CUSTOMER STORY

Pleo: Growing is hard. Growing into Germany is even harder.

Entering the German market involves a lot of moving parts that can easily come apart without proper handling. Having a knowledgeable partner on the ground that you share a common language is essential for expanding into new terrain.

Key results:

Provided Pleo with a cost-effective way to create the business entity needed to expand its operations into Germany.
Our bilingual services removed the language barriers facing Pleo when entering Europe’s largest economy.
By getting us to instantly set up and manage its payroll, Pleo could start building a team in Germany right away.

Services used with firma.de:

Find the right legal form

The business

What is Pleo

How to efficiently manage business expenditure is an issue that is as widespread as it is annoying. Pleo was born when its founders, who after struggling with this very issue in different roles ranging from employee to CFO, decided to do something about it. Together they built a solution that applies the Danish brand of simplicity and functionality to the messy world of expense management and reporting. In other words, Pleo is making company spending easier for everyone.

The obstacles

Expansion is never easy but expanding into Germany is something else

For a company that is trying to ease the burden of bureaucratic systems, Pleo came face to face with the biggest baddest bureaucratic system when they decided to expand into Germany.

Germany’s incorporation process is antithetical to the one in Denmark where Pleo is based. The latter has company formation regulations that promote entrepreneurship while the former’s is all about imposing rules to promote order. In Denmark, you can incorporate a company online in no time at all, whereas in Germany you have to submit several paper forms to different government agencies, visit a notary, open a business account to deposit your share capital and get entered into the commercial register.

This is something that Pleo came up against when they took that first crucial step to enter the German market by creating a business entity. The road map to incorporation is long and most of it has to be done IRL.

After incorporation, the bureaucracy party is just getting started

Once you jump through the company formation hoops in Germany, the fun doesn’t stop there. You have to then figure out payroll, income tax and all the related payments to do with that. For those of you who have ever seen a German employee payslip, you know that this isn’t a straightforward matter.

To hire people, Pleo had more hoops to jump through, including applying for an employer number (an eight-digit identifier for the name, address, and economy class of the company). This is the only way you can register your employees for social and health insurance. The company must also apply for a dedicated tax number and statutory accident insurance (also known as Berufsgenossenschaft).

Once everything is set up, then you’ve gotta pay the people working for you. Figuring out the right individual employee payments, tax collection, social insurance contributions, sick pay and maybe even maternity pay can’t be done by a layman.

The way

English-speaking partner on the ground

Expanding a business into the German market has a lot of moving parts that can take time to put together. First and foremost, the company incorporation stage takes time. It’s not a process that can be completed in a few hours like in Denmark. If you’re an international that doesn’t speak German legalese you need someone on the ground to navigate for you.

This is where we come in. firma.de is a single solution for smaller businesses and startups, just like Pleo, that want to expand into Germany. We speak both English and German so there are no language barriers and we can handle all those pesky logistics.

Staying nimble when entering a new market

When you’re expanding an international startup it’s not a great idea to hire finance people when you’re testing the waters of a new market. Entering a new market naturally has a lot of unknowns so staying agile with outsourcing is a good strategy. However, finding the right partner to outsource to can be tricky.

There are a lot of different firms out there but those that cater to the needs of international businesses do so at a premium. For companies that want to expand into Germany but still keep their operations lean, there aren’t a whole lot of options out there.

However, firma.de filled this void for Pleo by providing a cost-effective way for startups to outsource these necessary financial functions without adding heavy overheads.

Nudging Germany into the 21st Century!

At firma.de we love startups that build products that make doing business in Germany easier. It doesn’t matter if they’re homegrown or from abroad, a company that offers innovative solutions to SMEs is always a good thing. And we love Pleo’s ambitions to “empower all employees in Germany”. Anything that lightens the administrative load in Germany is something we want to get behind.

Pleo also has a special place in our hearts because part of their market entry strategy was to work to reform Germany’s archaic rules that forced businesses to store physical paperwork for expenses for at least ten years. The thing that regulates bookkeeping in Germany, known as the GoBD (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff ) has been revised so that going 100% digital with your business expenses is now 100% compliant.

Given how much of a laggard Germany can be, we are thrilled that businesses now have one less bureaucratic thing to worry about thanks to Pleo’s digital solution!

Thank you, Pleo.