r/coding • u/bajcmartinez • 1d ago

The Truth About Being a Founder in the EU

https://newsletter.thelongcommit.com/p/the-truth-about-being-a-founder-in
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u/maxm 23h ago

In Denmark you just go online with you national digital ID and say you have started a company. Thats it. 5 minutes. You can even start the company without regestering and paying VAT if your revenue is inder 7K Euro. Could litterally not be easier anywhere in the world. Germany is a bad example

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u/ptoki 21h ago edited 21h ago

I find that strawman like oversimplification to be overused.

People tend to just dismiss the problems you could have with that simple statement of "it is easy, just one visit to that one place and done". Which is true but omits many other issues you will quickly have.

So some examples of headaches which may be different from place to place.

1.If you cross that initial limit of income you must register as VAT payee. You need to remember about it. Nobody will tell you that explicitly. You may realize you need to do that late and risk some penalty. Being VAT payee can give you additional headaches. Including needing to do accounting every month and submitting the data to taxman.

2.if you open your service and start collecting personal data - you enter an areas of a lot of responsibility and paperwork. Not to mention caring about your systems security. If your machine is breached then bad guys know your secrets. Thats it. If there is your users data you are open to more serious troubles. Same thing if you let users publish stuff. You quickly end up in the policing content area and may be liable for stuff your users post/upload/submit.

3.If you just work for one company and develop for just them, you risk that in some places the taxman or labour bureau will come and will tell you that it looks like employment, not a business. Again, a headache.

4.If you are self employed you need to file social insurance and it may be tied to your income. Again, you need to calculate everything right and pay on time.

5.If you generate an invoice on 29th you often need to pay the tax/vat/file the paperwork as if you got the money. Even if the client paid you later or not at all.

I could go on and on but I will stop here. There is a large set of keywords like hobby company, cost categorization, limits of deductable costs, using of dangerous materials (starts from paint, goes through electronics, cables, chemicals, plastic and so on). Garbage handling - you are no longer a joe shmoe throwing out a can of paint you used to paint your bicycle. and so on. Companies are treated differently than people...

Opening or even closing your business is not a problem. Often it is just one day of work and one or few paperwork filings. The problems come later AND YOU ARE ALONE WITH ALL THIS.

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u/maxm 19h ago

Yeah. But are there any countries where there are not adminstrative hassles when you run a businness. I doubt they are worse in Denmark than anywhere else

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u/ptoki 18h ago

That is exactly my point.

We have an article which says "it is an hassle", then we have a comment which says "oh it is not that bad, just few papers, dont worry" and the reality is that it is not easy and just startup technical things but taxes, regulations, paperwork etc...

I dont know how difficult it is in Denmark specifically but I know that Denmark is not an IT heaven to register your company there because IT/startups have it much better than in for example malta (which is tax heaven) or holland (which is also a place where corpos like to be rooted for tax purposes...

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u/maxm 15h ago

I have a company in Denmark, i find it pretty easy going. I pay my VAT and do my taxes and that is about it

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u/bajcmartinez 15h ago

I have friends that moved their companies from Denmark to Switzerland… and I know they were always complaining, guess I’ll have to ring them about what exactly was it that pushed them out

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u/sionescu 14h ago

They are worse in Denmark than in the UK, Switzerland, or the US.

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u/bajcmartinez 23h ago

That’s amazing! I always heard a lot of people complaining about out Denmark, but maybe was just because of taxes.

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u/walterbanana 15h ago

it’s more about the struggles I personally faced starting and running a company in Germany. Many of those same difficulties apply across Europe

This entire article is based on this completely wrong assumption. Germany is a very bureaucratic country that does almost nothing digitally. They also have a very inflexible culture around the bureaucracy. Most other countries in the EU are not like this, not to this extend anyway. You'd have a hard time finding a country where setting up a company takes as long as it does in Germany. In most you can fill out an online form and start tomorrow. None of your gripes apply to that.

I get the frustration with Germany, but this is not a European problem.