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Dear reader, in this publication, we will discuss what to consider when choosing, selecting, buying, and registering a (registration) business, commercial or residential income-generating real estate in Germany and Austria. After reading this article, you will have an idea of what suits you best, and whether these countries are suitable for you, find out what kind of credit you can obtain for buying a business and how to do it better, we will discuss the real annual profitability of certain types of businesses in Austria and Germany, and highlight aspects of starting a business and its registration.

Typically, our clients come from: Ukraine, Russia, Kazakhstan, Moldova, Armenia, Belarus, and other CIS countries, but we also frequently receive inquiries from representatives of the USA, Canada, UAE, and EU countries.

Starting a business in Germany or Austria: where to start and what to do

If you are interested in starting a business in EU countries, namely Germany or Austria, the first thing you need to do is choose the type of activity your company will engage in. Often our clients know what they want to do, but many entrepreneurs from CIS countries have no idea how the European system works, what is needed for opening a bank account, company registration, and its servicing.
Firstly – choose what you want to do. If you have no understanding or vision, you might consider ready-made solutions available for sale on our website or consider investments that will generate income without your involvement, such as biogas plants, which are managed by the company while the investor receives profits and can focus on other activities.

Secondly – develop a comprehensive business plan, which our company can create and guide you through all stages of launching and running your business. If you already have a business plan, it’s important to conduct an economic analysis of its effectiveness before starting its implementation.

Thirdly – register a company in Germany or Austria. This is a crucial step where it’s important to choose a reliable partner who can not only register the company but also open an account, properly service it, and support your company’s business activities. Typically, a common and suitable form for setting up a company in Germany or Austria is GmbH, which is similar to a limited liability company. If you plan to work with shares, it is better to establish an AG (similar to a joint-stock company).

Fourthly – open a bank account in Austria or Germany for your company. If everything is well prepared, opening a bank account should not be a significant challenge, and this is another important factor in choosing a partner. Clients often opt for cheaper partners for company servicing, who might face difficulties in opening the account due to basic violations that could have been fixed initially. Choosing an experienced and quality partner from the start can save you from potential higher costs associated with resolving these issues later on. For instance, to open an account, you might need to transfer the company’s servicing to a different partner, but the payment for the first year or half-year might have already been made to the previous agent, who might refuse to refund the money.

Fifthly – finalize contracts, hire staff, set up production, launch and streamline your business, and start making a profit. It sounds appealing, but we all understand that it’s not always as straightforward as it may seem.

These are the main steps to take to start a business in Germany or Austria, with the most routine one being opening a bank account, not considering the business plan development.

Registering a business in Austria or Germany: Is it necessary to have a local partner or director?

Clients often ask:

• Can I own my company if I am not a resident of Germany, for example?
• Do I need to hire a local director to manage my company?
• Can I manage my company from outside Germany, etc.?

With the correct approach, it is possible to do all this without violating the law. You can own a company without being a resident of the country, you can be its director and conduct business on behalf of your company, including issuing powers of attorney if necessary – notarized to trusted persons who will carry out the director’s instructions if they are absent from the country. If the director intends to stay in the country for an extended period, they should obtain a visa or, better yet, a residence permit in Austria or Germany, though it can also be done in another EU country. Whether this is worthwhile is up to you to decide.

So, dear reader, if you are interested in purchasing: a commercial or office center in Austria and/or Germany… we use “and/or” because our clients often want to acquire several commercial real estate properties and are ready to buy them immediately in both countries due to their stable economies and rising real estate prices… If you want to buy commercial real estate in Germany or Austria, whether it’s an office or shopping center, a hotel with a restaurant and bowling alley, a large hotel with two restaurants and its own food production, an income property in Frankfurt am Main or Vienna, a store in Germany or a café in Austria, bakeries, dry cleaners, restaurants, factories, or alternative energy facilities, there are several key factors to consider, and some may need to be addressed depending on the specific case.

Buying a ready-made business in Germany and Austria: key points

1. The amount of cash available to the buyer. This factor is very important because if you want financing, it is not as simple as it may seem at first glance. We will discuss this in more detail later. If the future investor/buyer does not have sufficient funds to purchase a business or commercial real estate and does not have a successful and legal business in Germany or Austria, a good credit history, it is unlikely they will get a good credit, as banks will be skeptical of such a client.
2. If the situation is as described in point 1, you should consider business offers where the seller is willing to provide financing for the object they are selling. We have such properties; moreover, some business sellers are willing to work as managers or directors for several years after the sale to pass on their experience and business contacts.
3. What kind of credit can you get if you buy a business with commercial real estate that the bank can take as collateral? The answer is quite favorable. If we’re talking about millions, tens, and hundreds of thousands of euros, banks would be interested in offering such credit at a good annual percentage rate and for many years. Typically, such credits are provided in the range of 40% to 75% of the value of commercial real estate: a commercial or office center, hotel, supermarket, income property, etc., but sometimes more.
4. When might it be more than 70%-75%? When the buyer already has an active business in these countries, is trusted by banks, has no issues with the government, has previously used smaller credits, and has a good credit history. In such cases, it is possible to receive up to 80% or more of the commercial real estate value. This was easier in the past, but now banks have tightened credit regulations and are reluctant to provide loans even to those with a successful business in another country.
5. Note that the financial resources you plan to spend on buying a business in Austria or Germany must be in your company’s or your personal account, preferably in EU countries. The origin of such funds must be impeccable, as banks will thoroughly check this during the purchase.
6. The possibility of auditing the business. It is important to understand whether the current owner can provide financial reports for the object for the past years of its operation. This is particularly relevant for large objects, not for small businesses like cafés and bakeries, starting at €65,000, where accounting is similar to that in CIS countries.
7. It’s worth noting that real estate in Germany and Austria located away from major cities also has good profitability, generally higher than in large cities, but land prices grow more slowly there. If you don’t have a property in a large city, you can consider buying in smaller towns where you can earn more on annual profitability, even though land prices rise more slowly. In the end, it balances out.
8. Consider, if it’s relevant for you, the possibility of obtaining a residence permit, possibly permanent, when purchasing a business. Not all types of businesses and investments guarantee obtaining a residence permit in Germany or Austria. For example, buying one or several apartments and renting them out may not guarantee a residence permit if they are registered to you as an individual. We recommend registering them under your company, generating profit, paying taxes, and obtaining a residence permit.

In summary, these are the main points for a standard business purchase in Germany or Austria. Of course, there are nuances and various circumstances that require specific solutions, but these are individual cases. We are always ready to assist and advise on how to proceed in any situation, supporting the entire process from start to finish.

In conclusion

In essence, we have covered and described all the main aspects of buying a ready-made business in Austria and Germany and answered frequently asked questions that arise when an entrepreneur wants to start and develop such a business “from scratch.”
Please contact our company, and we will be happy to answer your questions, support your affairs in Germany and Austria at the highest level, as our partners have over 20 to 30 years of experience in their field.

INVESTMAKLER

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Germany: 50 Mainzer Landstrasse, Frankfurt am Main
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