Founding a company in Germany: €9,600, 152 days, still no invoice

Carmine Paolino began setting up his second company in Germany in late January. By late June — 152 days, by his own count — he had spent more than €9,600 and still could not send a single invoice of his own, the one thing a company exists to do.

Billed by everyone else

In a detailed account published on 24 June, Paolino notes that the state, two courts, a notary, a law firm, a tax firm and software vendors all found a way to bill him, on time. His running total: a little over €7,600 in fees and bills, plus €2,000 of share capital frozen in an account he is not allowed to touch. Total gone: €9,654.71. Invoices issued: zero.

The timeline

The first call with a law firm came on 23 January; the mandate was signed on 5 February. The structure — PlentyLabs UG & Co. KG, technically two companies — was settled on 18 February after roughly a month of drafting. Incorporation documents were ready on 6 March and approved on 17 March, followed by a week-long hunt for a notary. The notary read the deeds aloud in Berlin on 24 March for €1,575.24; the €2,000 of share capital went in the next day; on 26 March the register court demanded a €300 advance. The first company was entered in the commercial register on 10 April, the second on 17 April, at a cost of €260.

Tax registration went to the same firm on 20 April, but it took until 6 May for a fresh engagement — proposal, power of attorney, ID checks, per company — quoted at €630. The incorporation legal bill of €4,462.50 arrived on 28 May; the tax questionnaires went in on 29 May; the first accounting-software bill, €426.97, came on 3 June. On 9 June he was told the VAT ID would arrive by post.

Why the invoicing is blocked

Seven weeks after instructing the tax firm and almost four weeks after submitting the questionnaires, the VAT ID has still not arrived. Clients abroad need it for reverse-charge invoicing, which is exactly what he is waiting for. German clients could be billed today, but a domestic invoice would have to be reissued the moment the number arrives, so those are on hold too.

Leaving is not a simple exit either: his first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax on gains he has not even realised.

What the case illustrates

Paolino argues the whole process should have been a web form: fill it in, pay a fee, get the company and the VAT ID within a week. Estonia does it, he notes, and the UK registers a company online in a day, for the price of a dinner. The stated rationale for the checks is trust, he writes, yet the same machine failed to catch Wirecard, a two-billion-euro fraud.

The naming saga fitted the pattern. "Plenty" was rejected as too generic a word, and after weeks of correspondence the name was approved only as "PlentyLabs" — the same word with the space removed.