Berlin, the lively capital of Germany, has long been known for its entrepreneurial spirit and innovation. The city is full of international diversity and open-minded individuals, which further drives the city’s creativity. Its affordability compared to other European cities have made it a magnet for startup founders ready to make their mark.
If you are one of these entrepreneurs, you may be wondering how you would go about launching a startup in Berlin. Taking into account industries with high-growth potential, access to funding and visa requirements, here is all you need to know.
Why Start A Business In Berlin?
Berlin’s economy has undergone extensive growth in the last decade or so. As a result, the city is now ranked as one of Europe’s top startup cities.
Let’s take a look at some of the reasons why this city is so attractive for new ventures:
Top-tier talent: Berlin is home to educational institutions like the Technical University of Berlin, Free University of Berlin and Humboldt University. These universities are producing a constant stream of talented, driven graduates including international students.
Prime location: The city is easily accessible to other European nations which makes trading for startups much easier within the European Union.
It’s affordable: It is cheaper to work and live in Berlin than some of the other European cities.
Government support: Both the Berlin Senate and German government offer funding and tax incentives for new startups.
Which Industries Have High-Growth Potential?
Some sectors in Berlin have seen successful growth in recent years, making them first-choice industries for new ventures.
Tech and software development: The tech industry is absolutely booming with companies like Celonis and Zalando reaching unicorn status. The city is a recognised location for cybersecurity, SaaS, AI and blockchain startups.
Healthtech: The universities and hospitals work closely with health and biotech startups especially focusing on areas like telemedicine.
Fintech: Berlin is home to some major fintech companies such as N26 and Trade Republic, offering a range of opportunities in this space.
Creative industries: The city has a vibrant arts scene and support creativity, whether it be through gaming, fashion or media.
Accelerators And Incubators For Startups
Accelerator and incubator programs are a great way for new startups to work with mentors to refine their ideas and access much-needed funding. Here are some of the top ones available in Berlin:
Berlin Startup Stipendium: This year-long program is backed by the Berlin Senate and the EU and offers guidance in addition to office space.
Techstars Berlin: This is one of the top global accelerator programs that provides access to an extensive investor network.
Startupbootcamp: Specialising in industry-specific programs like transport and fintech, this program offers intense acceleration in these sectors.
APX by Axel Springer and Porsche: This early-stage investor supports startups with pre-seed funding and mentorship in addition to office space.
Funding Opportunities In Berlin
Securing funding is a critical component of a startup’s success. New ventures have a variety of options to choose from whether it be through government grants or venture capital.
Private investors or venture capitalists: There is a plethora of angel investors and venture capital firms in Berlin, including Project A Ventures, Earlybird Venture Capital, Rocket Internet and Point Nine Capital.
Public grants or loans: The EXIST Business Startup Grant financially supports student graduates who are starting knowledge-based ventures. For tech-specific startups, they can apply for funding through the High-Tech Gründerfonds which is a public-private venture capital fund. Private investors who wish to invest in German startups are able to receive subsidiaries through INVEST Grant for Venture Capital.
Visa Requirements For Foreign Entrepreneurs
Citizens who are part of the European Union (EU) are able to enter the city and start a business with ease. For non-EU citizens, these are the visa options available to choose from:
Freelance Visa: To apply for this, solo entrepreneurs or freelancers will need a strong business plan in addition to letters of intent from clients as well as proof of sufficient financial resources.
Self-Employment Visa: This is ideal for startups who want to register as a limited liability company. A business plan, financing or capital investment, proof of accommodation and health insurance are all required for this visa.
How To Set Up A Business In Berlin
The process of starting a business in Berlin can be fairly straightforward. The key is to be well prepared in advance to avoid any administrative hurdles. Here is a step-by-step guide on how to launch your startup in the city.
Select A Legal Structure
There are three common types of business structures that you can choose for your startup:
Gesellschaft mit beschränkter Haftung: This is a limited liability company and will require €25,000 in share capital.
Unternehmergesellschaft: A smaller version of the limited liability company, you can pay as little as €1 in capital.
Gesellschaft bürgerlichen Rechts: This is a partnership suited to freelancers or smaller companies.
Register The Business
Businesses can be registered with the Commercial Register. Every business is also required to register at the local trade office, this process is called Gewerbeanmeldung. You can then apply for your tax number and VAT ID at the tax office which is known as Finanzamt.
Open A Business Bank Account
To manage your startup’s finances, you can open up a corporate bank account with popular banks like Deutsche Bank or N26. Penta is an online option that is very startup-friendly.
Should You Start A Business In Berlin?
The German capital is certainly a combination of innovation, creativity and hard work. It’s no surprise that more startup founders are putting down their roots in the city due to the extent of startup support and funding.
Whether you plan to innovate in artificial intelligence, open up a creative agency or tackle finance, Berlin is full of opportunities waiting to be found.
Viel Glück!
