There is a moment when individual irritations become a pattern. For many entrepreneurs it was the day not a single train ran in Europe’s largest economy because the radio system between drivers and signal boxes had failed. This article skips the mood music and lays the numbers side by side: infrastructure, economy, healthcare, bureaucracy. Then it shows what the alternative concretely looks like — not as an escape fantasy but as a structure you can build.
In Germany, the trains have stopped running on time, bridges have been shut over safety fears, and the country’s largest carmaker, Volkswagen, is cutting a sixth of its workforce. The government’s response amounts to a shrug, dressed up as reform.
When the foreign business press summarises a country’s condition this way, it is no longer a mood piece — it is a location assessment. And it matches what German institutes measure themselves.
Four systems that no longer deliver
Infrastructure
The perceived investment backlog of German municipalities reached a new record of EUR 231.2 billion in 2026 — up EUR 15.5 billion year on year and 67 percent higher in nominal terms than in 2018. The largest gaps: EUR 68.9 billion in schools, EUR 53.7 billion in roads.
On the railways, only 60.1 percent of long-distance trains ran on time in 2025 (2024: 62.5%; 2015: 74.4%), and in October 2025 the figure sank to 51.5 percent. The roads tell the same story: in North Rhine-Westphalia one in three motorway bridges is now judged to need repair, and the A565 Rhine bridge near Bonn was closed without warning. Stuttgart 21 has been running for over two decades and now targets 2031.
What matters for entrepreneurs is not the statistic but its operational effect — and that has been measured: the share of companies reporting infrastructure as an impediment to their business rose, according to the Institute for German Economic Research, from 59 percent (2013) to 84 percent (2026).
The economy
Two consecutive recession years — 2023: −0.9 percent, 2024: −0.5 percent — and in 2025 minimal growth of 0.2 percent, carried largely by consumption while exports fell back and investment weakness persisted. Volkswagen, the country’s largest carmaker, is cutting 100,000 of 600,000 jobs worldwide according to The Spectator, with four domestic plants on the line.
Healthcare
Between 2020 and 2024, 88 hospitals filed for insolvency; 2025 added 23 filings affecting 36 hospital sites. Around 80 percent of all hospitals are loss-making, with an average margin of minus six percent. The RWI’s Krankenhaus Rating Report 2026 expects roughly 70 percent of clinics to post annual losses by 2030.
In parallel, statutory health insurance carries a deficit of roughly EUR 19 billion. The answer is not expansion but savings: EUR 16.3 billion by 2027, EUR 42 billion cumulatively by 2030 — plus, from 2028, a 2.5 percentage point surcharge for covered spouses while the contribution ceiling rises to EUR 85,000.
Bureaucracy
The ifo Institute puts annual economic output forgone to bureaucracy at EUR 146 billion; the National Regulatory Control Council puts direct costs alone at EUR 65 billion. More than half of it stems from commercial law (31%) and taxation (22%). The federal government’s stated reform target: minus 25 percent, roughly EUR 16 billion — one sixth of the ifo figure.
What you pay for it
The return would be one thing — the price is another. Germany sits at 49.3 percent on the tax wedge for single average earners, rank 2 in the OECD and roughly 14 percentage points above the 35.1 percent mean. The coalition decision of July 2026 lowers the wealth-rate threshold to EUR 250,000 and adds a new 47 percent bracket; with the solidarity surcharge that means about 49.6 percent marginal burden, and above 50 percent for sole traders in high- multiplier municipalities. Details in German Tax Reform 2026.
On top comes a risk other countries do not carry in this form: the warning- letter and supervisory apparatus. How quickly that becomes existential is shown by the case in Ad disclosure: a EUR 37,803.50 fine — fine first, insolvency proceedings after.
How cost and delivery relate overall — a government ratio above 50 percent, Europe’s most expensive household electricity, the EU’s most expensive health system against a life expectancy below the EU average — is set out in Government ratio 50.3%.
That this calculation increasingly runs against the location is no longer an opinion: 14 percent of German adults — roughly 8.2 million people — plan to leave the country within five years according to INSA. Among 30-to-39-year-olds it is 27 percent. More in Emigration: 8.2 million Germans.
