A businessperson who wants to run a trade (Gewerbe), for example, as an artisan, caterer, or producer of goods
A member of a “liberal profession”, also called “activity professions” (Tätigkeitsberufe)
The key factor of self-employment in Germany is the distinction between business people (“trade professions” or Gewerbetreibende) and freelancers (“liberal professions” or Freiberufler) professions. Liberal professions include jobs such as lawyers and psychologists, freelancing artists and writers. Trade professions are for businesses that produce goods, artisans, etc. The distinction makes a big difference for registering a business, membership in professional associations, and taxes.
Freelancers
According to German income tax law (Einkommensteuergesetz), a freelancer is described as a self-employed person whose business is either artificial (i.e. painter, musician), scientific, authorial (professional writing), teaching or educational, or if their work is “determined by his or her personal knowledge of particular profession”.
Examples of freelance work include physicians, dentists, journalists, translators, lawyers, business consultants, as well as IT-consultants, masseurs, nurses and more. In general most professional services are likely to fall under the freelancer category.
A few benefits for freelancers:
- Do not have to be registered at the Commercial Registry.
- Do not have to become a member of a local Chamber of Commerce.
- Do not have to prepare annual financial statements for taxation purposes (simple profit-and-loss statements are sufficient)
- Do not have to pay trade tax (aka local business tax)
- Generally not liable to the German social security system, governmental health care, unemployment or pension insurance
Apply for a Visa
Before moving to Germany from a non-EU country for self-employed work, a visa and residence permit will be required, which can be applied for at the local German embassy.
Basically, a Schengen visa is suitable for short-term stays of up to three months, while a national visa is required for a longer stay.
The section on Visas outlines the steps and time required to apply for visas and residence permits for both companies and freelancers.
Time: 2 weeks for Schengen visa. Up to 10 weeks for National visa
Cost: €60
Apply for Residence Permit
After arriving in Germany with the appropriate visa, apply to get a residence permit at the Einwohnermeldeamt (Residence Registration Office) within one week of arrival.
See the section below on Visas for details on applying for a residence permit.
Register with local tax authority (Finanzamt)
Register at the local tax authority for a tax file number (Steuernummer) where the district of your office or where you are living (if working from home).
The usual term for the application form is Fragebogen zur steuerlichen Erfassung. This form is generally not available in English.
Most tax offices can be found online by searching for “Finanzamt” plus the district name. Registration can be done by mail or in person.
Mail
- Write a letter stating that you want to work as a freelancer in your profession and are requesting a tax number.
- Include your (office/home-office) address in the letter
- Sign the letter
In Person
- Either download the application form online or arrive in person and ask for a Tax File Number application form.
- Going in person is useful as you can get the form checked before submitting it.
After the application is processed and accepted, the tax authority will send a questionnaire asking for personal details, estimated income in the current tax year and whether you want to opt in for the VAT.
Based on the estimated income the tax authorities will assess income tax installment payments.
Cost: None
Time: Up to three weeks
Register with relevant professional association
The association will depend upon the particular profession.
The website of the Federal Association of Liberal Professions (Bundesverband der Freien Berufe), has further information at: http://www.freie-berufe.de/ueber-uns/mitgliedsorganisationen.html (German only)
Time: 1 day
Cost: None
Get Health Insurance
While employees will be covered by their employers, self-employed people will be required to get their own health insurance if earning more than €395 income per month, less expenses (as of 2013).
You must either arrange private insurance or report to the state-insurance authority (Krankenkasse) to organise a health insurance policy. Private insurance is generally cheaper for individuals while state-insurance usually covers family so it is better for families.
Note: travel insurance does not count for this purpose.
Time: Up to 1 week
Cost: None
Get Accident Insurance (if employing people)
If your work will involve employing people it will be mandatory to have the appropriate accident insurance coverage.
Time: Up to 1 week
Cost: None
Business people
If not falling under any ‘liberal profession’ of a freelancer, business people must follow a process basically the same as setting up a sole proprietor business.
Apply for a Visa
Before moving to Germany from a non-EU country for self-employed work, a visa will be required, which can be applied for at the local German embassy.
Basically, a schengen visa is suitable for short-term stays of up to three months, while a national visa is required for a longer stay.
The section on Visas outlines the steps and time required to apply for visas and residence permits for both companies and freelancers.
Cost: €60
Time: 2 weeks for schengen visa. Up to 10 weeks for national visa
Apply for Residence Permit
After arriving in Germany with the appropriate visa, apply to get a residence permit at the Einwohnermeldeamt (Residence Registration Office) within one week of arrival.
See the section on Visas for details on applying for a residence permit.
Register at the local citizen office (Bürgerbüro)
To do this you will need the following documents:
- Proof of residence certificate (Wohnungsgeberbestätigung) – a form, filled out and signed by your landlord, confirming that you have moved into a new place of residence
- A valid photo ID (e.g. passport)
- A completed Anmeldung form
Cost: Free
Time: 1 day (can be processed within minutes depending on the office and how busy it is)
Apply for a Tax File Number (Finanzamt)
You will need to register at the tax office to get a Tax File Number (Steuernummer). The usual term for the application form is Fragebogen zur steuerlichen Erfassung, and it is generally not available in English.
Your Finanzamt can be found online by searching for “Finanzamt” plus the local district name. Registration can be done by mail or in person.
Mail
- Write a letter stating that you want to work as a freelancer in your profession and are requesting a tax number.
- Include your (office/home-office) address in the letter
- Sign the letter
In Person
- Either download the application form online or arrive in person and ask for a Tax File Number application form.
Going in person is recommended as you can get the form checked before submitting it.
After the application is processed and accepted, the tax authority will send a questionnaire asking for personal details, such as estimated income and you will also be required to inform the tax office of profits and loss accounts and a statement of assets and liabilities.
Cost: None
Time: Up to three weeks
Register with trade office and acquire a trade certificate (Gewerbeschein)
Self-employed business people must notify the local trade office (Gewerbeamt). Depending on the specific kind of business registration may also require a specific business license (Gewerbeerlaubnis) or a craftsmen’s card (Handwerkskarte).
For independent, non-industrial operation of certain trades (e.g. bakers, carpenters or precision makers) entry in the Register of Craftsmen (Handwerksrolle) is also required.
The trades that are affected are listed in the Crafts and Trades Regulation Code (Handwerksordnung) where they can be consulted. The German Chambers of Industry and Commerce (IHK) can also help identify qualifications or certificates you might need for your business (Gewerbeamt).
Cost: General registration costs €20-40.
Additional costs apply if requiring specific business licenses, and depending on the sector the business is operating in.
Note: having a trade certificate (Gewerbeschein) obligates you to pay local trade tax (Gewerbesteuer).
Time: 1 day
Chambers of Industry and Commerce membership (Industrie und Handelskammer)
Self employed business people are required to be a member of one of the Chambers of Industry and Commerce.
If your profession is in the crafts sector or similar, you will need to register either on the Roll of Craftspeople (Handwerksrolle), or the register of activities similar to crafts (Verzeichnis der handwerksähnlichen Gewerbe) at the local Chamber of Crafts (Handwerkskammer).
Generally the trade office will automatically notify the Chamber of Industry and Commerce.
Cost: A yearly membership fee, usually depending on turnover of the business.
Time: Automatic