Opening a business account in Germany

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  1. Introdução
  2. What is a business account?
  3. When is a business account legally required?
  4. What are the benefits of a business account?
  5. How much does a business account cost?
  6. What factors should be considered when comparing business accounts?
  7. Which types of banks offer suitable business accounts?

Opening a business account is not just useful for managing business finances—it is actually mandatory for some legal formations. In this article, you’ll find out what a business account is, why it can be beneficial for businesses, and what you need to consider when choosing your business account.

What’s in this article?

  • What is a business account?
  • When is a business account legally required?
  • What are the benefits of a business account?
  • How much does a business account cost?
  • What factors should be considered when comparing business accounts?
  • Which types of banks offer suitable business accounts?

What is a business account?

A business account, sometimes referred to as a company account, is a bank account that is used exclusively for business transactions. Business accounts are therefore geared toward businesses, tradespeople, and self-employed individuals who want to keep their private and business finances separate—or are legally required to do so.

When is a business account legally required?

Corporations such as limited liability companies and entrepreneurial companies are required by law to have a business account. The account is opened when the business is established, as the business must have capital stock in accordance with Section 7 paragraph 2 S. 2 of the GmbHG (German act on limited liability companies).

Small businesses, self-employed individuals, and freelancers are legally entitled to open a business account. However, note that some banks prohibit the use of private checking accounts for business purposes in their terms of service. Failure to comply with this regulation can, in the worst case scenario, lead to the account being closed. Nevertheless, there are significant advantages to using a business account, and it is recommended to do so even when not legally required.

What are the benefits of a business account?

Business account models have the same basic features as private checking accounts, but with a few additional benefits.

Keeping private and business finances separate ensures transparency in terms of liquidity and accounting. Additionally, bank statements containing business transactions must be retained for 10 years in accordance with the statutory retention period in Germany. If you have a business account, the tax office has less work to do in the event of a tax audit and it has no access to your private transactions.

Using a business account also makes tax returns easier since private incoming and outgoing payments don’t have to be filtered out beforehand. This is particularly beneficial for freelancers and small businesses that are only required to prepare an excess income statement (called “Einnahmenüberschussrechnung,” or “EÜR” in German).

In the case of business structures with several business partners—for example, a civil law company (“Gesellschaft bürgerlichen Rechts” or “GbR”)—the access authorizations for the account can be set as required. In this case, the account holder is the business itself and all authorized individuals have their own bank card and credit card and are able to access the account.

Unlike private checking accounts, business accounts offer a wide range of features and additional services tailored to the needs of businesses, such as integrated tax and accounting software, DATEV exports, and subaccounts—all of which save time in administrative processes.

There are also more extensive financing options with business account models. An overdraft on a business account has a significantly higher limit than an overdraft on a private checking account, and can be used to finance investments or to compensate for unexpected fluctuations in revenue. However, overdrafts for businesses do have higher interest rates and often require a detailed credit check.

How much does a business account cost?

The cost of a business account generally depends on the type of bank and the account model. When choosing your account, it is important to consider how often the business will be booking and transferring money and whether you will be entitled to any special benefits. Most banks reduce the cost of transfers based on the monthly basic fee, so businesses with regular payment transactions will benefit from account models with a higher basic fee.

A distinction is made between paperless and paper-based bookings. Paperless bookings include online transfers, SEPA direct debits, and standing orders, as these are automated and therefore do not require any action on the part of the bank. On the other hand, paper-based bookings such as checks and transfer forms have to be processed by the bank, which means higher fees. The costs for depositing and withdrawing cash and using several bank and credit cards can be reduced by charging a higher basic fee.

The cost of a business account can also increase depending on the additional services offered. And although the fees for business accounts are generally significantly higher than for private checking accounts, the costs for a business account are tax-deductible. However, the business account must be used exclusively for business purposes. The bank statement serves as proof of this in tax returns.

Business accounts without a monthly basic fee are often dependent on a minimum incoming payment. Therefore, the account only remains free of charge as long as a minimum amount is paid into the account each month.

What factors should be considered when comparing business accounts?

The price and services offered on business accounts can vary greatly depending on the bank and the account model, and the choice of account depends on the individual needs of the business. This means that there are several important factors to consider.

One factor to consider when choosing an account model is the legal formation of the business. Some business account providers do not accept certain legal formations. It is therefore advisable to research the account provider’s accepted legal formations before opening a business account. There are also account models that do allow different types of business but specialize in a specific legal formation, such as sole proprietorships. It is also advisable to check compatibility with the business account at an early stage if you are planning to change your legal formation.

Businesses that regularly need to deposit and withdraw cash are bound by the availability of bank branches and ATMs. Ideally, these should be situated close to the business location. The relevant products offered by online-only banks are often limited or expensive.

If your business is dependent on loans or does not have regular incoming payments, a business account model with corresponding financing options is also worth considering. The options might include overdrafts, loans for long-term financing, and the arrangement of promotional loans (state-subsidized loans with favorable terms). Established banks generally offer better options here than fintech banks and neobanks.

Another factor is the availability of advisory services. Personal advice in person or reliable online support can save you the time and expense of researching financial advice yourself if you have any questions or issues. However, this service often means a higher basic fee for the account.

Business account features such as integrated tax software are a useful additional service, but not absolutely necessary when choosing the most suitable business account. This is different in the case of special payment methods, such as SEPA Direct Debit B2B for secure payment transactions with business customers, or the SWIFT payment system for international transfers.

Business accounts also differ in the number of subaccounts, credit cards, and bank cards offered, as well as the option of multibanking (i.e., the option to manage third-party bank accounts).

Depending on whether the business account is offered by a branch or direct bank, the way in which it is accessed and managed may also differ. Businesses looking for mobile online banking or banking apps in particular are often better served by more modern direct banks and fintech banks.

For businesses with several business partners, the means of access and the possibility for multiple people to have access are also important. A “both-to-sign” joint account, which can only be used with the consent of all named parties, is a good option.

Which types of banks offer suitable business accounts?

In Germany, business accounts are generally offered by branch banks (Filialbank), savings banks (Sparkasse), direct banks (Direktbank), and fintech banks or neobanks. Banks and providers differ not only in their business account models and target groups, but often also in the values they represent and the associated prestige. It is therefore important to consider whether the bank’s image is a good fit for your business, as well as whether it offers the services you require.

Branch banks and savings banks are characterized by their branch network with a large number of brick-and-mortar locations. A business account with a branch bank or savings bank is best for businesses that regularly pay in and withdraw cash and want access to personal advice. Established branch banks and savings banks usually cater to all legal formations and offer the most comprehensive range of financing options and services, but the monthly account management fee is therefore higher. Businesses that manage their accounts exclusively online often do not benefit from branch banks and savings banks.

Direct banks do not have a branch network and are therefore only accessible online. Direct banks are primarily aimed at companies that do not require regular access to cash and in-person advice. Compared to branch banks and savings banks, business accounts with direct banks are cheaper and are known for user-friendly online banking. However, direct banks often offer fewer financing options and do not accept as many legal formations.

Fintech banks, or financial technology banks, are service providers that operate exclusively online and offer attractive account management prices and a variety of additional features and modern user interfaces. However, the strong focus on digitalization means that fintech business accounts incur significantly higher fees for cash deposits and withdrawals. Fintech banks often do not have their own banking license, but are instead affiliated with other banks. Financing options for fintech business accounts are therefore less favorable or not available at all.

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