Ecommerce in Germany: What You Need to Know to Start Your Business
Germany is an attractive country for online business. With a population of more than 80 million people and more than 47 million online shoppers, it’s one of the biggest markets in Europe. However, problems such as difficult language and the well-known German bureaucracy can be a challenge. Thankfully, Germany is very open and helpful to investors.
Germans love paperwork and to have everything well documented. Therefore, to start any business in Germany a series of steps and registration in special Government’s Institutions are needed. The recommendation of the official German channels is firstly to contact the Chamber of Industry and Commerce (Industrie- und Handelskammer). They will guide the investor regarding where to register its business, which documents are necessary and step to be taken.
The common first steps are to choose which structure the company will have- regarding the size and liability of its members, to open a bank account in the country and to have a registration at the Tax Office (Finanzamt). Also, most likely, registration must be done at the Gewerbeamt or the Trade Office . These are the guidelines for any kind of business within Germany (We say most likely because some professions, such as doctors, need some special kind of registration. Moreover, depending on the type of business, the profession involved and if the person wants to live in Germany, special kinds of Visa are necessary. The Foreigners Office must also be contacted in this case.).
The official websites are full of the available information in English for foreign investors. To have a specialist help is also useful to understand all the documents that are needed for the whole procedure. Nonetheless, for online business, there are some instructions that one needs to pay attention to.
Well, there is no specific german law for online business. The applicable legal document is the E-Commerce Directive of the European Union. But some interesting points need special attention to foreign investors to start this kind of business in Germany.
The first recommendation is to have a physical location in Germany. Although it is not mandatory to have a '.de' domain, yet to have a German address is an important step to gain the trust of German customers. Moreover, as it is a common practice to return online purchased items, to have a physical base within the country not only facilitates such process but also makes clients eager to buy online since the returning of goods will be easier.
Another recommendation is to have the website translated to German. English is a well known and spoken language in the European country, but its official language is German. And again, to gain the trust of the German customers, to have a website working in their native language is much better and productive.
Regarding payments, differently, from Americans that use credit cards very often, Germans do not use that much credit cards as a method of payment. Not even online payment methods, such as PayPal, are the most used by Germans. The most used payment method still is an open invoice. The customers like to receive their items, see if they like them (if not, they return it, as mentioned) and then they will pay it.
Therefore, for a successful business to run in Germany it’s also important to offer the customers different options of payment, such as the use of credit cards, direct debit (SEPA-very common and broadly used in the whole European Union and makes it easier also for customers of other countries to shop in other countries’ online shops), electronic payments as Paypal and the open invoice system.
Collaborated with Estela Schmidt, a Brazilian lawyer, with a masters degree in European and Transnational Law of Intellectual Property and Information Technology by the University of Göttingen