step by step guide how to start a small business in Berlin
If you're interested in turning your woodworking hobby into a side hustle in Germany, it's important to understand the legal requirements for starting a Kleingewerbe. While the process is relatively simple, there are a few key steps you need to take to ensure that your business is legal and compliant with German regulations. In this article, we'll share some legal tips for starting a woodworking Kleingewerbe in Germany, including registering your business, obtaining necessary permits, and paying taxes. With the right legal groundwork in place, you can turn your woodworking skills into a profitable side hustle in no time.
Register your business: You need to register your business with the local trade office (Gewerbeamt) or the municipality in which you plan to operate. You'll need to provide some basic information about your business, such as its name and address. You can registrate your business online here. If you are starting your woodworking business as a side hustle, then don`t forget to add it to the formular.
Obtain a tax ID number: You'll need to obtain a tax ID number (Steuernummer) from the tax office (Finanzamt) in your area. You'll need this number to file your taxes and to issue invoices. If you sign up your business using the online service, you will be contacted automatically by Finanzamt. Anyway, if it is not happening during four weeks, you should reach out to your local Finanzamt.
Register for VAT: If you expect to earn more than 22,000 euros per year from your Kleingewerbe, you'll need to register for VAT (Umsatzsteuer) with the tax office. If you earn less than this amount, you can opt for a small business regulation (Kleinunternehmerregelung) and avoid charging VAT.
Open a business bank account: It's a good idea to open a separate bank account for your business to keep your personal and business finances separate. Kontist integrates with Lexoffice, and it makes your Tax declaration so much easier. As a small business owner, you can fill the EÜR form, and this will be generated automatically by Lexoffice using the data from Kontist (this is an affiliate link, which means if you decide to choose, it will pay a small comission to Berlin Wood Sisters with no extra costs for you).
Obtain any necessary licenses or permits: if you want to start producing and selling furniture in Germany, then it is nesseccary to have a Meisterbrief. However, there is a list of wooden products and services you are allowed to provide or sell without the Meisterbrief. To make sure, you are doing everything legally correct, contact IHK, and ask for a consultation. You will be signed up automatically to IHK while you registrate your business.
Keep accurate records: It's important to keep accurate records of all your income and expenses for tax purposes. You may want to consider using accounting software or hiring an accountant to help you with this.
Starting a Kleingewerbe can be a great way to earn extra income on the side, but it's important to make sure you're following all the legal requirements. Be sure to do your research and seek professional advice if you have any questions or concerns.
