At the beginning of any business foundation, there are often formation costs and investments so that the company can start regular business operations. Ideally, founders should consider these costs early enough as they need to cover up for them with any financing activities they undertake. Generally formation costs can be divided into:

1. Administrative Costs (legal fees, filing fees for patents, business registration, consulting fees, etc.)
2. Product Costs (Product development and design, material costs, etc.)
3. Marketing Costs (Homepage, design (logo, business documents etc.), business cards, flyers etc.)
4. Office Costs (Office equipment, telephone, etc.)
5. Business Costs (Real estate, furnishings (e.g. of the store), vehicles, material (if necessary stocks) etc.)
6. Brokerage costs (Immobilienmakler und Personalvermittlung)

❗Remember that these categories portray a good starting point of all the things one should think about, but it is still necessary to analyze your own business case carefully as it will most likely come with its own individual peculiarities ❗

While most founders think about product and marketing costs, the category of administrative costs often gets neglected. Administrative costs can differ and are dependent on the legal form you choose. They include:

• Gewerbeanmeldung (trade registration): This costs between 15 and 70€, depending on the state.
• Commercial register entry: As already mentioned, the entry isn’t necessary for every legal form. The amount of the fee depends, among other things, on the value of the company.
• Lawyer and notary fees: These are not always necessary, but for some legal forms it is highly recommended or are even mandatory.
• Tax advisor: Most companies pay mainly for the annual accounts and the regular calculation of input tax.
• Registration of trademarks and/or patents: Depending on what you want to protect, the costs can be very high!
• Founding consultation: optional

Keeping this costs in mind is thus also important when searching for the right legal form as they can range from around 70€ for sole proprietors to above 1.000€ for the foundation of a GmbH. It’s also important to keep in mind that, in addition to the actual formation costs, some legal forms require a share capital.

Always include formation costs in your financial planning and check whether you can afford the foundation in the manner you have planned to.