Where we work · Germany
In Germany two different authorities have to agree, and the order is fixed.
One body certifies that the work is research at all. Only then does the tax office calculate what it is worth. Nowhere else in the markets on this site is the technical decision separated from the money decision — and the other main instrument here switches off permanently the moment the company is founded. We work with German founders remotely from Hyderabad, in English, with no office and no company registered in Germany.
A statutory allowance, with a gate in front of it.
25%, or 35%
The Forschungszulage is a quarter of the assessment base, and a small or medium enterprise within the European definition may request ten percentage points more. § 4 FZulG
EUR 12 million
The assessment base cap per financial year, for expenses incurred after 31 December 2025. It was EUR 10 million before that. For affiliated companies it is one cap across the group, measured per calendar year. § 3 FZulG
70%
The eligible share of a contract-research fee, for work commissioned after 27 March 2024. Fees the contractor passes on to its own subcontractors are not eligible at all. § 3 FZulG
20%
A flat overhead uplift on the other eligible expenditure — but only for projects that began after 31 December 2025. A project already running does not get it. § 3 FZulG
EUR 3,000 a month
The EXIST founding stipend for a doctoral founder, for twelve months, alongside EUR 30,000 of material funds for a team and EUR 5,000 of coaching. The company may not yet be founded when funding starts. EXIST-Gründungsstipendium
69,600
Business foundations of larger economic significance in the first half of 2026, up 3.0% year on year, while total new business registrations rose 8.3%. Destatis, 14 Aug 2026
For a team of three doctoral founders the stipend year is roughly EUR 143,000 once material funds and coaching are counted — our arithmetic from the programme's own figures. It is also the only number on this page that a founder can destroy with a single decision, by incorporating too early.
The certificate comes first, and it is a separate authority.
- A certifying body decides whether the project is research. The statute makes that certificate the basis for setting the allowance, and requires one for each project named in the application. § 6 FZulG
- The first certificate in a financial year is free. Later ones need not be. From the second certificate onward, for further projects in the same financial year, fees and expenses may be charged. So the number of projects a company defines has a cost, and it is decided at the start of the year. § 6 FZulG
- The tax office then assesses the allowance on its own application. Two filings, two bodies, one order. A founder who treats this as a single tax exercise discovers the sequence late, when the certificate is the thing holding up the money. § 4 FZulG
- And the project aid ceiling sits above all of it. Total state aid for one research project, the allowance included, may not exceed EUR 15 million per company and project. § 4 FZulG
Three of those facts point the same way, towards a decision made before any spending: how many research projects to define, and when each one starts. The project count drives certificate fees, the start dates decide whether the overhead uplift applies, and the base cap is annual and shared across a group. It is documentation in month one that becomes cash a year later.
A grant does not trim the allowance. It removes the cost from it.
This is the rule most often described wrongly, and it is not the rule Norway has.
- Both instruments can sit on one project. The statute permits the allowance alongside other funding or state aid for the same project. § 7 FZulG
- But a funded cost is not in the base. Eligible expenses may not be included in the assessment base where those same costs are, or will be, covered by other support or state aid — and that exclusion applies to European funding too. § 7 FZulG
- So the question is a partition, not a sequence. In a market with an intensity ceiling, claiming one instrument trims the other and the planning question is which to claim first. Here the euros are simply assigned to one instrument or the other, which means the budget has to be split before it is spent rather than reconciled afterwards.
- The application has to show the split. The statute requires the application to carry the information needed to check the exclusion, so the record-keeping is part of the claim rather than a courtesy. § 7 FZulG
We are not tax advisers and we do not file anything. The reason this is a commercial section rather than an accounting one is that the partition decides what the grant is allowed to pay for, and that shapes the project plan, not just the ledger.
The stipend cannot start if the company already exists.
