We are familiar with India as certified tax advisors
Benefitax maintains a special India Desk for clients from India, who require support in the area of accounting and taxation in Germany. We are working for large Indian companies some of which are listed on the stock exchange, and serve their German subsidiaries or permanent establishments. This is also applicable for all company sizes like one-man start-up companies, right up to large marketing companies. Thus we are active in the area of Financial Compliance as well as tax consultation. We can give valuable advice to German companies, which want to invest in India and we can also establish contact with Indian certified tax advisors or lawyers.
India Desk as coordinator and facilitator – English, Hindi and Marathi
Mr. Jayant Kirloskar and our Managing Director Mr. Oliver Biernat are mainly responsible for our India Desk. We help Indian companies to establish and develop their commercial operations in Germany. Benefitax offers all types of services in taxation and accounting for commercial operations in Germany to Indian and South Asian companies. Our India Desk predominantly serves as coordinator and facilitator. We provide e.g. expert opinions on cross-border VAT issues, transfer pricing or international tax planning within the context of tax consultation. Upon request, we can serve as a central contact point for all types of questions. All our employees speak English – and Mr. Kirloskar can even help you further in Hindi and Marathi.
Our managing director Oliver Biernat is a Charter Member of TiE Deutschland e. V. Since April 2019 he is also the Treasurer of TiE Deutschland e. V. As Treasurer he will take over tasks such as preparation of financial statements and tax declarations, generate invoices, allocation of budgets for the TiE events.
With 15,000 members TiE Global is a nonprofit venture devoted to entrepreneurs in all industries, at all stages, from incubation, throughout the entrepreneurial lifecycle. With a global reach and a local focus, the heart of TiE efforts lies in its five foundational programs, – Mentoring, Networking, Education, Funding, and Incubation. For more details please click here.
Our experiences in India
Our experts regularly head to India and present about topics like “Invest in Germany” as well as taxation and accounting. Our Managing Director Oliver Biernat visited Pune and Chennai in December 2013 with an official business delegation from Hessen and met with the companies especially in the automotive and IT sectors. He give numerous presentation on the topic “Fiscal aspects of commercial operations in Germany.” The Indian media showed great interest in his talks. Mr. Biernat was a participant in the Film and Pharma Promotion Tour to Mumbai and Goa in November 2011. He gave presentations on taxation and accounting issues, which were of interest for Indian pharmaceutical companies in Germany. In Goa Mr. Biernat visited the Goa Film Festival and on the occasion of an evening reception, he met the Minister of Information and Broadcasting of Government of India, Smt. Ambika Soni as well as the Chief Minister of Goa, Mr. Digambar Kamat. Bollywood superstar Shah Rukh Khan was also present and sat at a neighboring table.
Mr. Biernat had also visited New Delhi and Agra with his then associate Ajax Mohamed (Ph.D. AMU, Aligarh, India) in the year 2007. He participated in a conference of chartered accountants, certified tax advisors and lawyers in New Delhi and visited many experts in their offices in Delhi. In Agra, he visited the Taj Mahal.
Experiences with Indians in Germany
Benefitax has excellent connections in the Rhine-Main region and maintains good contacts with a large number of associations related to India. We are well acquainted with the Consulate General of India in Frankfurt and with the Chamber of Industry and Commerce and with employees of various economic development agencies responsible for India. We regularly participate in events for Indians in Rhine-Main region, such as the German-Indian Round Table.
We have observed that sometimes, easily avoidable mistakes are made (e.g. Not making the financial year of the German entity same as the Indian company in the articles of association, from 1st April to 31st March) and money spent for services, which are free of cost (support for searching an office by the local economic development agencies) or which are useless (registration with many unknown industry registers).
Our office is only 15 minutes from the international airport in Frankfurt and is located in the German financial center of Frankfurt am Main with excellent infrastructure. Contact us, if you want to know more about our services and want to receive a proposal.
5 typical mistakes, which Indians should avoid in order to be successful in Germany
For the production of goods as well as for the provision of services rendered in India, the business model is almost always as follows: Research and production are done at a low cost in India and are sold at a high price in Germany. Our experiences show that even such Indian investors who are good and successful businessmen in India often face great challenges in Germany. In our opinion this is due to the following reasons:
The financial investments made are insufficient
Someone who believes that it is enough to invest half of the minimum nominal share capital of a GmbH in Germany will constantly fails in their endeavors. The costs for personnel, office rent, administration and marketing are generally several times higher in Germany than in India. A person who has the cheapest sales force will rarely succeed. If an entrepreneur estimates to be able to save costs of the GmbH with a UG (entrepreneurial company) (mini GmbH), saves at the wrong end since it does not command any trust. A company owner, who does not have immediate sales revenues which cover the costs from existing customers, should anticipate an initial investment of at least €150,000 to €200,000. If a business owner does not have such funds or customers, they should not invest in Germany.
Indians give up too quickly.
If an investment does not get returns after 6 months in India, then it is cancelled. One must stay invested for at least 1-2 years in Germany before identifying whether the business model works. The break-even is often achieved only after 2 or 3 years.
Lack of involvement in German business practices.
We recommend that management and the Indians employed in Germany are trained in intercultural matters. For example, someone not showing up for the business meetings on time, who delays deliveries, does not pay purchase invoices at all or only after having received several reminders or an entrepreneur who tries to change contract conditions after the conclusion of contract, is not considered as reliable business partner. It is not a surprise then that business partners no longer want to continue working with someone who acts in this manner. Unfortunately, Indian businessmen (obviously wrongfully in individual cases) do not have a good reputation in Germany exactly for these reasons. Something that can make you successful in India, may lead to failure in Germany.
Deadlines are missed
Authorities are sensitive if declarations are not submitted in due time or dues are not paid on time. At first, reminders are sent, following by administrative fines, which constantly increase. Later on, bank account garnishments and bad entries by general credit protection agency (Schufa) are added. Thus, banks and many business partners can plainly see that the company is not a reliable business partner. As a consequence, banks no longer give loans or completely terminate the business relationship; leasing companies also cancel contracts. Unfortunately, many companies with Indian shareholders have problems with the tax authorities and health insurance carriers. Insolvency can be filed in case of frequent repetitions or serious cases, or de-registration of a company from the commercial register can be requested. The concerned persons are then often surprised. It must be noted that a managing director is personally liable with his private assets in certain cases.
Don’t save on marketing.
Appoint German employees for sales activities, even though they are expensive. Indians, who are sent to Germany, often lack the sufficient knowledge of language and the business practices, in order to convince the German customers to buy. Alternatively, even Indians who are well acquainted with Germany, and are permanently in Germany can be appointed. Controlling the German company from abroad often proves to be difficult or impossible if competent company representatives are not on site.
If you want to be successful in Germany, you must get involved in the German market. This is not only applicable for Indians, but for all the foreign investors. Someone who can keeps this advise in mind can make a lot of money in Germany. Indian clients, supported by us for a long time, do not make these mistakes. Learn from them!