Germany tests digital start-ups: "Schneller Gründen" project launches pilot phase

Until now, anyone wanting to set up a company in Germany has often had to struggle through numerous forms, administrative procedures and waiting times. This is set to change. With the Schneller Gründen project, the Federal Ministry for Digital and State Modernization (BMDS) is now launching the pilot phase for a fully digital company foundation.

At eight locations, trade offices, tax offices and registry courts are testing a seamless start-up process for the first time.

Eight pilot regions start the practical test

The so-called combined application for company formation is initially being tested in the following regions:

• Aachen
• Dresden
• Düsseldorf
• Fulda
• Goslar
• Mannheim
• Munich
• North Frisia

The aim is to test the process under real conditions with real users and real authority data and then roll it out nationwide.

Putting an end to the bureaucratic marathon

Despite rising start-up figures, Germany is still considered a bureaucratically demanding location for business start-ups. Up to now, founders have had to contact numerous authorities and often submit the same information several times.

Schneller Gründen aims to significantly reduce this effort. The aim is to enable companies to be founded digitally, which will be much quicker and easier nationwide in future.

The five building blocks of the reform

Five central measures are at the heart of the project:

One-stop store for founders

In future, all relevant steps should be handled via a central digital platform, from registration to tax formalities.

Faster allocation of the tax number

Digital processes should significantly reduce processing times. In standard cases, numbers could be issued automatically within a few minutes in future.

Fully digital business registration

It should be possible to register a business without paper forms and media disruptions.

Automatic data exchange between authorities

Authorities are to exchange data automatically via the so-called Once-Only-Technical-System (NOOTS). This will make multiple entries superfluous.

Modernization of the commercial register

Optimized procedures should speed up register entries and increase transparency.

Part of the modernization agenda of the federal and state governments

The project is one of the central leverage projects of the "Federal and Federal Government" modernization agenda. In addition to the Federal Ministry for Digital and State Modernization, the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of Finance, the Federal Ministry of Justice and Consumer Protection as well as the federal states and local authorities are also involved.

The pilot phase should now show how quickly digital start-ups can be implemented in practice.

There is magic in every beginning

The initiative comes at a time when Germany has recently seen a record number of new start-ups. At the same time, bureaucracy continues to be one of the biggest criticisms of many founders.

From our own experience, founding a company has always been a time-consuming and bureaucratic hurdle, but figuratively speaking it is only the first of a whole marathon. The everyday bureaucracy of entrepreneurship is what eats away at creativity, productivity, growth and the prosperity of us all. Until now, founding a company was just the entry ticket, which you could skip quite elegantly with legal advice, a notary and a tax consultant. How is someone who has not yet been able to successfully complete the start-up phase in Germany supposed to survive the bureaucracy that still lies ahead? If you make it easier to set up a company first, there is a risk that many more founders will be unhappy in the long run. Just the delay of two years until the first balance sheet and then the corresponding additional and advance payments. Social security funds that are only too happy to suddenly reject founders after a long time. And then you unexpectedly have to pay several years of health insurance contributions and pension fund contributions retroactively. Invoices that are sent to you with a cryptic number in the subject line, but the company concerned is not mentioned at all until you open the attachment...

And yet a start has been made and it feels like a small departure. We should be grateful to the Federal Ministry for Digital and State Modernization (BMDS) for this small glimmer of hope alone.