Germany is a country with a developed and specific cuisine and also one that has a large number of acclaimed restaurants. Regional cuisine is highly praised in areas like Bavaria or Hamburg but tourists do not have to stray too much from popular cities like Berlin to find numerous options.
Investors who open a restaurant in Germany can choose to serve traditional or region-specific dishes or can opt for international cuisine or one that is influenced and inspired by other countries.
What to consider when opening a restaurant in Germany
The process of opening a restaurant is one that will involve a set of extra steps, compared to opening an office business. these will relate to finding a suitable location to base the restaurant, hiring qualified staff and, most importantly, obtaining the special permits and licenses not only for storing and selling food but also for serving alcoholic beverages.
Below we list some of the top issues to take into consideration before starting a new restaurant in a German city:
- Choose the concept: this is related to the specific cuisine that will be served but also the niche if the restaurant will promote a unique or less explored concept.
- Choose the location: the location of the restaurant will be very important for the success of the business and can also be linked to the chosen niche; another pre-formation decision that will impact the restaurant’s image has to do with the name.
- The business plan: having a good business plan can help entrepreneurs obtain a loan for their business – which may be more than needed in some cases.
- Obtain the permits and licenses: the new restaurant will need to observe the local sanitary and safety regulations and obtain the special permits and licenses from the relevant authorities.
- Hire the staff: a good location and concept will need to be supported by a dedicated and professional team and the restaurant will also rely on the notoriety of its head chef.
- Prepare the menu: the main feature of the restaurant, apart from the location and design, will be the menu and entrepreneurs will need to prepare it with dedication and attention.
- Advertising: this can be an important step and creative entrepreneurs can start an advertising campaign for their new restaurant in advance.
We have gathered the steps for opening a restaurant in Germany in the infographic below:
Our team of agents who specialize in German company formation can help you first open a legal entity and after that handle the subsequent steps, such as renting or buying property, hiring employees and handling all of the matters concerning licensing.
Choosing a business form for a German restaurant
As a foreign investor in a country like Germany, the possibilities and endless and for those who decide to operate in the food and beverages industry, the restaurant is one of the best choices. However, before getting to the practical aspects of setting up this type of business here, one must get acquainted with the legislation governing both companies and food-related activities.
The Restaurant Code is the main law governing the operations of food establishments in Germany.
The Company Law is the main act providing for the types of legal forms under which a restaurant can operate in Germany. Among all entities available, the limited liability company (GmbH) is one of the best structures that be used.
It requires simple registration requirements and a low share capital imposed by the law, and the foreign investor has the possibility of being the sole owner of the business.
There are also other options for setting up a restaurant in Germany, such as the franchise and the joint venture for those who did not have the time to get acquainted to all the legal requirements they must comply with in this sector.
No matter the choice, each type of legal form has its own advantages and the German food and beverages sectoris one of the most prolific in the entire European Union which is makes this country very appealing for foreign entrepreneurs with or without experience in this field.
If you have any questions or need support in opening a company in Germany in the restaurant sector, our local agents are at your service with tailored advice.
The food and beverages industry in Germany
The high number of inhabitants makes Germany the country with the largest food and beverages industry in Europe. The food sector is currently the fourth segment in the economy with a large number of companies operating in the field and with over half a million employees in restaurants or food producing companies. Germany is also a great importer and exporter of foodstuff and beverages. At the moment, Germany offers great potential to foreign investors seeking to open restaurants here, and also to those wanting to start a trading company based on agricultural products.
Investors should know that there are special regulations in place for those who open a company in Germany that activates in the food sector. In most cases, the business will need to obtain a certificate from the Public Health Office and it is submitted upon the registration of the company (conditions apply as per the date on which it was obtained, it must not be more than three months old). We recommend getting in touch with our agents for complete details about this specific certificate. Moreover, further down in this article, our team also lists other special permits that are commonly required when starting a restaurant in Germany.
If you are interested in opening a business in Germany, you can consult with our agents who are experienced in several fields such as law, accounting, and taxation. We can also provide support in company registration, self-employment, and a variety of other matters related to doing business or expanding a company in Germany.
Company formation steps for a restaurant in Germany
The first step for investors who wish to start a restaurant is to open a company in Germany. The following steps are required in order to register the business:
Choose the name: the founder must select the business name and file filing for its approval.
Prepare the documents: write the company's Memorandum and Articles of Association, these will include the relevant information about the business.
Set up the bank account: each company has a corporate bank account where the minimum share capital is deposited.
File for registration: filing the incorporation documents with the German Companies Registration Office in order to formally register the business.
Register for tax purposes: the company is registered with the tax office and subsequently for VAT purposes.
Employment: the company will also be registered with the Labor Office as hiring employees will be a subsequent step.
Others: registration with the Chamber of Commerce and Industry, as this is a required step for companies in Germany (with some exceptions).
When opening a restaurant investors will also be required to think about a suitable business form. The steps above describe the formation of a corporation, a legal entity that is separate from its founders and that can enter into agreements in its own name. This can be the limited liability company (GmbH), the limited liability entrepreneurial company (mini GmbH), or the stock corporation. The partnership limited by shares is also included in the corporations' category because it combines a stock corporation (AG) and a limited partnership.
