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Become a Freelancer in Germany
July 26th 2018
By SympatMe
You’ve always dreamt of working independently?
Then becoming a freelancer in Germany may be the right thing for you!
Becoming a freelancer in Germany involves some bureaucracy.
But it’s manageable.
First of all you should figure out, if you categorise as self-employed (selbstständig) or a freelancer (Freiberufler).
These are two different things in Germany!
Confused? Read on to find out more.
The Difference between ‘Self-employed’ and ‘Freelancer’ in Germany
First lesson: You must distinguish between two terms.
1st term: ‘self-employed’ (Selbstständiger, Gewerbetreibender)
2nd term: ‘freelancer’ (Freiberufler)
Most articles ignore this difference.
Indeed, lots of people use these terms interexchangeably.
What do the two terms have in common?
Both indicate that you are not employed, but you are your own boss.
Let me explain the difference between them.
Being a ‘freelancer’ usually encompasses some ‘brain work’. This means you will have earned an academic degree for the work you do. Freelancers are teachers, consultants, IT-programmers or lawyers, for example.
Confused? Do not worry. Just keep reading. Follow the steps in this article. You will be fine.
You categorise as ‘self-employed’ (Gewerbetreibender) if you work as a self-employed estate agent, commercial intermediary, have a cafe, … etc.
Confusing, he? I agree. But do not worry. For now it does not matter, if you do not quite understand this. It is basically just a German bureaucratic way of categorising different types of non-employed labour.
Whether you categorise as self-employed or freelancer doesn’t matter for the first six steps you need to take.
It DOES matter for the last step however, because ‘self-employed’ people must additionally register at the business registration office (step 8).
If you’re not sure what you categorise as, you should ask someone at the tax office in step number 6.
Now don’t worry about this for now. Just start with step number one… Good luck!
#1 Get a Freelance Visa
Firstly, let me say this.
If you want to work as a freelancer in Germany, you must have a residence title that allows you to take up freelance work.
So let’s find out. Who needs a freelance visa?
〉 If you have an EU-passport, then you don’t need a visa to be a freelancer in Germany.
As an EU citizen, you can take up self-employed / freelance work in Germany without having a visa.
〉 All non-EU citizens must apply for a freelance visa.
If you are not from the EU, applying for a freelance visa requires you to fill out a number of different forms and papers.
What does this mean? You will need to appear for a personal interview at the German embassy in your country. If you are from Australia, Canada, Japan, New Zealand, South Korea, and the United States, you can apply for your freelance visa from within Germany. In this case, you will have the personal interview at the foreigner’s office in Germany. Unfortunately, this is quite a hassle for many. But we try to help. So do get in touch, if you need assistance!
#2 Register your address in Germany
So, let’s see. You want to be a freelancer in Germany. Firstly, you must first find a place to stay in Germany. For example, this could be an apartment, a room, or a sublet. Really, it does not matter where you stya.
However, what does matter, is that you have a written rental contract. Why?
You will have to register your German address at the local registration office. And they require you to have a rental agreement.
So why is this thing called ‘Anmeldung’ (registration) so important?
Simply put, this step is crucial because registration affects your income tax.
What? How so?!
In other words, whatever information you put down on the registration form will influence which tax classification you will get. And this classification in turn will influence the amount of income tax you must pay.
So. An example.
You put down on the form: I am Max, I live on Street x in Berlin on my own.
This will be treated differently from: I am Max, I live on Street x in Berlin with my wife and 2 children.
Single people with no children have to pay more income tax than married people who live with their partners or than single mothers.
Finally, what do we learn from this?
Make sure to fill out this registration form correctly!
#3 Which health insurance is best for freelancers?
If you live and work in Germany, you must have health insurance.
In Germany, there is public health insurance and private health insurance. There are lots of pros and cons for each. Some examples:
When you get public health insurance, your whole family is automatically insured through you.
In contrast, if you’re privately insured, each family member needs to pay their contributions separately.
Consequently, if you don’t have a family, then private insurance is usually cheaper.
Whether a private or a public insurance may be better also depends on your medical history, your age, your income…
Also note that not everyone is eligible to become member of public health insurance.
As such, it is always best to talk to a public AND private health representative. This way they can take your individual situation into account.
#4 Which bank account is the best for freelancers?
In order to follow through with the next couple of steps, you will need to be able to provide a bank account number. This bank account number is needed, for example, by the tax office once you fill in the tax number application form (Fragebogen zur steuerlichen Erfassung).
Obviously, you also need a bank account in order to get paid by your customers. Most bank accounts in Germany charge you monthly bank account fees.
So which is the best bank account for freelancers in Germany?
It depends. If you are just starting off and not earning much money, then you should opt for a free online bank account, such as Number26, DKB or Fido. It’s 100% free and you can do banking on your laptop or mobile phone.
Alternatively, you can also choose an account at a major bank like Deutsche Bank. Here you pay a small fee. In return you get hands-on customer support in DB branches all over Germany. Every branch has an English-speaking representative. Online banking and the service hotline is also in English.
Exciting Update: Number26 now also offers free business accounts. So if you are looking for a free business account in Germany, go for it ! I can really recommend N26 for expats in Germany because it is all in English – the application form, the customer service, the mobile and online banking etc.