The counter-calculation
For location-independent business models — software, consulting, e-commerce, content, agencies — there is a structure that has worked for years:
| Germany as a location | Georgian structure + residence | |
|---|---|---|
| Operating income tax | Corporate plus trade tax on an ongoing basis; sole traders above 50% marginal | 1% on turnover up to GEL 500,000 (Small Business Status), 3% above |
| Retained profits | taxed as they arise | Estonian model: 15% only on distribution, retention untaxed |
| Foreign dividends, private | taxable | exempt under the territorial principle |
| Crypto gains, private | taxable, with holding periods | 0% income tax, VAT-exempt |
| Social contributions | mandatory, rising, spouse surcharge from 2028 | no mandatory contributions — provision organised and budgeted yourself |
| Bureaucracy | EUR 146bn in forgone economic output per year | incorporation in days, lean ongoing obligations |
| Right to stay | — | 365 days visa-free for citizens of around 95 countries |
| Domestic warning-letter risk | structurally present | falls away insofar as the German market is not specifically targeted |
The building blocks
The combination we set up most often in Tbilisi has three components that achieve little individually and a great deal together:
Three blocks, one structure
-
Residence — the actual lever
Genuinely give up German residence and establish Georgian tax residency (183-day rule or HNWI programme). Without this step everything else is inert — it is the core, not the trimming.
-
Georgian company — the operating base
Small Business Status at 1% of turnover for sole traders, or an LLC on the Estonian model where retained profits stay untaxed and only distribution triggers 15%. Plus multi-currency accounts at BoG, TBC or Liberty.
-
US LLC — the front to the world market
For US clients and for payment providers that expect a US entity (Stripe, PayPal, Amazon). As a pass-through without a US permanent establishment it is transparent — taxation follows the member, and therefore your Georgian residence.
On how these interact: US LLC and Georgia, Virtual Zone vs. International Company and the 1% tax in Georgia.
Where you actually live with it
The practical appeal is that the structure does not tie you to one place. Tbilisi is the anchor point for many — 365 days visa-free, European in character, low cost of living, functioning banking, fast internet. Others move between Georgia and South-East Asia: Thailand, Vietnam, the Philippines, Bali. For an online business the desk is wherever the laptop is.
Thailand as a worked example: separate immigration from taxation
Since July 2024 Thailand has offered an instrument built for exactly this model — the Destination Thailand Visa (DTV): valid five years, 180 days per entry plus a single 180-day extension, against proof of THB 500,000. It expressly permits work for foreign clients and companies — including your own Georgian company — without a Thai work permit; Thai employers and Thai-sourced income are prohibited. In immigration terms this is one of the best offerings worldwide for location-independent entrepreneurs.
But a visa governs residence, not taxation. Thai tax residency sits in the Revenue Code and attaches to presence alone — from 180 days in a calendar year, irrespective of visa class. Neither the DTV nor the Thailand Privilege card (formerly “Elite”) contains any tax exemption; the widespread claim that the Elite visa delivers “up to ten years tax-free” is marketing, not law.
| What it delivers in immigration terms | Tax effect in Thailand | |
|---|---|---|
| DTV | 5 years, 180 + 180 days per entry, work for foreign clients without a work permit | None. From 180 days you are tax resident like anyone else |
| Thailand Privilege ("Elite") | 5 to 20 years of residence, concierge services | None. The status does not alter the 180-day rule |
| LTR — Work-from-Thailand Professional This is exactly where the typical solo entrepreneur falls out | 10 years | Foreign-income exemption under Royal Decree 743 — but only with a qualifying employer (listed, or around USD 50m revenue over three years). Your own small company does not qualify |
| LTR — Wealthy Global Citizen | 10 years | Exemption under Royal Decree 743 — against proof of assets, income and investment |
This is precisely why Georgia stays the anchor in this model and Thailand the residence option — not the other way round. Anyone staying under 180 days per calendar year in Thailand does not become tax resident there, and the Georgian residence carries the structure. Anyone wanting to live in Thailand permanently needs either the LTR category with real capital or honest Thai tax planning. Both are workable — just not with a visa alone. In every case, one clear, documented centre of life beats four half-stays.
