Starting a Startup Company in Germany

Can a foreigner / non-EU founder start a startup in Germany?

Yes. The nationality and residence of GmbH and UG shareholders and managing directors are not restricted; the company simply needs a German business address. You can own and direct a German GmbH or UG from abroad.

The key distinction is that ownership is not the same as a visa. Forming and owning the company is one process; living in Germany to run the business on-site is another. A non-EU founder who wants to reside in Germany and operate the company in person needs a separate residence permit under §21 AufenthG (gtai; §21). We cover that next, and you can find more detail for foreign / non-resident founders (the §21 visa caveat) on the dedicated page.

The founder visa: §21 AufenthG self-employment permit

The German residence permit for self-employment is granted under §21 AufenthG. §21(1) requires three things: (a) an economic interest or a regional need exists; (b) the activity is expected to have a positive effect on the economy; and (c) the financing of the project is secured by equity or a loan commitment.

A few points founders ask about most:

• No fixed minimum capital. There is no magic euro threshold for the entrepreneur permit. Adequacy of financing is assessed against your specific business plan, so do not anchor on a single number.
• German-university graduates and certain researchers (§21(2a)). They shall be granted a self-employment permit deviating from §21(1) where the activity connects to their studies or research, so the strict economic-interest and financing test is relaxed.
• Freelancers (§21(5)). A permit for freelance (liberal-profession) work may be granted deviating from §21(1); the economic-interest requirement does not apply in the same way.
• Applicants over 45 (§21(3)). A permit shall only be granted with adequate pension provision.
• Settlement permit. Self-employed founders under §21(1) may apply after 3 years if the business is successfully established and income is permanently sufficient.

Keep these two apart: company formation and the residence permit are separate processes. A non-resident can own and direct a German GmbH or UG without ever living in Germany; the §21 permit is only needed to reside and operate on-site (gtai; §21 AufenthG).

Funding your German startup

Germany has a deep funding stack for startups, from grants and angel-matching subsidies to one of Europe's larger venture-capital markets. Here is what each route actually pays.

Venture capital (Germany 2025)

German startups raised approximately €8.4 billion in venture capital in 2025, up 19% on 2024. Bavaria/Munich led on volume with €3.3 billion across 148 financing rounds, while Berlin raised around €2.7 billion across 218 rounds, the most deal activity in the country. In total, there were 716 financing rounds in 2025 (startbase.com).

2025 at a glance: ~€8.4bn raised (+19%); Munich/Bavaria €3.3bn across 148 rounds; Berlin ~€2.7bn across 218 rounds; 716 deals in all.

EXIST start-up grant

The EXIST-Gründungsstipendium (Business Start-up Grant) supports students, graduates and scientists from universities and research institutions. The monthly stipend depends on your stage:

• Students: €1,000 per month
• Technical staff: €2,000 per month
• Graduates with a university degree: €2,500 per month
• Founders with a doctorate: €3,000 per month

On top of the stipend it pays a child allowance of €150 per month per child, material and equipment costs of up to €10,000 for an individual founder (up to €30,000 for a team), and €5,000 for coaching. The funding period is 12 months, teams may have up to three people, students must have completed at least half their studies, and graduates must apply within roughly five years of graduation (exist.de; science-startups.berlin). EXIST requires a university or research link, so it is not a general grant for every founder.

INVEST (matching business-angel capital)

INVEST – Zuschuss für Wagniskapital subsidises business-angel investment rather than paying the startup directly. It provides an acquisition subsidy of 25% of an angel's qualifying investment, with a minimum investment of €10,000, eligible investment of up to €200,000 per investor per round, and a cap of €100,000 in subsidies per investor. It also offers a 25% exit grant on profit. The startup must be innovative and no more than 7 years old, and must be pre-approved by BAFA (BAFA INVEST; business-angels.de).

Other routes (Gründungszuschuss, German Accelerator, KfW/state loans)

If you are not university-linked, other routes exist. The Gründungszuschuss (start-up grant from the Federal Employment Agency) is for founders coming off unemployment benefit: it pays the most-recent benefit plus €300 per month in phase 1 (around six months), then €300 per month flat for up to a further nine months. The German Accelerator ("Market Access") programme helps established German startups expand into the US, Asia, Latin America, Africa and Europe; it is free of charge, takes no equity, lasts 3-6 months, and includes an immersion week, a mentor network and a tailored market-entry plan. Beyond these, KfW and state development banks offer founder loans.

Where to base it: Berlin vs Munich

Berlin and Munich pull in different directions, and it is worth not flattening the picture to "Berlin is biggest". Berlin has the highest deal count and the densest ecosystem, with the most financing rounds (218 in 2025). Munich and the wider Bavaria region attract the largest capital volume (€3.3 billion in 2025), driven by deep-tech and larger rounds. If you are raising many smaller rounds and want ecosystem density, Berlin leans your way; if you are a capital-intensive deep-tech venture, Munich's volume is the draw (startbase.com 2025).

How to incorporate (startup summary)

The incorporation itself is short. In outline:

1. Choose the entity. A UG to bootstrap, or a GmbH if you are investor-ready; decide early if a raise is planned.
2. Reserve the company name and draft the articles. A Musterprotokoll works for a simple single-founder set-up; use bespoke articles where a cap table or vesting is expected.
3. Notarise the articles before a German notary. Video notarisation has been possible since 2022, so no travel is required.
4. Open a German business bank account and pay in capital. At least €12,500 for a GmbH, the full amount for a UG.
5. Handelsregister entry. The notary files electronically and the entry typically follows in roughly 2-6 weeks.
6. Gewerbeanmeldung and Finanzamt registration. Trade-office registration plus your tax number and VAT ID.

Costs, separate from the €25,000 capital, run roughly as follows: notary from about €350 (model protocol) up to about €750+ (bespoke articles); the Handelsregister court fee around €150; the Gewerbeanmeldung about €15-65; and advisory commonly in the low four figures. The timeline is typically 2-6 weeks from notarisation to Handelsregister entry, and commonly 4-6 weeks all-in, depending on notary scheduling, bank-account opening and any foreign-document handling. For the full picture, see the company formation overview.

Building a startup in Germany? Talk to our English-speaking team and we will handle the paperwork.