Registering a Business in Germany: Step by Step

The first client is here, the idea is set — and then comes the question that stops many founders in their tracks: do I need to go to the trade office now, and what actually happens after that? The good news: the registration itself takes about 30 minutes. This guide walks you through every step, cost, and deadline — from the registration to the tax office questionnaire to trade tax.

In short: You must register a Gewerbe (business) if your activity is commercial (§ 15 EStG) — meaning it is not a liberal profession. The sequence: (1) register at the Gewerbeamt (trade office, €20–60, when you start), (2) the Fragebogen zur steuerlichen Erfassung (tax questionnaire) automatically follows via ELSTER, Germany’s official filing portal (within 1 month), (3) mandatory IHK chamber membership. You pay Gewerbesteuer (trade tax) only above €24,500 profit (§ 11 GewStG) — and it is credited against your income tax (§ 35 EStG).

Gewerbe or Freiberufler? Classify first, register second

Before you register anything, settle one question: are you even carrying on a commercial activity? Because Freiberufler do not need a Gewerbe.

• Freiberufler (liberal professionals, § 18 EStG): listed professions such as software developers, writers, journalists, graphic designers with original creative work, consultants with a degree, lecturers, translators, architects, engineers, doctors. They do not go to the trade office.
• Gewerbetreibende (commercial operators, § 15 EStG): everything else — trade (online shop, Etsy, eBay), production, crafts, hospitality, coaching without a teaching qualification, most influencers, and many services. They must register a Gewerbe.

The full distinction, including the grey-area professions, is covered in a separate post: trade vs. freelancer. For the rest of this guide we assume your activity is commercial, so you need the registration. For an overview of every getting-started topic, see our for freelancers page, and the Restio homepage shows how it supports you.

When you must register a business

A Gewerbe exists when you carry on an activity independently, on a lasting basis, with the intention to make a profit, visibly on the market — and it is neither a liberal profession nor purely private asset management. In practice:

• As soon as you offer or sell your first commercial service. Not only above a certain turnover.
• Even as a side business. Selling something alongside your job still requires a Gewerbe. See side business while employed.
• Even as a Kleinunternehmer (small business). The small-business scheme (§ 19 UStG) only concerns VAT, not the duty to register.

Pure preparation — building a website, printing business cards, having conversations — does not trigger the duty yet. But the moment you actually take orders or sell goods, you must register (§ 14 GewO).

Registering a business: the three steps

Step 1: Gewerbeanmeldung at the trade office

This is the actual act. The responsible body is the Gewerbeamt or Ordnungsamt of your city or municipality. Many towns now offer this online; otherwise you go in person or send the form by post.

What to bring:

• ID card or passport
• for licensed trades (e.g. hospitality, security, real-estate broking): the relevant permit
• for non-EU nationals, where required, a residence title that permits self-employment
• the completed “Gewerbeanmeldung” form (GewA 1)

What the form asks: your personal details, the exact activity (“retail of textiles”, “web design and online shop”), the start date, whether it is your main or a secondary occupation, and the business address.

Cost: a one-time €20 to €60, depending on the city. This is the only direct fee of the registration.

Time: the registration itself takes a few minutes. You usually receive your Gewerbeschein (business licence document) on the spot.

The convenient part: the Gewerbeamt automatically notifies other bodies — the Finanzamt, the IHK or crafts chamber, the statistical office, and, depending on your trade, the trade cooperative for accident insurance. You do not have to contact them one by one.

Step 2: Tax questionnaire (Fragebogen zur steuerlichen Erfassung) via ELSTER

Because the trade office notifies the Finanzamt, you shortly receive a prompt to complete the Fragebogen zur steuerlichen Erfassung (tax registration questionnaire). For several years this has been mandatory through ELSTER, the official portal of the German tax administration. Deadline: within one month of starting the activity (§ 138 AO).

The key fields:

1. Personal details and tax ID number (the 11-digit lifelong number)
2. Type of activity
3. Estimated turnover and profit for the current and following year — estimate realistically, as it influences possible advance payments
4. VAT choice: the Kleinunternehmer scheme (§ 19 UStG) or standard taxation
5. Bank details and, optionally, a direct-debit mandate

On VAT, most founders choose the Kleinunternehmer scheme: if you stayed under €25,000 turnover last year and expect under €100,000 this year, you can waive charging VAT (§ 19 UStG). That saves you monthly VAT filings. If you have many purchases with input VAT, or mostly business clients, standard taxation is sometimes the better call.

