Startup Cost Calculator 2026

Yes. Section 23 (1) of the German Corporation Tax Act reduces the rate step by step from the 2028 assessment period: 14 percent in 2028, 13 percent in 2029, 12 percent in 2030, 11 percent in 2031 and 10 percent from 2032 onwards. Up to and including 2027 the rate stays at 15 percent. For a GmbH with €100,000 in profit that means roughly €5,000 less corporation tax per year from 2032 – the calculator applies whichever rate is in force.

A GmbH becomes tax-attractive at an annual profit of roughly €80,000-100,000. Beyond this point, the progressive income tax (42-45%) exceeds the GmbH’s combined corporate income tax and trade tax (about 30%). In addition, as managing director you can pay yourself a salary, which reduces the GmbH’s taxable profit.

The UG (Unternehmergesellschaft) is a variant of the GmbH with reduced share capital. While a GmbH requires €25,000 in share capital, a UG can already be formed from €1 (recommended: €1,000-3,000). However, the UG must set aside 25% of its annual surplus as a reserve until €25,000 is reached. It can then be converted into a regular GmbH.

Sole proprietorship: about €1,000-2,000/year (tax advisor, insurance). UG/GmbH: about €3,000-5,000/year (tax advisor, business account, annual financial statements, Chamber of Commerce dues). A GmbH/UG also incurs bookkeeping costs and, where relevant, shareholder meeting costs.

Yes, freelancers can form a GmbH, but then partly lose their privileges. As a freelancer you pay no trade tax and can use simple cash-basis accounting (EÜR). Forming a GmbH makes you liable for trade tax and requires double-entry bookkeeping. This can still be worthwhile, for example at high profits (tax savings), for liability protection, or for a better image with large clients.

The €25,000 share capital (or from €1 for a UG) must be paid into a business account and remains in the company. It is available for operating expenses, investments, and ongoing costs. In the event of insolvency, it serves as liability capital for creditors. You cannot simply withdraw it privately - withdrawals happen via a director’s salary or profit distributions.

Sole proprietorship: optional, but recommended for trades. UG/GmbH: practically indispensable. Drafting the articles of association, registering with the commercial register, and ongoing bookkeeping (double-entry bookkeeping, annual financial statements) require expertise. A tax advisor costs about €1,500-3,000/year, but prevents costly mistakes and optimizes your tax burden.

Forming a GmbH in 2026 typically costs: €25,000 share capital (stays in the company), notary €750-1,500, commercial register entry €225, trade registration €30-65. Total: about €26,005-26,790. With individually drafted articles of association and advisory costs, it can reach €27,000-30,000. The share capital is then available for operating expenses.

Founders with little starting capital should first consider a sole proprietorship (€0 formation cost for freelancers, €30-65 trade registration for trades). Those who need liability protection can start with a UG from about €1,000-1,500 share capital plus formation costs. The UG can later be converted into a GmbH once €25,000 in reserves is reached.