Business licence Germany: Who needs one and how to apply

Who needs a business licence in Germany and who is exempt?

Anyone running a commercial trade (Gewerbe) must register at the Gewerbeamt and receive a Gewerbeschein (trade licence). Members of the liberal professions (Freiberufler) are exempt: they register only with the Finanzamt and skip the Gewerbeschein, trade tax, and chamber membership. The Finanzamt decides contested cases where freelance and commercial status overlap.

Germany recorded roughly 716,400 trade registrations (Gewerbeanmeldungen) in 2024, up 0.2% year on year, with 594,500 genuine new business formations, per the Federal Statistical Office (Destatis). Use the table below to find which registrations apply to you.

Liberal professions are defined in §18 of the Income Tax Act (Einkommensteuergesetz, EStG): doctors, lawyers, notaries, engineers, architects, tax advisors, auditors, journalists, translators, and similar scientific or artistic work. Many IT consultants qualify. Everyone else running a trade registers a Gewerbe.

What is the Gewerbeschein and how do you apply at the Gewerbeamt?

The Gewerbeschein is the trade licence issued by your local Gewerbeamt after you file a Gewerbeanmeldung (trade registration). Approval typically takes one to two weeks. The office must issue written confirmation of receipt within three days, under §15 GewO. No single national licence exists; this municipal registration is the near-universal baseline for traders.

You file with proof of identity, a business address, and a description of your activity using the correct WZ code (Klassifikation der Wirtschaftszweige, Germany’s version of the EU NACE classification). NAICS, the North American system, does not apply in Germany. Once you register, the Gewerbeamt notifies the Finanzamt automatically, which triggers your tax registration. Membership in the Chamber of Industry and Commerce (IHK) or Chamber of Skilled Crafts (Handwerkskammer, HWK) follows automatically for traders.

When do you need a Handelsregister registration?

Handelsregister (commercial register) entry is mandatory for corporations and for merchants above a size threshold. You file it at the local district court (Amtsgericht) through a notary. Sole traders below the merchant threshold and all Freiberufler skip it entirely. This is a conditional step, not a universal one.

Under §1 of the Commercial Code (Handelsgesetzbuch, HGB), a trade counts as a Handelsgewerbe, triggering registration, only if its type and scope require a commercially organized business operation. Corporations such as the GmbH, UG, and AG always register. A small sole trader stays out until turnover and scale cross the merchant line.

How do you register a GmbH in Germany?

A GmbH (Gesellschaft mit beschränkter Haftung, Germany’s limited liability company) forms through the notary, the register, and then the trade and tax offices. The sequence is fixed and runs in this order:

1. Notarize the founding deed and the articles of association.
2. Deposit the share capital, €25,000 nominal for a GmbH, with at least €12,500 paid in before registration, per §5 GmbHG.
3. Enter the company in the Handelsregister through your notary.
4. File the Gewerbeanmeldung at the Gewerbeamt.
5. Complete Finanzamt registration and apply for your VAT numbers.

A UG (Unternehmergesellschaft, haftungsbeschränkt) is the low-capital variant. It can form from €1 nominal, paid fully in cash, and must retain one quarter of annual profit until capital reaches €25,000, under §5a GmbHG.

How does VAT registration work in Germany?

VAT (value-added tax, Umsatzsteuer) registration is mandatory once you exceed the small-business turnover limits. Under the small-business rule (Kleinunternehmerregelung) in §19 of the VAT Act (Umsatzsteuergesetz, UStG), effective 1 January 2025, you keep VAT-exempt status only if prior-year turnover stayed at or below €25,000 and current-year turnover stays at or below €100,000. Above either figure, you must register and charge VAT.

Two numbers matter and they differ. The Steuernummer (tax number) comes from the Finanzamt after you file the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) on the ELSTER portal. The USt-IdNr (VAT identification number) for intra-EU trade comes only from the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt), delivered by post, never by email or phone. Processing runs roughly one to four weeks. VAT returns are filed monthly or quarterly as advance returns (Umsatzsteuervoranmeldung), plus an annual return, not annually alone.

Which sectors need special permits in Germany?