One of our agents who specialize in German company formation can provide investors with detailed information about all of these business forms. The type of company usually selected by investors who open a restaurant is the GmbH. This is the German equivalent of the private limited liability company and it allows the founders to limit their liability up to the amount of invested capital. The minimum share capital for this business form is 25,000 euros and it can also include contributions that are made in-kind. Upon incorporation, half of this capital (12,500 euros) must be deposited into a bank account or verified if it is made in-kind. The mini-GmbH is not a separate type of legal entity per se, but a type of GmbH that has a lower minimum capital. It can be a preferred business form because in this case the company can be incorporated with only 1 euro. However, the company is required to retain a quarter of the annual profit until it reaches the initial amount of 25,000 euros for the capital. The establishment costs for the mini variant of the GmbH are also reduced, at approximately 300 euros (because of the lower costs for notarized documents).
The set-up process is the one summarized in the seven steps described above, starting with choosing an original business name.
Companies in Germany are subject to corporate income tax (that also includes the solidarity surcharge), trade tax, value-added tax, social security contributions as well as others.
Once these steps are finalized, the company must apply for the relevant business licenses covering the operations of a restaurant.
Special licenses for restaurants in Germany
When setting up a restaurant in Germany, the owner must take into account the legislation related to:
- importing food and beverages;
- the laws on selling alcohol on the premises;
- the food labeling laws;
- the legislation related to animal products;
- the legislation on frozen foodstuff;
- the legislation on health certificates for foodstuff.
Additionally, the owner must make sure the building in which the business will carry out its activities is suitable for this type of activity and hiring specialized personnel is necessary.
Investing in Germany
Starting a restaurant in Germany can be a suitable business idea, particularly if the founder/s have the required capital for company formation in Germany as well as the needed amounts for purchasing a property, décor, and equipment as well as marketing.
Entrepreneurs who are not EU citizens will require a residence permit in order to set up the business. If the interested individual is not yet in the country, then he will need to apply for the permit (residence permit for self-employment or a residence permit for investment) with the German Embassy or Consulate in his country of origin. This is a process that can take more than two months in some cases as the German Embassy/Consulate in the country in which the application is made forwards it to Germany for evaluation. This time period should be taken into consideration when establishing the business plan. Investors who cannot be present in the country during the entire time they need to open a company in Germany can reach out to our agents. Through a power of attorney, our specialists will be able to make some of the submissions in your name.
The restaurant license in Germany
Under the legislation related to the operation of food establishments, a company is deemed as a restaurant if it serves food and beverages for consumption on the premises regularly. Also, food businesses that prepare food on location are also considered restaurants and need to obtain a license in this sense.
Companies serving non-alcoholic drinks and free food samples do not require such a license. However, no matter the situation under which a business serves alcoholic beverages, the German restaurant license is required.
The following types of food businesses are recognized as restaurants in Germany and require a license for their activities:
- the public house,
- the takeaway food establishment,
- the bar and the club or discotheque,
- the food truck.
Apart from the food truck, all other premises also require a planning permission which must comply with specific requirements.
Other aspects that need to be considered when opening a restaurant in Germany is that the license is also issued in accordance with the type of entity used. In the case of partnerships (general or limited), each member is considered a businessperson in the restaurant, while in the case of companies, the entity itself is considered when issuing the license.
Our German company formation officers can offer more information on the licensing requirements applicable to local restaurants.
Documents required to obtain a restaurant license in Germany
There are various documents that need to be filed with the Service Portal or with the Federal Office of Justice in Germany in order toobtain a restaurant license. These are:
- a good standing certificate for the person applying for the license,
- an extract from the German Trade Register with respect to the company applying for the license,
- a statement from the Trade Register when the restaurant is operated by a sole trader (it is often the case of food trucks).
Apart from these, the person applying for license, as well as the personnel in charge of preparing the food must also make proof of a restaurant trade training course, in accordance with the provisions of the Restaurant Code. In their case, the certificate of passing the exam is required alongside their IDs or passports and German residence permits (in the case of foreign citizens).
A floor plan of the restaurant must also be submitted for approval when applying for the license. The application fees must also be considered when applying for such a permit.
The average time in which the license is issued ranges between 3 and 5 weeks provided that all documents are correct.
If you need assistance in preparing the application file for a license when opening a restaurant in Germany, you can rely on our company registration specialists. We also invite you to watch our video:
The restaurant sector in Germany
Restaurants in Germany benefit from a growing demand for healthy food, recipes that use fresh and natural products and a reinterpretation of traditional cuisine. Full-service restaurants in Germany record good performances in terms of value growth. The number of restaurants was estimated as follows:
- in 2017 there were 71,787 registered restaurants in the country;
- the number of restaurants in 2016 was 72,481;
- there were 73,366 VAT registered restaurants in Germany in 2015.
Marco Rössel is a Partner at Liesegang & Partner and an experienced Attorney at Law. He is specialized in commercial and corporate law and can help you open your company in Germany as fast as possible.
Call us now at +49 69 71 67 2 67 0to set up an appointment with our company formation experts in Germany. Alternatively you can incorporate your company without traveling to Germany.
As our client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Germany.