- The condition is unambiguous. The company may not yet be founded when funding starts, although incorporation can happen at any point during the funded year. EXIST-Gründungsstipendium
- The university applies, not the founders. Applications go through the university or research institution, which is also where the deadlines come from — the programme itself publishes none. EXIST-Gründungsstipendium
- The team shape is prescribed. At most three people; at least one with a university degree; at most one holding a vocational qualification or a degree more than five years old; students only if they have completed at least half their studies, and not as the majority of the team. EXIST-Gründungsstipendium
- The money scales with qualification. Monthly stipends run from EUR 1,000 for a student to EUR 3,000 for a doctoral founder, with EUR 150 per child, plus material funds of up to EUR 10,000 for a single founder or EUR 30,000 for a team, and EUR 5,000 of coaching, over twelve months. EXIST-Gründungsstipendium
Incorporating in month one is sometimes the right answer. It is a decision, though, and it is irreversible in one direction only — which is exactly the kind of sequencing question worth settling deliberately rather than discovering afterwards.
Where German seed companies get stuck.
| Problem | What it looks like | What we work on |
|---|---|---|
| Incorporating before the stipend | A university-attached team registers the company early to look substantial, and closes a programme worth a six-figure year to a team of three. | Sequencing incorporation against the stipend window and against what the company actually needs a legal entity for in its first months. |
| A grant and an allowance on the same euros | A regional or European grant is budgeted alongside the allowance on the same costs, and the base turns out smaller than modelled because those costs were never in it. | Splitting the budget by instrument before the spending starts, with the records the application will ask for already in place. |
| Too many projects, or the wrong start dates | Work is defined as four research projects rather than one, so three certificates may attract fees; or a project starts a fortnight before a statutory boundary and loses an uplift. | Defining the research programme for the year with the statutory boundaries visible, so the structure is chosen rather than inherited from how the work happened to begin. |
| A round whose paperwork was never checked | The German acquisition subsidy for private investors has its own company conditions: under seven years old, fewer than fifty employees, a size test, German registration, an innovation test, and a limit on venture capital already received. Whether a company meets them is paperwork, and it is the company's paperwork. BAFA, INVEST | Confirming the company's own eligibility early, so the conditions are known before conversations rather than after. We do not arrange finance and we make no introductions as part of advisory work. |
Sources: § 3 FZulG · EXIST-Gründungsstipendium · BAFA, INVEST
Hours, language, tax and data.
- Hours
- India is 3.5 hours ahead of Germany in summer and 4.5 hours ahead in winter. A 09:00 Berlin start is early afternoon in Hyderabad.
- Language
- English. German startups work in English and we do not pretend to draft in German. We keep the statutory terms in German on purpose, because that is what your Steuerberater will use.
- VAT
- Germany is in the EU, so for business services bought from outside it the German recipient accounts for the VAT itself. We do not advise on tax and we quote no rate here. Your Steuerberater confirms the treatment.
- Data
- Germany is in the EU, so the European regime applies directly. We act as a data processor under a written agreement, and founders' work in Founder OS is stored in the EU.
- Invoices
- In EUR, from our Indian company.
- Presence
- None. No office, no local company, no staff in the country.
Certificates, stipends and the things we do not do.
Does this page cover the Länder programmes?
No, and that is a real gap rather than a judgement that they do not matter. Each of the sixteen states runs its own innovation funding, with its own terms and calendars, and we have not surveyed them. What is on this page is the federal layer.
Is the certificate binding on the tax office?
The statute says it is the basis for setting the allowance. It does not say in those words that it binds the tax office, so neither do we. Your Steuerberater will know how it is treated in practice.
How long does certification take?
We could not establish that from the certifying body's own material, so we do not publish a figure. It is worth asking early, because the answer determines when the money can arrive.
Can you prepare the application?
No. We work on the commercial case the research is for. We do not prepare or submit applications, and the decisions belong to the authorities. We make no promises about them.
Do you advise on German tax?
No. We are not tax advisers and we are not registered to give tax advice in Germany or anywhere else. We flag that two authorities are involved and that a grant removes costs from the base, because both change commercial sequencing; your Steuerberater prices them and files.
Do you have an office in Germany?
No. We work with German founders remotely from Hyderabad, in English, and we would rather say that than imply a local presence we do not have.
Figures on this page were last checked on .
Start with the certificate, not the calculation.
A 45-minute call with Dineshwara, scheduled in Berlin time.