Before you take your first job, you need to properly register your business. Here are the necessary steps.
1.1 Choosing a legal form
Germany offers several legal forms (Einzelunternehmen, GbR, GmbH, UG). Most craftsmen choose one of two:
- ●Einzelunternehmen (sole proprietorship) — the most common choice. No minimum capital, simple registration (only Gewerbeanmeldung), accounting via EÜR (simplified income/expense method). Taxes: income tax + trade tax. Full personal liability with private assets.
- ●GbR (civil law partnership) — for 2+ persons running a craft together. No minimum capital, full personal liability of all partners. Simple form, no notary, also uses EÜR.
There are also corporations (GmbH, UG) with limited liability, but they require double-entry bookkeeping, a notary, and higher operating costs.
BauFin supports all common legal forms in construction — Einzelunternehmer, GbR, GmbH and UG. For Einzelunternehmer and GbR, BauFin provides EÜR (simplified accounting) by default. For GmbH/UG with double-entry bookkeeping, BauFin serves as a central system for orders, payroll and dunning, with DATEV export to the tax advisor.
1.2 Business registration (Gewerbeanmeldung)
Anyone starting a business in Germany must register it at the local trade office (Gewerbeamt) — mandatory under §14 GewO (Trade Regulation Act).
What you need: • ID card or passport (EU citizens: no additional permits required) • Gewerbeanmeldung form (GewA 1) • Entry in the Handwerksrolle (if your craft requires a Meister — see below) • Fee: €20-60 depending on municipality
After registration, the Gewerbeamt automatically notifies: • Tax office (Finanzamt) — you will receive a tax questionnaire • Chamber of Commerce (IHK) or Chamber of Crafts (Handwerkskammer) • Accident insurance (Berufsgenossenschaft) • Statistical office
IMPORTANT: You must register BEFORE starting work. Operating an unregistered business is an administrative offense.
1.3 Chamber of Crafts (Handwerkskammer)
Crafts in Germany are regulated by the Handwerksordnung (HwO). Key distinction:
- ●Annex A — licensed crafts requiring Meisterbrief (53 professions). Construction examples: Bricklayers (No. 1), Carpenters (No. 3), Roofers (No. 4), Painters (No. 10), Plumbers (No. 24), Electricians (No. 25), Tilers (No. 42).
- ●Annex B1 — license-free crafts (no Meister required). Examples: Floor layers, Asphalters, Grouters.
- ●Annex B2 — craft-like trades. No Meister required.
If your craft is in Annex A — you need a Meisterbrief OR must employ a Meister as technical manager. Alternative: Ausnahmebewilligung (§8 HwO) — exemption from Meister requirement if you demonstrate equivalent qualifications (e.g. 6+ years of experience).
EU citizens: recognition of foreign qualifications is possible under Directive 2005/36/EC.
1.4 Tax Office — Steuernummer & VAT ID
After Gewerbeanmeldung, the tax office will send you the Fragebogen zur steuerlichen Erfassung (tax registration questionnaire). It must be completed within one month.
Key numbers:
- ●Steuernummer (tax number) — assigned by your local tax office. Format: XXX/XXX/XXXXX. Required on invoices (§14 UStG), tax returns, and correspondence with the tax office.
- ●USt-IdNr (VAT identification number) — format: DE123456789. Needed for intra-EU transactions (with companies from other EU countries). Not mandatory for domestic-only business, but recommended.
- ●Identifikationsnummer (IdNr) — personal 11-digit tax number assigned to every person registered in Germany. Do not confuse with Steuernummer.
The questionnaire asks about: • Estimated revenue and profit in the first year • Whether you want to use the small business exemption (§19 UStG) • Bank details • Form of taxation
1.5 Business account & insurance
Business account: • Sole proprietors — legally not required to have a separate business account, BUT strongly recommended. Mixing private and business finances is a nightmare during a tax audit. • GmbH/UG — separate business account is MANDATORY. • Cost: €0-15/month (many banks offer free business accounts).
Mandatory insurance: • Health insurance (Krankenversicherung) — MANDATORY for everyone in Germany. Self-employed: private (PKV) or voluntary statutory (GKV). Cost: €200-800/month depending on income and plan. • Accident insurance (BG Bau) — statutory accident insurance, MANDATORY for construction companies. Must register within one week of starting operations. • Business liability insurance (Betriebshaftpflicht) — not legally required but ESSENTIAL in practice. Without it, you won't get onto most construction sites. Protects against damage claims.
Additional (recommended): • Pension insurance — mandatory for Annex A craftsmen for the first 18 years (§2 No. 8 SGB VI) • Legal protection insurance • Disability insurance
How BauFin helps
BauFin stores all company data centrally — tax number, VAT ID, chamber number, bank details. Set up once, used everywhere — on invoices, quotes, and tax returns.
