Importance of Business Bank Account : Why Open a Business Bank Account in Germany

  • September 04, 2023
  • Dushyant Sharma
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If you are a freelancer, a self-employed individual, or a business owner new to Germany, opening a business bank account with lots of paperwork can be difficult. Because of this many businesses doesn't open a separate business account and mix personal and business transaction in one account. 

For easy separation of expenditure, it is advisable to keep personal and business accounts separate. But before opening a business bank account in Germany keep some things in mind. Below in this article, the importance of business accounts and key factors are provided.

Importance of Having a Business Bank Account in Germany

Every business must have at least three current accounts at three different banks in Germany. So, as an entrepreneur, you must open the following accounts:

  1. A business current account (Girokonto) at a Sparkasse.
  2. A second business current account at a second bank.
  3. A personal current account at a third bank.

There’s a question about why you should open your business account if you already have a private bank account. So, the explanation is easy, having different bank accounts makes liquidity management much easier. 

With a business account, transactions of your business will be separated from your personal transactions. In your business account, you will receive payment from your customers and can pay for the expenditure of the business. For the payment of salaries can also be done through the business account. For tax audits having separate bank accounts is the best decision that you can take. Below are some other reasons to make the personal and business bank account separate in Germany:

  • A business account allows a clean separation of business and private expenses. It is beneficial regardless of company size or turnover, especially when financial matters become more complex.
  • Early separation of personal and business transactions can prevent higher administrative expenses in the future. As with increased payment transactions and bookings overview can be quickly lost.
  • The tax officer can only view business transactions through account statements, and your private expenditures are excluded and confidential.

Difference Between Traditional and Online Business Account

In Germany, there are two ways to open a business account. First is a Traditional Business Account and second is an Online Business Account. Both accounts have different pros and cons. Let’s check the difference between a traditional business account and an online business account:

 

Point of Difference

Traditional Business Account

Online Business Account

Accessibility

Traditional banks usually require you to visit a physical bank to access your bank account.

Online banks do not require you to visit a physical bank as they don’t have any physical presence. You can access your account through your phone or laptop from anywhere.

Safety and Security

The trust of people is more on traditional banks as they are physically present and people have been using it for decades.

For monetary purposes, online banking is mainly considered unsafe and there is a chance of fraud or theft of the person's identification.   

Fees

Traditional banks charge fees on a monthly, quarterly or yearly basis. 

Mostly the new online bank accounts offer a free basic account and other services to increase customers. 

Better Interest Rate

The rate of return is lower, the average interest rate at banks in Germany is only 0.14%.

Usually, online banks offer lower fees and higher returns.

 

Things You Must Know About Business Bank Account in Germany

For some entrepreneurs, it is possible to handle all their business transactions from their private accounts. The tax officer will treat the private account as a business account. As per the law, bank statements in Germany must be kept for ten years. During the tax audit of the business, no transactions should be hidden or obscured from the tax officer.

The entrepreneurs must obtain the original bank statements either by post or from a statement printer (Kontoauszugsdrucker). Avoid keeping all the statements in a PDF file. The reason behind this is that a paper printout of an electronic account statement does not meet the retention requirements outlined in Article 147 of the German tax code (AO).

Before opening a business bank account in Germany, you must check the different offers and services provided by the bank. Below is a checklist which help you to get the best services through banks.

  • Costs for opening an account (Kontoeröffnung)
  • Fees for account management (Kontoführung)
  • Costs for individual bookings (Einzelbuchungen)
  • Amount of interest on credit balances (Guthabenverzinsung)
  • Line of credit (Kreditrahmen) including at short notice and the fees for it
  • Distribution of ATMs and the possibility of withdrawing money from third-party ATMs
  • ATM withdrawal fees
  • Costs for EC/credit card

Best Business Bank Accounts in Germany for Foreigners

Below is a list of banks which are considered the best for English speakers, and foreigners. 

N26 

It is Europe's largest mobile bank, offering a free checking account, small loans, and a savings account for every registered business in Germany. It's a modern alternative to traditional banks, designed for the digitally savvy generation. The user-friendly mobile app allows for real-time banking and customer service, all in the English language. It's a top choice for foreigners looking for a German bank account and accepts most nationalities as an online bank.

Commerzbank

Commerzbank is the second-largest bank in Germany, offering a wide range of banking options, including securities accounts, loans, investments, foreign currency pick-up, and personal consultations. The bank welcomes customers of all nationalities, as identity verification can be done in person at local branches. However, the online account opening process may be a challenge for non-residents, as it is currently only available in Germany, despite the bank's claim of offering the fastest online sign-up in the country.

Revolut

If you're an international resident in Germany whose nationality is not accepted by any local banks, Revolut can be a great alternative. They accept any nationality as long as you're a resident of the country. All you need to verify your identity is your passport and visa, no other documents are necessary. 

Conclusion

To conclude, never use a single bank account for both personal and business transactions. If you use a single bank account then it will create unnecessary complications and your personal transactions will go to the tax officer during tax audits.

Freelancers and self-employed people usually don’t need a separate bank account until their transactions cross a certain limit. But for proprietors and business owners having a separate bank account is important. At Registrationwala, we assist entrepreneurs in business registration in Germany from application to finally obtaining the registration certificate.

 

 

 


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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