How to open a shisha bar: Everything you need to know to get started in Germany

The dream of opening your own shisha bar can come true if you plan it well. That is, you need to know about formation, costs, location, marketing and government regulations.


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Andreas Munck

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Do you have 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.


How to structure a shisha bar business: Which legal form suits me?

If you want to form a company in Germany, you must 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 an Einzelunternehmen (sole proprietorship). 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:

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Forming a shisha bar as a UG (haftungsbeschränkt)

The UG (haftungsbeschränkt) stands for Unternehmergesellschaft (haftungsbeschränkt)—in English, an entrepreneurial company (limited liability)—and is a special form of GmbH (see below). 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 abbreviation GmbH stands for Gesellschaft mit beschränkter Haftung, which in English means ‘company with limited liability’. The main feature of the GmbH is its limited liability – shareholders cannot be held liable for damages with their private assets. The share capital required to structure your business this way is €25,000 – making it a trusted company type in the German market.

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

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

Forming a shisha bar as an Einzelunternehmen (sole proprietorship)

The Einzelunternehmen (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 GbR

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

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 your chosen legal form, 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.

Gewerbeanmeldung (trade registration)

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

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

Entry in the Handelsregister (commercial register)

The Handelsregister (commercial register) is a public register that records registered merchants in district Handelsgericht (district register courts). If you set up your business as a GmbH or UG, you have to enter it in the commercial register.

IHK membership (chamber of commerce & industry)

The Gewerbeamt (trade office) will inform the IHK and send you the necessary documents. When registering a business, membership in the IHK responsible for your business is mandatory.

[BEGIN: Insert an Image between this tag]

Andreas Munck

[END insert Image]

Want to open your shisha bar 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.


Berufsgenossenschaften (employer’s liability insurance associations)

Berufsgenossenschaften (employer’s liability insurance associations) are the providers of statutory social accident insurance—called gesetzliche Unfallversicherung in Germany—for companies and their employees in Germany. Be sure to register at the proper association—the obligation to do so still stands, with or without staff. If you are unsure which associations to register with, the Deutsche Gesetzliche Unfallversicherung (DGUV) can help you (but probably only in German).

DEHOGA: The German hotel & catering association

If you want to operate your shisha bar independently, join the Deutscher Hotel—und Gaststättenverband e. V. (DEHOGA) – the German hotel and catering association. DEHOGA represents the interests of hotels and restaurants in public and political life.

What are the special requirements?

The Gaststättengesetz (hospitality law) regulates what you may and may not do as a shisha bar operator. It contains legal requirements that every gastronome must follow. Be sure to consider these requirements before opening your bar. Let’s go through the most important ones below.

Nichtraucherschutzgesetz (non-smoking protection act)

There are different regulations for protecting non-smokers in restaurants throughout Germany. The choice of your location is, therefore, critical. Smoking in Bavaria, Saarland, and North Rhine-Westphalia is 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 still allow smoking in restaurants but in separate rooms. Some others have exemptions for one-room smoking bars.

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

Ausschankgenehmigung: Hospitality permit

Since your guests are thirsty, a licence to serve alcohol is essential for any bar. Although offering hookahs is your core business, selling drinks will probably generate a large part of your profits. To do this, you’ll need a Schanklizenz (liquor license) to sell alcoholic beverages. You must apply for an Ausschankgenehmigung (a permit to serve food/drinks) or a Gaststättenerlaubnis (hospitality/restaurant license). The application must be submitted to your local Gewerbeamt (trade office) or Ordnungsamt (public order office).


What legal pitfalls should I look out for?

Laws change quickly. So it’s crucial to stay up to date. Currently, there are no EU bans on the flavours of 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.

As an independent gastronome, forward-looking planning, e.g., for agreements and contracts with suppliers, is important. Also, inform yourself regularly with news from your industry.

What does it cost to open a shisha bar in Germany?

Before opening your shisha lounge, prepare a business plan and calculate all fixed costs. These include the lease of your premises, electricity and heating expenses, 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 considered. Otherwise, there are costs for your products, drinks and staff.

Including these items in your cost planning is essential if you need assistance with accounting and taxes. 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 your staff’s.

How do you find suppliers for your shisha bar?

Ideally, you should create a network of suppliers before opening your shisha bar. Beverage wholesalers can help you keep acquisition costs low and calculate them correctly. Please 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.

Where can I open a shisha bar?

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

Do I need previous experience?

Know-how is always essential on the path to self-employment. However, even without special training, you can realise your dream of owning your restaurant. Knowledge of the gastronomy sector is not necessary, but it is undoubtedly an advantage. If you only have a little prior knowledge of the subject, 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 into practice. Work in a shisha bar, get to know essential processes up close and learn first-hand what’s important.

How do I develop a successful concept?

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 your bar’s thematic design. Be creative and formulate a concept for your business idea.

Differentiate yourself from others & 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 quickly achieve a high degree of awareness. Why should shisha lovers come to your bar? Promotions like 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 cleverly using targeted advertising activities.

Don’t forget to advertise!

Advertising on one’s behalf is enormously vital for every new company. If your budget is tight, you can reach many people cost-effectively through social media channels. Create your 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 well received and ensure a positive image right from the opening. And don’t underestimate the power of word of mouth.

Now, you only have to put your business idea into practice. We wish you the best of luck in opening your shisha bar!

[BEGIN: Insert an Image between this tag]

Andreas Munck

[END insert Image]

Do you have 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.


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