Dropshipping in Germany: Do I need a business registration as a dropshipper?

Introduction

Dropshipping is an emerging business model that is becoming increasingly popular in Germany. The ability to sell a broad portfolio of products without the need for a physical warehouse is particularly attractive. But before you set out as a dropshipper in Germany, there are some important aspects to consider, especially in terms of business registration and choosing the right legal form.

Business registration: A must for dropshippers

Regardless of whether you operate as a sole proprietor or in another legal form, it is generally necessary to register a trade in Germany if you want to operate a dropshipping business. This registration is a legal obligation and serves to make the economic activity official to the authorities. Without a business registration, your activity may be considered moonlighting or illegal business activity, which may result in penalties.

Legal forms for dropshipping businesses in Germany

1. sole proprietorship: This is the simplest form of business registration and requires no minimum capital investment. As a sole proprietor, however, you have unlimited liability with your private assets.

2. limited liability company (GmbH): a GmbH requires a minimum share capital of 25,000 euros. It offers the advantage that liability is limited to the company’s assets.

3. entrepreneurial company (haftungsbeschränkt) or UG: This is a variant of the GmbH, which can be founded with a lower starting capital (from 1 euro). However, it is obliged to set aside part of its profit until it reaches the share capital of a limited liability company.

Dropshipping as a small business

An exception to the rule that a business must be registered applies to so-called “small entrepreneurs”. This status can be claimed if your annual turnover is not expected to exceed 22,000 euros in the first year and 50,000 euros in the second year. However, even as a small business owner, you must register a business, but are exempt from sales tax under certain conditions.

Conclusion

If you decide to start a dropshipping business in Germany, it is essential to familiarize yourself with the legal requirements and the different types of trades. Regardless of the legal form chosen, the dropshipping business must be registered with the Trade Licensing Office.

If you have questions about business registration and the legal form of your business, it is advisable to consult a tax advisor or lawyer. With proper planning and preparation, dropshipping can be a lucrative business opportunity.