The honest part
An article showing only the sunny side would be no basis for a decision. What you actually give up and have to handle:
- The statutory social safety net — health, care and pension cover replaced privately
- Exit taxation under § 6 AStG on holdings from 1% — calculate before you move
- Extended limited tax liability under § 2 AStG for up to ten years
- Proximity to family, network and familiar legal certainty
- Actively maintain and document tax residency
- Build genuine substance — decisions are taken on the ground
- Factor in CRS reporting — Georgia has exchanged account data since 2024
- Involve a tax adviser at home before departure
And the most important qualification, which this article is not meant to soften: a company on its own achieves nothing. Anyone who stays resident in Germany and decides from there has a German place-of-management permanent establishment under § 1 KStG together with § 10 AO — with full tax liability on worldwide income. The structure only takes effect with an actual relocation. Why that is so, and what German jurisdiction attaches to in detail, is set out in Georgian company, German authorities.
For anyone who can leave, the balance nonetheless remains clear: a location demanding record levies while delivering EUR 231 billion of investment backlog, 60 percent punctuality and 80 percent loss-making hospitals has stopped earning its price. The alternative is not a theory — it has been our daily business since 2019.
Frequently asked questions
FAQ
Is this criticism of Germany as a location not overstated?
The figures do not come from opinion pieces: EUR 231.2bn investment backlog (KfW Kommunalpanel 2026), EUR 146bn in annual bureaucracy costs (ifo Institute), 60.1% long-distance punctuality in 2025, roughly 80% loss-making hospitals, two recession years in 2023 and 2024. You may share the assessment or not — the data is solid.
Who is the Georgian structure actually suitable for?
Location-independent business models: software and IT, consulting, agency services, e-commerce, content and digital products. What matters is that the service is not tied to a German location and that you are willing to genuinely move your centre of life. For place-bound operations with plant, branches or local customers it is not a model.
How much tax do I actually pay in Georgia?
As a sole trader with Small Business Status, 1% of turnover up to GEL 500,000 per year and 3% above that. For an LLC the Estonian model applies: retained profits stay untaxed and only distribution triggers 15%. There are no mandatory social contributions — but you must organise health and retirement provision yourself and budget for it honestly.
Why would I additionally need a US LLC?
Mainly for market access and payment processing: many US clients and platforms such as Stripe, PayPal or Amazon expect a US entity. As a pass-through company without a US permanent establishment it is fiscally transparent — taxation follows the member and therefore your Georgian residence. Details in our US LLC articles.
Can I live in Thailand or Vietnam with this structure?
Yes. Since July 2024 Thailand has even created a visa built for it: the DTV, valid five years, 180 + 180 days per entry, permitting work for foreign clients and your own foreign company without a Thai work permit. In immigration terms that is excellent. In tax terms it changes nothing: from 180 days in a calendar year you become a Thai tax resident, whatever your visa.
Is the Thai Elite visa really ten years tax-free?
No, that is a widespread misconception. The Thailand Privilege card (formerly Elite) governs residence only and contains no tax exemption whatsoever. For tax purposes the Revenue Code 180-day rule applies to Privilege members like everyone else. A genuine exemption for foreign income exists only via the LTR visa under Royal Decree 743 — and its Work-from-Thailand Professional category requires a qualifying employer, which your own small company does not satisfy.
What is the most common mistake when setting this up?
Reversing the order: incorporating first and thinking about departure afterwards. Without giving up German residence the company remains taxable in Germany through its place of management (§ 10 AO), and exit taxation under § 6 AStG gets more expensive as company value grows. Residence first, structure second.
This article is general information and does not constitute legal or tax advice. The figures cited come from the KfW Kommunalpanel 2026, the ifo Institute, the Institute for German Economic Research, the RWI Krankenhaus Rating Report 2026, the Federal Statistical Office, the OECD and reporting by The Spectator of 6 July 2026. Departure, exit taxation and building a foreign structure are case-specific questions with significant financial consequences — you must involve a tax adviser in your home country. As of August 2026, subject to changes in the legal situation.