Applying for a start-up grant
Description
A start-up grant, or "Gründungszuschuss", is intended to help you with your living costs and guarantee social security benefits if you set up your own business. You are only entitled to a start-up grant if there are no other suitable job openings for you and if you want to be self-employed as your main occupation.
Before applying for a start-up grant, you must be registered as unemployed. You are not eligible for the grant if you are entering self-employment straight from a job. There are two start-up grant phases:
- Phase 1: a 6-month start-up grant equal to the last unemployment benefit received for living costs plus a monthly lump sum of EUR 300 for social security
- Phase 2: a 9-month grant of EUR 300 a month
After phase 1, you may be able to receive a start-up grant for a further 9 months. This will be decided on an individual basis.
The start-up grant will not be subject to income tax however much you earn on top of it.
You cannot apply for funding if you are eligible for a state pension.
You can apply for the grant in addition to other funding for self-employment. There is no legal entitlement to the start-up grant.
- You are in receipt of unemployment benefit I.
- You are still entitled to at least another 150 days of unemployment benefit upon becoming self-employed.
- You are able to prove that you have the knowledge and skills to pursue the activity in a self-employed capacity.
- You can provide a favourable opinion from a professional body on the viability of setting up as self-employed.
- The Employment Agency (Agentur für Arbeit) was unable to find a suitable opening for you on the job market.
- You are not eligible for a state pension.
- Evidence of your knowledge and skills (e.g. qualifications, professional experience or participation in activities to help you set up as self-employed)
If you want to work in a licensed trade, you will also need:
- A trade permit
- For craft or trade professions:
- Confirmation of registration in the Register of Trades and Crafts with the Chamber of Trades and Crafts
You must also submit an opinion from a professional body, for which you will need:
- A business plan
- Your CV (including evidence of qualifications)
- A capital requirements and financing plan
- Turnover and profitability forecasts
- Information on what proportion of the business will be in a self-employed capacity
None
You must apply before you set up your own business.
The processing time will depend on the individual case.
Your local Federal Employment Agency.
Forms: available from the Employment Agency
Can I do it online? No.
Do I need to do it in writing? Yes.
Do I need to attend in person? Yes.
You must apply for the start-up grant through the Employment Agency:
- Make an appointment with the Employment Agency.
- Your adviser will tell you what financial support is available if you are setting up as self-employed and what conditions you need to meet.
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You will then need a professional body to issue a favourable opinion on your start-up project. You can choose which one to use. Competent professional bodies include:
- Chambers of commerce and industry
- Chambers of trades and crafts
- Guilds
- Professional chambers
- Professional associations
- Credit institutions
- The Employment Agency will also check whether you meet the professional requirements to set up your own business.
- Then submit your start-up grant application in writing to your local Employment Agency.
- The Employment Agency awards the start-up grant for an initial period of 6 months (phase 1).
- If you wish to continue receiving the reduced grant for a further 9 months (phase 2), you must submit a new application.
Before taking the leap into self-employment, check your insurance obligations with your health insurance and pension fund, and find out whether you will still be covered.
Federal Employment Agency (Bundesagentur für Arbeit)
