Current for 2026•As of: July 2026

Startup Cost Calculator 2026 Compare GmbH, UG & Costs.

GmbH from €26,005, UG from €1,475, or a sole proprietorship from €0: calculate 2026 startup costs and find the most tax-efficient legal form.

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Expected annual profit

EUR/year
10,000 EUR/year500,000 EUR/year

Profit strongly influences the optimal legal form

Industry & activity

person(s)
1 person(s)5 person(s)

Director's salary (for UG/GmbH)

EUR/year
0 EUR/year150,000 EUR/year

The director's salary reduces the corporation's taxable profit

Options

Which legal form suits me?

  • Sole proprietorship: Ideal for starting out at low cost
  • UG: Limited liability with little capital
  • GmbH: Professional, tax-optimal from about €100,000 profit
ComparisonSole prop.UGGmbH
Formation costs16,235 €11,490 €36,974 €
Tax/year13,035 €1,440 €744 €
Net/year43,815 €40,687 €39,899 €

Startup costs compared

Sole proprietorship

€50.00

Simplest business form, with unlimited liability

UG (haftungsbeschränkt)

€2,875.00

Mini-GmbH with low starting capital, but a mandatory reserve requirement

GmbH

€26,725.00

Classic corporation with full liability protection

Formation costs

€50.00

Ongoing/year

€3,150.00

Cost breakdown (one-time)

  • Trade registration(100 %)€50.00

One-time formation costs

Share capital-
Trade registration€50.00
Total€50.00

Ongoing costs (annual)

Bookkeeping€1,800.00
Tax advisor€1,200.00
Chamber of Commerce (IHK) dues€150.00
Total€3,150.00

Tax burden (annual)

Income tax€8,065.00
Trade tax€4,970.00
Effective tax rate22.93%

Characteristics

Unlimited

Liability

You are personally liable with your entire private assets

EÜR

Bookkeeping

Simple cash-basis accounting (EÜR) is sufficient

Advantages

  • Almost no formation costs
  • No minimum capital required
  • Simple cash-basis accounting (EÜR) possible
  • Full decision-making freedom

Disadvantages

  • Unlimited personal liability
  • The company cannot be sold
  • Progressive income tax at high profits
  • Less professional image

Important note

These calculations are for non-binding information only and do not replace professional tax advice. All information without guarantee. Learn more

Sources & calculation basis

Our calculations are based on the following official sources (as of: July 2026):

Related guides

Becoming Self-Employed

Choosing the right legal form

Compare a sole proprietorship, UG and GmbH at a glance

Choosing your legal form is one of the most important decisions when starting a business in Germany. It affects not only your formation costs, but also your ongoing costs, tax burden, liability, and the image of your company. Our calculator helps you find the optimal legal form based on your expected profit.

Comparing the legal forms

Sole proprietorship
Ideal for freelancers and founders with little starting capital. No formation costs, simple bookkeeping, but unlimited personal liability.
UG (haftungsbeschränkt)
The "mini-GmbH" with share capital from €1. Limited liability at low formation costs, but a mandatory reserve requirement of 25%.
GmbH
The classic choice for growth. €25,000 share capital, full liability protection, tax advantages from about €80,000 profit.

Sole proprietorship: the simplest start

The sole proprietorship is the simplest and cheapest legal form. It is especially suited to freelancers and founders with little starting capital.

Advantages of a sole proprietorship

  1. No formation costs: Aside from trade registration (€30-65) for trades. Freelancers can start immediately.
  2. No minimum capital: You can start without any starting capital and bootstrap your business.
  3. Simple bookkeeping: Cash-basis accounting (EÜR) instead of double-entry bookkeeping. Less administrative effort.
  4. Full decision-making freedom: No co-shareholders, no shareholder meetings. You alone decide on your business.
Important note on liability:

You are personally liable with your entire private assets. At higher profits (from about €100,000) the progressive income tax (up to 45%) becomes a problem. From this point, it is worth examining a GmbH.

UG (haftungsbeschränkt): the mini-GmbH

The Unternehmergesellschaft (UG) is a variant of the GmbH with reduced share capital. It suits founders who need limited liability with little capital.

Special features of the UG

  1. Flexible share capital: Possible from €1 (recommended: €1,000-3,000 for credibility and liquidity).
  2. Limited liability: You are liable only with the company’s assets, not your private assets.
  3. Mandatory reserve requirement: 25% of the annual surplus must be set aside as a reserve until €25,000 is reached.
  4. Conversion to a GmbH: Once €25,000 in reserves is reached, the UG can be converted into a regular GmbH.

Example: UG formation with a standard template (Musterprotokoll)

Example: UG formation with a standard template (Musterprotokoll)
ItemAmount
Share capital€1,000.00
Notary (standard template)€200.00
Commercial register€225.00
Trade registration€50.00
Total formation cost€1,475.00

GmbH: the classic choice for growth

The Gesellschaft mit beschränkter Haftung (GmbH) is the classic German corporation. It offers maximum liability protection and tax advantages at higher profits.

Advantages of a GmbH

Tax advantages
About 30% total tax burden (corporate income tax + trade tax) instead of a progressive income tax of up to 45%.
Full liability protection
Liability is limited to the company’s assets. Your private assets are protected.
Highest reputation
Maximum credibility with business partners, customers and banks. Important for B2B.
Flexible use of profits
No mandatory reserve requirement as with the UG. Profits can be distributed freely.

From what profit does a GmbH pay off?

From what profit does a GmbH pay off?
ItemAmount
Annual profit€100,000.00
Income tax (sole proprietorship)− €30,419.00
GmbH taxes (corp. + trade tax)− €27,849.59
Tax savings with a GmbH€2,569.41
Pro tip:

Combine a director’s salary with profit distributions for optimal tax planning. A tax advisor can work through your personal situation and find the ideal balance.

Startup costs at a glance

All cost types at a glance

Cost typeSole proprietorshipUGGmbH
Share capital€0from €1€25,000
Notary€0€200-400€750-1,500
Commercial register—€225€225
Trade registration€30-65€30-65€30-65
Total (typical)€30-65€1,475-1,725€26,005-26,790

Important notes on the costs

  1. Regional differences: These figures are nationwide benchmarks. Notary and consulting costs can be higher in major cities.
  2. Watch ongoing costs: For a UG/GmbH, monthly costs are added for a business account (€10-30), a tax advisor (€100-300), and Chamber of Commerce (IHK) dues (about €150-300/year).
  3. Budget for tax advice: Professional advice before founding (about €500-1,500) can avoid costly mistakes and optimize your taxes.
  4. Simplified presentation: The calculator does not account for special cases such as holding structures, multiple shareholders, or foreign shareholdings.

Frequently asked questions about forming a business

Everything important about the GmbH, UG and sole proprietorship

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.

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