This is true of all contract notarization in Germany (even when buying a house, jesus that is a slog), and although it is a bendy-banana level silly thing that people focus on, isn't actually the biggest problem in company founding here. MUCH more problematic is unfavorable tax rules making equity compensation difficult, capital requirements, legal/notary fees, and an investor class that is notoriously skittish.

If you could solve all those problems and still had to go listen to the Notar recite the contract in a monotone, it would be a worth trade.

This here is the problem for most of EU countries.

We Dutch are proud how easy it is to do business here. Maybe, compared to some other countries. But starting a BV here and 1 month later finding a representative of a trade union (metal sector, which somehow semiconductors fall under together with car garages, petrol stations, steel factories..) and asking me to come to their office in person to explain what we do, and calculate how much their cut will be was weird at first. Of course being extremely busy with actual business, I forgot, and got a letter with an 100k Euros invoice attached. Apparently they assumed 15 employees with 45k gross salary, and thought this is a fair trade union contribution! When I didn't respond to that, while discussing it with our lawyers, they sent a fine over this invoice which made it 140k. This is all within 3-4 months of registering mind you! At the end the lawyers handled that, but yeah, what the hell..

These trade unions are notorious for that. I worked as a labor legal advisor and especially the unions for temporary employment agency start 'barking' and demand loads of money (even from years back). Sometimes it's not even clear which union is applicable.

You probably have all the info right now, but make sure everything is 'in line'. I mean, have your company codes at the tax authority match the applicable union match the actual things that your company does. Depending on the jobs of the employees, it might be smart to split the company into multiple legal entities.

All in all you can be happy that this happened within a couple of months. Finding this out when you're years underway and then having to pay millions... I've seen plenty of these cases.

Want to start a business in The Netherlands? Make sure to do a 'CAO check' first, think about how to structure your company (one entity? multiple entities? what job goes where?), and do these checks again once you pivot or make certain changes to the actual work that your company does.

The rationale for this is also pretty simple: somebody got to pay for all this nice social security. They say it's part of the risk of being an entrepreneur.

Yeah our case was strange because we develop chips and design software related to it. Belastingdienst categorized us wrongly as metalelektro, and we got this guys (Cometec) within two weeks of that. In the meantime we have applied this sector assignment to be corrected, which eventually happened while we were getting threatened into bankruptcy by these guys.

What I don't understand is, we got a lot of help from RVO, Belastingdienst etc before and during incorporation. Nobody talked about this! We got sone numbers from Belastingdienst about social security contributions per sector, but like 15% cut per employee wasn't mentioned once. To this date I don't know what legal basis do they have to ask for this amount of contribution. Nobody mentioned any law, or a decision by ministery of social affairs. Very strange to deal with this, because it's literally someone showing up and asking for money without telling even based on what.. It gave very strong gang vibes, which was surprising for me as I was always a member of a trade union.

Yeah, that stuff can be scary, I understand. It might almost feel extortionate. You had labor lawyers look at the applicable CAO and pension rules?

I quickly checked their website and it's a little unclear (so don't consider this legal advise), but their legal basis is probably the CAO. If that particular CAO has been made mandatory by law (which happens for certain industries that need tighter control from government, like temporary employment agencies), than it automatically applies to companies doing the exact work that's described in the CAO ('werkingssfeer').

It's a shame that RVO and Belastingdienst did not warn you correctly. The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.

Do you happen to be in or around Nijmegen with your chip development?

> The Netherlands does not want entrepreneurs, they want everybody cozy at their jobs at some big company.

Totally agreed. Those big companies in return get a lot of benefits from the government. Most investment in semiconductors for example are going into the already big, and let's be honest, not do competitive companies to keep the alive.

We're in the Randstad. Nijmegen is nice but together with old Philips its semiconductor ecosystem has declined quite a bit.

> finding a representative of a trade union

> how much their cut will be

Did you have any employees yet? I guess so. Isn't it the employees' responsibility pay for their union membership?

> Isn't it the employees' responsibility pay for their union membership?

No, contributions are handled by the employer/company

Individuals pay like 25-30 Euronth contribution, which is tax deductible. Employers can pay a lot, like 10% or more, which is often going to a social security fund.

That's crazy. Notarization in Estonia can be done entirely online using a digital signature, just like everything else here is done (including voting, getting married, getting divorced, filing taxes, opening/closing a company, etc). From all I hear Germany is still stuck in the 90s for some reason.

