Opening a shisha bar in Germany? – These tips will help you do just that

updated on 31. January 2019 16 minutes reading time
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The dream of opening your own shisha bar can come true if you plan it well. What all does it take to open a shisha bar? Here you’ll find answers and tips for the most important topics such as formation, costs, location, marketing and know-how for your successful establishment.

Clarifying the legal form: How can you open a shisha bar?

If you want to found a company in Germany, you have to decide which legal form you want to use. For hookah bars and shisha cafés, the UG (haftungsbeschränkt), GmbH or GbR legal forms are the most frequent choices. When opening a shisha bar, you could also think about establishing a sole proprietorship (Einzelunternehmen). Be aware that the individual legal forms also differ from a tax perspective. Here’s a brief overview of the legal forms suitable for running a shisha bar:

Which legal form works best for you? will find you the right expert for the advice that fits your business idea. The best possible start: Book a legal consultation now!

Forming a shisha bar as a UG (haftungsbeschränkt)

The UG (haftungsbeschränkt) stands for Unternehmergesellschaft (haftungsbeschränkt) – in English, entrepreneurial company (limited liability) – and is a special form of GmbH. It’s particularly suitable for shisha business founders who want to set up a limited liability company with little start-up capital.

Advantages: A UG only requires a share capital of at least one euro, which means the total formation costs are lower than those of a GmbH.

Liability: A UG has limited liability. That means that partners are generally liable exclusively with the company assets and not with their private assets.

Forming a shisha bar as a GmbH

The shareholders of a GmbH, or limited liability company, require a total share capital of €25,000.

Advantages: The GmbH is a very popular and highly respected form of business, in Germany and also abroad.

Liability: The partners do not assume any personal liability, but are liable with the company assets.

Forming a shisha bar as a sole proprietorship

The sole proprietorship is the simplest way of forming a company with simple registration and no accounting obligation.

Advantages: No capital contribution is required.

Liability: Careful, a sole proprietor is also liable with his or her private assets.

Forming a shisha bar as a GmbH

The GbR, or partnership under civil law, is a variant of the partnership in which all partners are also managing directors.

Advantages: There’s no required minimum capital and a notary is not necessary.

Liability: The partners are also liable with their private assets.

Where do you have to register your shisha bar?

Depending on the legal form you have chosen, you will have to register your shisha lounge at various offices and institutions during or after its establishment. You can find out which registrations you’ll need for which legal form right here.

Registering a business

Regardless of the legal form you have chosen, you must register at the trade office (Gewerbeamt) responsible for your company headquarters. If you open your shisha bar as a sole proprietorship or as a GbR, a simple business registration is sufficient.

After registering with the trade office, the tax office (Finanzamt) will contact you for tax registration. After submitting the documents, you’ll receive your tax number and may issue invoices.

Entry in the Commercial Register (Handelsregister)

As a public register, the commercial register documents the registered merchants in the district of a competent register court (Handelsgericht). The GmbH and UG legal forms must be entered in the Handelsregister.

Chamber of Commerce and Industry (Industrie- und Handelskammer or IHK)

The IHK will be informed by the trade office and will send you the necessary documents. When registering a business, membership in the IHK responsible for your business is mandatory.

Want to realise your dream of having your own shisha bar in Germany, but don’t know exactly how to form your company? Arrange a free consultation with one of our advisors here! 

Trade association

Trade associations are the providers of statutory social accident insurance (gesetzlichen Unfallversicherung) for companies and their employees. Be sure to register at the corresponding trade association. Even without staff, you have to register with your responsible trade association. If you are unsure which of the numerous trade associations you need to register with, the German Social Accident Insurance (Deutsche Gesetzliche Unfallversicherung  or DGUV) will help you.

Hotel & catering association

If you want to be self-employed with your shisha bar, you can become a member of the Deutscher Hotel- und Gaststättenverband e. V. (DEHOGA) – in English, Hotel & Catering Association. DEHOGA represents the interests of hotels and restaurants in public and in politics.

Which requirements and permits are particularly important for your shisha bar?

For owners of a water pipe bar in Germany, the Restaurant Law (Gaststättengesetz) regulates what you may and may not do. It contains legal requirements that every gastronome must follow. Be sure to consider these requirements before opening your shisha bar. Some of the most important ones are listed here:

Observe the interpretation of the German Non-Smoking Protection Act (Nichtraucherschutzgesetz)

There are different regulations for the protection of non-smokers in restaurants throughout Germany. The choice of your location is therefore particularly important. In Bavaria, Saarland and North Rhine-Westphalia, smoking is totally prohibited in restaurants. Nevertheless, according to a court decision of the OVG Münster, water pipes may still be smoked in restaurants in NRW if they are filled with fruit or shiazo stones. All other federal states currently still allow smoking in restaurants, but in separate rooms. Some others have exemptions for one-room smoking bars.

