Budgeting
A budgeting guide for US consumer brands: entity setup, people, tax, packaging and fulfilment. Use the reference figures below as anchors, then replace them with quotes for your own setup.
Updated 25 October 2026 · By Denis Celik
Short answer
Build your budget from the sales channel, product category, stock location and staffing plan. Separate one-off setup, recurring costs, share capital and working capital. Use the reference figures below as anchors, then replace them with quotes for your own setup.
| Item | 2026 figure | Source |
|---|---|---|
| VAT | 19% standard, 7% reduced rate | |
| Statutory minimum wage | €13.90 per hour (from 1 Jan 2026) | |
| Employer social-security share | Roughly 21–23% of gross salary up to contribution ceilings. Estimate based on pension 18.6%, unemployment 2.6%, health 14.6% + average 2.9% additional, and care 3.6%; employer pays about half. Accident insurance and levies are additional; actual health-fund rates and regional care-insurance rules vary. | |
| Contribution ceilings | €8,450/month (pension, unemployment); €5,812.50/month (health, care) | |
| Corporate tax + solidarity surcharge | 15% + 5.5% of that = 15.825%; corporate tax scheduled to fall to 14% in 2028 and step down to 10% from 2032 | |
| Trade tax | 3.5% × municipal multiplier (min. 200%); Cologne 475% = 16.625% | |
| Typical total tax on retained GmbH profits | About 29–33% depending on the municipality (Cologne 32.45% ≈ 32.5%). Calculation from the corporate and trade-tax rows above; distributions are separate. | |
| GmbH share capital | €25,000 (at least €12,500 paid in before registration for a cash formation); UG possible from €1, fully paid | |
| GmbH formation fees (standard template, cash) | Published 2026 examples: roughly €570–€710 notary + register (around €600–740 including trade-office registration), depending on founder count. Custom articles, apostilles, translations and US-parent documents add to this. | |
| LUCID registration | Free | |
| Dual-system licence | From about €40/year for some small-volume setups. Material, quantity, provider minimums and VAT determine your quote. | |
| Authorised representative (packaging) | German provider examples: €55/year for fewer than 250 parcels and up to 65 kg; another offer is €250/year. Recycling fees are separate. Other countries and service scopes need their own quotes. |
Figures as of October 2026. Rates and thresholds change; confirm with your Steuerberater before budgeting.
Landed cost and cash flow
Start with revenue excluding VAT. Deduct product cost, international freight, customs duty, fulfilment, marketplace or payment fees, packaging participation, returns and acquisition spend. Use your tariff classification, supplier quotes and channel contract rather than a generic percentage. A distributor's purchase price and a Shopify retail price are different models, not interchangeable forecasts.
Import VAT and input VAT may be recoverable when the relevant conditions are met, but timing and documentation matter. Ask your tax adviser who is importer of record, whose name appears on the import documents and which registration and reporting route applies. Include inventory deposits, freight payments, marketplace payout timing and refunds in a separate cash-flow plan.
Review German VAT registration and stock-location questions →
Packaging budget
LUCID registration itself is free. System participation, where required, is a separate contract priced by the provider using your packaging materials and quantities. Advisory support, an authorised representative and product testing are separate cost lines. Do not treat a service fee as an all-inclusive packaging licence or assume it covers every product regulation.
Prepare a packaging inventory covering sales, grouped and shipping packaging, expected German sales volumes, materials and weights. Request provider quotes against the same scope, and record which ongoing reporting and representative services are included.
Line by line
One-off fees and company capital
Compare cross-border selling, a registered branch and a subsidiary before paying formation fees. Separate capital committed to a company from money spent on external services.
Recurring payroll and employment costs
Use the proposed role, location and employment arrangement to obtain a payroll calculation. Hiring directly, through a branch or subsidiary, or using an EOR can create different obligations.
Recurring filings and profit-based taxes
Tax depends on legal form, taxable presence, municipality and transactions. Keep tax on profit, VAT cash flow and the fees for preparing returns in separate budget lines.
Registration, participation and support
Identify which regimes apply to the product and packaging. Free register access does not make system participation, representative support or category-specific testing free.
Channel costs and working capital
Quote localisation, fulfilment and support against the actual product range. Model contribution margin and working capital separately, including the cost of returns.
Planning scenarios
Cross-border test
No separate German company assumed. Budget tax advice, import handling, product and packaging compliance, localisation, fulfilment and a controlled channel test. Stock and transaction patterns determine the actual obligations.
First local hire
Add gross salary, employer costs, benefits, recruiting and operational support. Compare direct foreign-employer registration, a branch or subsidiary and an EOR with qualified advisers.
Local operation
Add entity accounts, filings, intercompany arrangements, local contracts, staff and stock. Do not forget the cost and time of restructuring or closing the operation if the plan changes.
Use the reference figures above as anchors, then replace them with quotes for your own setup.
FAQ
The total depends on product category, sales channel, inventory, staffing and structure. Obtain quotes for setup, tax, compliance, localisation and fulfilment, then add working capital. Use the reference figures above for tax, payroll and formation, then add channel, fulfilment and working-capital costs from your own quotes.
No. Share capital belongs to the company and must be distinguished from notary, register and advisory fees. It is not a fee paid away to the state, but capital maintenance rules and the company’s payment obligations must be respected.
Yes. Registering directly in LUCID is free. System participation fees, representative services and paid advisory support are separate. Applicable fees depend on scope, materials, quantities and provider terms.
Include product cost, freight, customs, VAT cash flow, fulfilment and marketplace charges, storage, returns, packaging participation and category-specific compliance. Use the current platform fee schedule and your product dimensions, not a generic margin assumption.
It may be deductible when the legal conditions and documentation are satisfied. Confirm the importer of record, tax registration, import paperwork and reporting route with your tax adviser. Recoverability and cash-flow timing are different questions.
Request a payroll calculation for the intended salary and employment arrangement. As a rule of thumb, budget roughly 21–23% employer social-security contributions on top of gross salary up to the contribution ceilings, plus benefits, equipment and recruiting. The actual health-fund rate, accident insurance and levies affect the calculation.
Ask for a scope-specific quote covering transaction volumes, VAT filings, accounts, payroll and annual statements. Some fees are governed by the German tax-adviser remuneration rules. Compare included work and separate annual charges, not only the monthly headline.
It can avoid the cost of establishing a separate company, but it does not eliminate tax, import, packaging or product obligations. Test the actual goods flow and staffing arrangement with advisers before assuming a structure has no German filing burden.
No. Packaging responsibilities follow the relevant producer and packaging placed on the market, not simply the legal form. Identify who is responsible for each sales and import arrangement. LUCID registration, system participation where applicable and PPWR documentation need their own workstream.
No. This guide supports planning. A German lawyer and tax adviser should confirm legal structure, permanent-establishment exposure, registrations and the treatment of your specific transactions before you commit.
Keep reading
The Germany Readiness Review produces a costed entry plan for your specific product, segment and channel — sizing, structure, compliance and a 90-day roadmap you can take to a board.
Sources and scope
Planning guidance, not legal or tax advice. Requirements depend on your products, transactions and operating model. Confirm the applicable treatment with qualified advisers; provider fees and processing times require current, scope-specific quotes.
