded Kita?

Since the demand for open Kita spots often outweighs the supply in most federal states, you most likely won’t have trouble finding enough families to fill your open spots. After you officially register your Kita, the youth welfare office will include you in their Kita list. Most parents turn to this list when their child is born or when they no longer have the capacity to care for their child during the day after their parental leave comes to an end. Many cities also maintain a Kita-Planer, which lists all Kitas and is used to find and reserve Kita spots. It would be wise to create a website to give parents a good first impression of your new Kita.

Which legal form best suits your company?
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Andreas Munck

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Got questions about setting up a business in Germany?

  • Startup expert
  • 10+ years experience

Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.

 

Want to know more about starting a business in Germany?

The ultimate guide to starting a business:

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