After you file, it usually takes 2–4 weeks for the Finanzamt to send your Steuernummer (tax number). Only with it can you issue formally correct invoices.

Step 3: IHK or crafts chamber membership

With the business registration you automatically become a mandatory member of the Chamber of Industry and Commerce (IHK) — or, for crafts activities, the crafts chamber (HWK). You cannot opt out; it is set by law.

The good news: the base fee depends on your trade profit, and there are generous exemptions for small founders:

• Traders not entered in the commercial register with a profit up to €25,000 per year are generally fee-exempt.
• New founders get additional relief in their first years (fully or partly waived, depending on the chamber’s statute).

Above your exemption threshold, the fee is usually in the low three figures per year, and it is deductible as a business expense.

Trade tax (Gewerbesteuer): only above €24,500 profit

Many founders fear trade tax more than they need to, because there is a generous allowance.

• For sole proprietors and partnerships, a trade profit of €24,500 per year is tax-free (§ 11 (1) GewStG). Only profit above that is taxed.
• The amount depends on your municipality’s Hebesatz (multiplier, usually 350–500%). The formula: (trade profit − €24,500) × 3.5% base rate × Hebesatz.

And the real relief sits in § 35 EStG: the trade tax you pay is largely credited against your income tax — up to 3.8 times the base amount. At multipliers up to roughly 400%, the burden almost fully cancels out. In the end you rarely pay a noticeable amount twice.

Worked example, €40,000 profit, 400% multiplier:

• Trade profit: €40,000 − €24,500 allowance = €15,500
• Base amount: €15,500 × 3.5% = €542.50
• Trade tax: €542.50 × 400% = €2,170
• Credit against income tax under § 35 EStG: up to €542.50 × 3.8 = about €2,062
• Effective extra burden: only around €100 plus a little paperwork.

Below €24,500 profit you pay no trade tax at all.

Checklist and timeline for founders

1. Settle the classification — Gewerbe or Freiberufler? (beforehand, see above)
2. Check for a permit — does your activity need a licence? (beforehand)
3. Register at the Gewerbeamt — when you start, €20–60, Gewerbeschein on the spot
4. File the tax questionnaire via ELSTER — within 1 month, no fee
5. Wait for the tax number — 2–4 weeks, by post or ELSTER
6. IHK/HWK notice — arrives automatically, check the fee (often €0 as a founder)
7. Issue your first invoice — with the tax number and all mandatory details (§ 14 UStG)
8. Set money aside — reserve 20–30% of profit for later tax

For how to set up your bookkeeping and first invoice cleanly, see the freelancer registration guide.

Common mistakes

1. Registered too late. The duty starts when you begin the activity, not above a turnover threshold. A delay can trigger a fine.
2. Ignored the questionnaire. The ELSTER questionnaire is mandatory (§ 138 AO) — even for small businesses. Without it, no tax number.
3. Overestimated trade tax. None applies up to €24,500 profit, and above it the § 35 EStG credit kicks in.
4. Feared the IHK fee. As a founder with low earnings you usually pay €0.
5. Described the activity too narrowly. If you later widen your range, you must re-register. Phrase the activity a little more broadly on the form.

How Restio helps

A business registration is a chain of small switches, where the wrong field creates work later. Restio guides you through the start:

• Guided tax topics — Restio walks you step by step through the registration, the questionnaire, and the VAT decision, and tells you which entries fit together.
• Scan receipts — photograph your Gewerbeschein, purchases, and invoices; Restio sorts them into the right categories so your first tax return is easy.
• Deadline watcher — the one-month questionnaire deadline (§ 138 AO) and later dates stay on your radar without you tracking them yourself.
• Tax questions with the paragraph and the number — “When do I start paying trade tax?”, “Am I a Kleinunternehmer as an online shop?” — you get a clear answer with the relevant § and the current thresholds, in English or German.

Get Restio

Further reading

• § 14 GewO – duty to register a trade
• § 11 GewStG – base rate and allowance
• ELSTER – tax registration questionnaire

The registration looks bigger than it is. If you take the three steps in the right order — trade office, questionnaire, then the rest almost handles itself — you clear the bureaucratic part of your launch in a single afternoon and can get back to what matters: your clients.