90s is charitable. Most important thing here is that nothing changes. Everything new is considered suspicious.

More like no one is willing to stick their neck out politically to argue for the positive public policy changes, or challenge regulatory interpretation needed to make real change. Plenty of people see the problems, and even want to fix them, and get stymied by political processes that abhor actually having to argue for change to electorate.

The weird thing is that, at least as an Estonian, I would've never expected this from Germany. Italy, Spain? Sure. Germany? That just feels weird.

Germany never thought it would be in the current situation - decaying health care, pension system, cornerstone industry in decline, lack of digitalization, the list goes on. Massive reforms are needed, action is needed, but there is too much inertia in the system to change anything quickly.

Smaller countries like Estonia have the ability to be much more nimble.

Yes somehow they believed the 90s continue despite zero public investment. They talk about the dangers of debt for future generations, but they are silent about the infrastructure debt they are saddling their children with by not investing on any serious scale.

Fun fact, the Bundestag is one of the most representative parliaments in the world thanks to MMP. Is the executive dysfunctional? Is it the federal split into 16 tiny states causing this?

If it was just a matter of size, similar/larger countries would be in the same state, and at least one of your smaller states would get ahead right?

Germany is incredibly under developed in the digitalization plus the amount of red tape to do even basic things is also very large as well. Getting rid of these things takes a lot of will power and at the moment there is very little.

Just wait until you try to use their trains

I can also listen to a notary online in Austria. I just absolutely do not want to have the notary involved in the first place.

Lots of systems are stuck in very old ways of working and using humans as cogs. My American utility bill has a typo in my name that is not there in the online system through which I opened my account; a human in a back office read text from one app and typed it into another. Maybe there was even a piece of paper involved.

I agree. The notary process is a bit annoying, but it only costs 500-1,000 euros. Yes, that's not ideal, but if you're building a proper business, that shouldn't be an issue. You can typically get an appointment within a week, no matter where you are or where your company is registered. However, once the notary sends your documents off, it can take days or weeks for the registry courts to handle them. You have to register with ten other places yourselves, and there's no guidance. There are different forms and requirements, and the yearly costs just for a basic tax declaration are in the thousands. They can be 5-10% of early startup expenses for no good reason. There are also some shady setups, such as a private company handling the company registry for the state. You have to pay this company each year to publish your books. Accessing that data still costs money, except for the largest companies. It doesn't help with transparency, but it is a public-private rent-seeking nightmare that (possibly) arose due to conflicts of interest among certain politicians (the company's CEO has a higher-level position in political party) and lobbying.

> but it only costs 500-1,000 euros. Yes, that's not ideal, but if you're building a proper business, that shouldn't be an issue.

It is and should be an issue. You shouldn’t be required to put in any money towards a text to speech translator let alone 1000€.

In the UK there's an API https://developer.company-information.service.gov.uk/overvie... and it costs £50. https://www.gov.uk/government/publications/companies-house-f...

Why is Germany ten times less efficient?

Germany really wants you to be a sole trader with unlimited liability, and treats a liability shield as something you shouldn't have.

If only it were that. You have to put up 25000€ in capital and pay absurd amount of fees to the notary for essentially being a text to speech translator.

The minimum capital requirement is the whole point of a GmbH. If you don't want it, you can found a UG, which is the same thing with no capital requirement.

If both are the same what’s the point of having 2?

Trustworthiness. You know a GmbH has at least 25000€ you can sue them for. And a UG has to put parts of their profits into becoming a GmbH, so eventually everyone big enough is a GmbH.

Looks like as per 2022 it is possible to register a GMBH in Germany fully online https://www.brak.de/newsroom/news/gmbh-und-ug-koennen-ab-1-a... also https://www.ihk.de/stuttgart/fuer-unternehmen/recht-und-steu... here are the online notaries: https://online.notar.de/

Firma.de estimates 6 weeks https://www.firma.de/en/company-formation/how-to-set-up-a-gm...

beglaubigt.de estimates 3 weeks https://beglaubigt.de/ug-gruenden

Holvi estimates 4 weeks https://blog.holvi.com/de/gmbh-oder-ug-gr%C3%BCnden-2025-abl...

I founded a UG and a GmbH in 2024. It took me 3 months total including visits to the notary (who charges a non-insignificant sum for their services).

