Cross Border Setup: Legal, Tax and Compliance Steps UK Businesses Must Take in Germany

Introduction: You Cannot Just Turn on Ads

Many UK companies assume that expanding into Germany is a simple matter of translating the website and launching new ad campaigns. In reality, entering Germany as a foreign business - especially after Brexit - involves a range of regulatory, tax and legal obligations. These are not optional details. They are required foundations. If you get them wrong, it can stall your campaigns, delay revenue, or worse - trigger fines, blocked payments or reputational damage.

In this article, I explain the specific legal, tax and compliance steps I guide clients through when setting up cross-border operations in Germany. This includes formal registration, tax filings, data handling, payments and practical tips that save both time and stress.

Handelsregister: Registering for Legal Recognition

If you are offering products or services regularly in Germany, you may need to register your business in the Handelsregister - the German commercial register. This is not just for GmbH entities. Even UK-based companies with permanent operations, sales teams or fulfilment partners may trigger this requirement.

Registering usually involves:

  • Appointing a local legal representative
  • Translating and certifying key company documents
  • Notarising agreements or statements of intent

Without this, German partners may refuse to work with you. It can also delay invoice payments or procurement inclusion.

I often work with local legal counsel to set up a UG or GmbH entity in Germany if ongoing presence is required. If the activity is limited, a branch registration or fiscal representation may be sufficient.

Umsatzsteuer: VAT in Germany Is Not Optional

If you sell to German customers, you are responsible for charging and collecting Umsatzsteuer - German VAT. Post-Brexit, the UK no longer benefits from the simplified cross-border VAT rules inside the EU.

You must:

  • Register for a German VAT number (not just an EU one)
  • File returns with the Bundeszentralamt für Steuern
  • Charge local VAT rates correctly (19 percent standard, 7 percent reduced)

Even digital services and SaaS products can trigger VAT registration. Germany has strict audit processes. I always engage a Steuerberater - a local tax advisor - to manage filings and correspondence with authorities.

If you use Stripe or PayPal, VAT handling may appear automatic, but it often fails to match the exact line-by-line reporting required by German law. Many platforms lack localisation for invoice layout, date format and reverse charge annotations.

Payment Setup: Stripe Might Not Be Enough

Stripe works well in the UK. In Germany, it is accepted in some circles but still lacks deep localisation.

Buyers expect to see:

  • SEPA direct debit
  • Rechnung (pay by invoice)
  • Klarna, Giropay, Sofort
  • Bank transfers with structured references

Stripe has started offering some of these, but I often supplement it with Adyen, Mollie or direct integrations with German PSPs.

German ecommerce platforms and marketplaces sometimes reject Stripe statements as incomplete or informal. Your checkout process should allow full address entry, VAT breakdown, and invoice generation in PDF format with Impressum details.

DSGVO: Data Protection in Germany

Germany takes the GDPR - locally known as DSGVO - very seriously. Cookie banners that are legally acceptable in the UK are often non-compliant in Germany.

Key differences:

  • Pre-ticked consent boxes are illegal
  • Cookie banners must offer equal accept and reject options
  • Consent logs must be maintained and provided on request

If your site is running Google Analytics, Facebook Pixel or embedded YouTube videos without consent layers, you risk formal warnings and fines.

I implement cookie consent frameworks like Klaro or ConsentManager, and review hosting arrangements to ensure data is processed within the EU. Hosting on AWS Frankfurt or Hetzner helps with compliance reassurance.

You also need a complete Impressum, privacy policy and data controller contact on your website.

Practical Integrations and Automation

I often set up tools and flows that simplify ongoing compliance:

  • Connect German payment processors to accounting tools like Lexoffice or Datev
  • Use BigQuery for privacy-safe analytics with server-side tagging
  • Create legal and tax templates for customer invoices and transactional emails

These details make the difference between operating legally and scaling successfully.

Final Thought: Germany Is Worth It - But You Have to Prepare

Germany is one of the most valuable markets in Europe - but also one of the most structured. British businesses that treat it as just another region often stumble.

The good news is this: once set up properly, German customers are loyal, methodical and value long-term relationships. But they expect you to take compliance seriously.

If you are planning to expand into Germany and want to do it right - not just fast - I can help you handle the registration, setup and localisation in a way that supports real, sustainable growth.