In principle, you may not sell prepared food in smoking establishments. Separate non-smoking areas are one way of circumventing this restriction. Be sure to inform yourself about the legal situation in your federal state.

Apply for a bar permit

Since your guests are thirsty, a restaurant concession for serving alcohol is particularly important for any bar. Although smoking water pipes is your core business, you will probably generate a large part of your profits by selling drinks. You need a liquor license to sell alcoholic beverages. With an application to the trade office responsible for your company headquarters, you can obtain a bar permit.

Planning ahead: Which laws could endanger the success of my shisha lounge?

Laws change quickly. So it’s important to stay up to date. Currently, there are no EU bans on the flavours in shisha tobacco. However, a regulation for pipe tobacco could be introduced in the future.

Over the years, the non-smoker protection laws have continued to tighten. Yet some derogations concerning smoking water pipe tobacco could be repealed.

An amendment to customs legislation could also restrict or increase the price of tobacco imports.

Forward-looking planning, e.g. for agreements and contracts with suppliers, is important as an independent gastronome. Inform yourself regularly with news from your industry.

Costs: What does it take to open a shisha bar in Germany?

Before opening your shisha lounge, you should prepare a business plan and calculate all fixed costs. These include the lease of your premises, electricity and heating costs, various insurance policies and taxes. Of course, you’ll also want to play music for your guests. That means you’ll also have to pay royalties (GEMA). If you need to redo the interior of your bar, this cost must also be taken into account. Otherwise, there are costs for your products, drinks and staff.

If you need assistance with accounting and taxes, it’s important to include these items in your cost planning. In principle, outsourcing your accounting is recommended. By having your accounting done by experts, you avoid mistakes and don’t have to waste your time or that of your staff.

How do you procure the products for your shisha bar?

Ideally, you should create a network of suppliers before opening your shisha bar. Beverage wholesalers can help you to keep acquisition costs low and to calculate them correctly. Find out about the different types of tobacco and their advantages and disadvantages. Tobacco shipping services can help you make the right choice for your location. Once you’ve decided on the best suppliers, obtaining your goods can operate more smoothly.

Which location is suitable for a shisha bar?

The location of your shisha bar is one of the most important factors for your success. Think carefully about the nature of the competition in the area and whether your target group will be able to find your desired location. The easier your shisha bar can be seen from the street, the more casual customers will take an interest.

Do you need previous knowledge and experience to become self-employed in gastronomy?

Know-how is always important on the path to self-employment. However, even without special training, you can realise your dream of owning your own restaurant. Knowledge in the gastronomy sector is not absolutely necessary, but it is certainly an advantage. If you only have a little prior knowledge of the subject yourself, you can catch up with the help of guidebooks. Exchanging practical knowledge and experience with founders from the industry is invaluable. You can put most of your experience in practice. Work in a shisha bar, get to know important processes up close and learn first-hand what’s important.

How do you develop a successful concept for your new shisha bar?

Be different from the rest and try to distinguish yourself. That starts with the name of your bar. Check out the competition. If there are already several shisha bars and cafés in your immediate vicinity, you should work to distinguish yourself, e.g. with the thematic design of your bar. Be creative and formulate a concept for your business idea.

Differentiate yourself from others and offer additional benefits

What makes your shisha lounge special? Their unique selling point – starting with their names – should be a central theme in all decisions concerning the furnishings and selection of products. Align everything with this concept.

As a new company, you want to achieve a high degree of awareness quickly. Why should shisha lovers come to your bar? Promotions such as changing events, specials and discounts appeal to new customers. For example, offer free WiFi to encourage guests to stick around. You have to communicate these special features in a clever way using targeted advertising activities.

Don’t forget to advertise!

Advertising on one’s own behalf is enormously important for every new company. If your budget is tight, you can reach many people cost-effectively through social media channels. Create your own website using free templates. Advertise especially where your target group is and in media that uses them. The opening of your new shisha bar, in particular, should be intensely promoted with posters, flyers and stickers. Promotions with free drinks, free shishas, etc. are also well received and ensure a positive image right from the opening. And don’t underestimate the power of word of mouth.

Now all you have to do is put your business idea into practice. We wish you the best of luck for opening your own shisha bar!

Researching different business ideas in Germany? These articles may help inspire you:

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. assumes no liability for damages caused by errors in the texts.





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