But in my eyes the benefit overweights:
- all your business expenses are kept in a professional setting and don't screw with your personal finances
- you will have a separate bank account
- you have a legal entity you can later sell to a real business
- you can use leftover money to (re-)invest into nearby business areas
- you have limited liability (and you can buy proper insurances for your risky business activities!!)
Your local IHK will be happy to guide you through this process.
I also started off as a sole proprietor and moved up the food chain through UG to GmbH(s), and there is so much you will learn during this process. I think every entrepreneur should have experience with local trade laws and taxes, so in my eyes you can't start early enough.
If you have any questions feel free to ping me.
Bank account: Just go to your bank and create business bank account.
Leftover money: It's up to you how much you withdraw, although you must pay tax on all income minus expenses.
Limited liability is not true (see Geschäftsführerhaftung).
Insurance: Again, you can get insurance (IT-Betriebshaftpflicht) as a sole proprietor too.
I think, if your project is merely ramen-profitable, don't bother about all the organizatorial overhead.
Another downside of a UG/GmbH: More paperwork for taxes etc. (double bookkeeping).
I'm a german living in France, the tax situation is already difficult enough, but yeah – I also think it is a good idea to separate any project income and costs from my personal finances
If you do it out of tax reasons and you are willing to take the risk of not being able to do any administrative "things" by going to a local government agency in the town where you live, then form an entity outside of EU for example in singapore.
Again, I'd suggest you start your first steps in business locally where you can talk to actual people. There are a lot of services available that can help you out in person.
My best advice is to walk into the local Finanzamt and speak to someone. I've always found them to be knowledgeable, courteous and genuinely interested in helping. Explain to them your goals (minimising tax liability / indemnity / etc) and they will advise you where they can (for free).
If you ever need a credit or want to sell to businesses, you'll also find out that people don't trust Limiteds. One reason is that traditionally people used them for a fresh start after going bankrupt and being barred from operating a domestic company. It also appears as if ltds attract more than their statistically fair share of douchebags, ruining it for everyone else.
Also, and I know people differ on this, but I kinda think paying taxes isn't the worst thing there is (and is probably a moral obligation). There are also possible downsides from avoiding taxes & social sec contributions, like not having the kind of certificate for your income your next landlord might want, the inability to join public health insurance and the risk of managing all your retirement funds yourself – a friend of mine lost the two million € he had saved in his limited when Royal Bank of Scotland(?) went under.
A separate legal entity (UG / GmbH / Limited / whatever) is mainly useful for three things:
- avoiding personal liability
- shared ownership
- tax optimisation
For a website like this, there is practically no liability to worry about. And if you don't have a partner, you don't need to worry about shared ownership.
For tax purposes, the overhead of a legal entity only pays off if you already have a lot of revenue (in Austria, more than 200k€ per year)
Especially not for avoiding personal liability!
Because as the director of the company (which you are as a solo founder), you ARE still personally liable (GmbH-Geschäftsführer-Haftung).
Get a Gewerbeschein. It's 25€ or so. IHK might want membership fees, but they are really low if you don't have much income.
Go with Kleinunternehmerregelung. It makes many things easier if your revenue is below 17,500€ per year.
Don't forget: The first 8,000€ in income per year are tax-free.
Stripe now has "US incorporation as a service": https://stripe.com/atlas
Can you elaborate a bit? I have the same problem as the original poster. But founding a company requires IHK membership fees and tax consultant fees. From what I hear this amounts to ~ 1500 €/year.