Regulated activities need a permit on top of the Gewerbeschein. The issuing body depends on the sector: chambers for skilled trades, municipalities for gastronomy and alcohol, and federal regulators for finance, telecoms, and health. The Gewerbeamt handles the general trade registration; the specialist permit comes from the relevant authority below.

The Handwerkskammer applies when your craft sits in Anlage A of the Handwerksordnung (for example electricians, plumbers, bakers), where a master qualification is required before you can register. BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht, the Federal Financial Supervisory Authority) runs a separate, lengthy licensing track for banks, insurers, and investment firms, often six to twelve months or more.

Can foreigners get a German business licence?

Yes. EU, EEA, and Swiss nationals have full freedom of establishment and need no residence permit to register a Gewerbe. Non-EU nationals, including US and UK citizens, generally need a residence permit allowing self-employment under §21 of the Residence Act (Aufenthaltsgesetz, AufenthG). The authority assesses economic interest, the viability of the business plan, and financing.

Berlin runs a well-known freelance route, the residence permit for self-employed professional activity (Aufenthaltserlaubnis für freiberufliche Tätigkeit), aimed at Freiberufler such as consultants, designers, and journalists. Regulated trades also require proof of professional qualifications, and corporate documents from abroad must be certified, apostilled, and translated.

How can a US company set up a business in Germany from abroad?

A US parent can own a German GmbH without anyone relocating, or it can register a branch (Zweigniederlassung). A subsidiary is a separate German legal entity with its own liability and its own Handelsregister entry. A branch is an extension of the US company, registered in the Handelsregister and the Gewerbeamt but not a separate legal person.

Notarization is required either in person or by power of attorney. Home-country documentation, such as the certificate of incorporation and board resolutions, must be certified, apostilled, and translated into German. No law requires a GmbH managing director to live in Germany, though banks and registries often want a local presence.

How much does a business licence cost in Germany?

A Gewerbeanmeldung costs roughly €15 to €65 depending on the municipality and legal form. Berlin charges €26 in person and €15 online. A GmbH costs far more once you add notary and court fees plus the €25,000 share capital. VAT registration itself is free.

Sector permits add cost on top, and BaFin licensing for financial institutions runs into the tens of thousands with capital requirements attached. Those figures vary by case, so budget them separately from the trade registration.

How do licensing rules differ in Berlin, Munich, and Hamburg?

Registration is municipal, so fees, portals, and scrutiny differ by city. Berlin registers through the district office (Bezirksamt), Munich through the Kreisverwaltungsreferat (KVR), and Hamburg through a centralized city-state service. Each sets its own fee and online options under its own fee regulation.

Relocating to a new municipality means re-registering there. A change of address or activity is a re-registration (Gewerbeummeldung), which costs €20 in Berlin’s Tempelhof-Schöneberg district, while deregistration (Gewerbeabmeldung) is free. Trade tax also varies by city through the municipal multiplier (Hebesatz), which is why Munich and Frankfurt cost more than many smaller towns.

What are the penalties for operating without a business licence in Germany?

Operating an unregistered Gewerbe is an administrative offense (Ordnungswidrigkeit) under the GewO. It can bring fines, back-dated registration, and a cease-and-desist order that halts the business until you register. In regulated sectors such as finance or healthcare, operating without the required permit can carry criminal liability.

The exact fine depends on the municipality and the severity of the breach, so published amounts vary. The safer read is procedural: register before you start trading, because §14 GewO requires the notification at the point you begin independent operation, not after.

How we help you register a business in Germany

Germany’s layered system rewards getting the sequence right the first time: entity choice, Handelsregister where it applies, the Gewerbeanmeldung, Finanzamt and VAT registration, then any sector permit. This page offers no vendor comparison, because the real work is running those steps correctly and keeping the entity compliant afterward.

Commenda handles that end to end. Commenda’s incorporation service sets up your German GmbH or UG, including the notary and Handelsregister steps. Commenda’s entity management platform keeps the registered entity in good standing with ongoing filings and deadlines. Commenda’s indirect tax software handles German VAT registration and your monthly, quarterly, and annual returns. Track cross-border deadlines with the compliance calendar, and confirm counterparties with global tax ID verification.

Book a demo for a walkthrough of your German registration path and VAT obligations, mapped to your entity and timeline.