I did this as a subsidiary for a US company and literally had to email and call people every few days to move the process along (mostly, it was the banks who somehow expected us to be a multi-national company and wanted to charge an arm and a leg just to let us open a bank account. Most banks outright refused us).

When the notary finally filed the paperwork to the court, the court replied after a few weeks with additional clarifications for which we had to go AGAIN to the notary to do the whole song and dance of them chanting at us in German at 1000 words per minute.

Everything took painfully long and delayed investment for while. People have absolutely no idea how painful it is to merely have the incorporated entity available. Then, it takes a few weeks to get your tax ID - this is when you can start employing people / accepting payments etc.

The bank issues/refusals may have something to do with FATCA. If you have anything to do with the US in terms of taxes, many EU banks don’t want you as their customer. If it’s a subsidiary of a foreign company, then a lot of paperwork is required to prove that the foreign owners actually exist.

With experience and optimal prerequisites (good connections to a notary, single founder with default bylaws and no asset transfer into the company) you can do it in ~4 days, e.g. for a holding company.

I did it in ~2 weeks last year, where almost a week was caused by the coworking space I rent at not notifying me of the physical mail from the court. If that physical mail would be eliminated from the process you could probably do it in 2 days.

Apart from that, for any non-trivial situation, the majority of the time will be determined by how fast you can proceed through the process of adjusting your bylaws, etc. and evaluating tax situation (so lawyer + tax advisor waiting time).

(after that the process of waiting for a tax ID starts, which depending on where you live can easily be the slowest part and take ~6 weeks on its own.)

> you have to physically go to the notary and have a person READ OUT all the statutes to you.

I guess, you've never bought a house in the Netherlands then, because it's the same exact process

That is beyond hilarious lol. Finally found something the UK does better than the Netherlands ;)

I never understood why people focus on this "reading aloud" so much.

It's not so much about the reading out loud, it's about making sure you understand (so that you cannot later claim "but I didn't know about this, nobody explained it to me properly")

What does reading it aloud make a difference to you reading it yourself? You can still claim that they misspoke or had an accent and you misheard or any of a dozen other excuses.

The whole point of a contract is you sign your name to the words on the paper, and you are attesting that the words therein are correct and what you agree to.

I am living in my second house I bought and they absolutely did not.

They just confirmed I was buying a house for X.

They did not read the whole thing.

A reading is mandatory (art. 43 WNA), but a party may opt for a limited reading if it declares that it has read and understood the content.

So it is not mandatory then, lol.

> Personally I would not create "EU-INC" but just make all local entities legal in every country.

That’s basically already the case. You can incorporate in one member state and offer your services in another member state. That’s part of what the EU assures. Still, there are many reasons why it doesn’t make sense for people to incorporate in any random member state.

I'm surprised that Germany never relaxed the in-person notarization requirements during COVID. A lot of jurisdictions around the world did change their rules to allow remote notarization.

They did. This can be done online since August 2022.

Interesting, thanks! Apparently it requires a German eID-enabled ID card (or compatible EU ID) and doesn't include transactions involving real estate, but still it's progress.

The German eID system had a bad start but it works fine now.

It's the same in the Netherlands.

There is European legislation since 2024 that allows 'digital' notaries (Directive 2019/1151). Not many notaries support it though.

In the Netherlands it's much simpler. The notary only has to identify you for their record keeping, no mandatory reading of things etc.

And once identified for something you can easily authorise the notary to sign other things on your behalf as well.

We did that all the time when for example adding new entities to a group structure. Just e-sign the authorisation and that's all.

Same in the Netherlands for BV's. At least a few years ago, maybe it changed...

All of the heavy BV requirements changed in 2012. You can now start a BV very quickly, if you want you can do it online, and without any minimum capital requirement.

> Personally I would not create "EU-INC" but just make all local entities legal in every country. Then countries could compete to be the best system to attract companies and entrepreneurs.

Like the current downward spiral of US states competing who can have the lowest corporate tax while letting their infrastructure crumble? But hey, that's a long term thing and we don't think about those. Only which companies move to my state in the next year/quarter/month.

In USA, I had to get paperwork notarized to have the local water utility open an account for me.

Not anymore, Germany has a streamlined online notarization process for creating a simple GmbH now.

I've recently managed to get everything done in <1 week, including bank account.

Progress!