Become a Freelancer in Germany
9 Easy Steps
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.
Privat or public health insurance? What is the better option? Find an overview of different health insurance options here.
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.
#5 Every Freelancer needs a tax ID in Germany…
Everyone who is registered in Germany gets a personal tax ID (Identifikationsnummer).
To follow through with step number 6, you need to have your tax ID. You automatically receive this ID in a letter about one week after registering your residence.
You do not get this letter, if you have been issued a tax ID before.
If you have lived in Germany before, you can fill out this form. Afterwards you will get the central tax office (Bundeszentralamt fuer Steuern) to send you a letter with your tax ID.
Alternatively, just go to your local tax office. Take your passport with you. You don’t need an appointment, just go during office times. Waiting time should be under one hour. Once you’re called out, an official can let you know your tax ID by checking the database right on the spot.
#6 How to apply for your Freelancer Tax Number in Germany
Be careful! A tax identification number is not the same as a tax number. Rather, these are two different things!
〉 Tax identification number – everyone who registers in Germany gets a tax identification number. In German, this number is referred to as your Identifikationsnummer. Sometimes people call it Steuer-ID or Steueridentifikationsnummer.
〉 Tax number – not everyone gets a tax number. For example, self-employed people and freelancers get a tax number. People who file a tax return have a tax number. In German you call this a Steuernummer.
So how do I get a tax number in Germany then?
There is an application form for your tax number: The first step is to print and fill in the tax number application form (Fragebogen zur steuerlichen Erfassung). The form is the same all over Germany. On this guide there’s a thorough explanation on how to fill in this form, if you don’t speak German.
If you’re still not sure whether all your data is entered correctly, you are best advised to take the form to your nearest tax office (google ‘Finanzamt + your city / district’).
There you can ask for assistance and also hand the form in. If you don’t need assistance, just send the completed form to your nearest tax office in a letter.
#8 Register your business in Germany (self-employed only)
If you want to open a local business or work as a affiliate marketer or estate agent, for example, then this is not considered a freelancer job, but is instead called a ‘Selbstständiger/ Gewerbetreibender’.
For this, you have to do the above-mentioned steps and in addition you also have to apply for a so-called Gewerbeanmeldung.
What is this?! It is an application for a business in Germany. Freelancers DO NOT have to do this.
Also, don’t be confused by the term ‘business’.
A ‘business’ is a German term used to refer to any commercial activity. It does not always refer to an actual firm. For example, if you do a one-man job, then you’re called a ‘business’ in Germany. Still confused? Learn how to fill in that application form.
#9 Get a mobile phone plan!
You need a German mobile phone number for your business? Of course you do. This is important not only for your clients. On most bureaucratic forms you are required to provide a mobile phone number.
You have two options to get a mobile phone plan.
1. If you intend to remain in Germany for a long time, you should consider a 24 months plan. These usually come with a free new smartphone.
2. You can simply buy a prepaid SIM card – online, or in a local supermarket. If it’s prepaid, you only pay when you put money on it. You can top it up in local shops or online.
What we suggest: Get a free prepaid SIM card first. You can simply order one online. For free. It gets delivered to your address right away.
Later on you can transfer this number to a different provider. This is called Rufnummermitnahme.
It is important that you tell the new provider right away that you already have a German number. They will usually cover the costs of importing that number.
…Are we really done? What about tax declarations for freelancers?
We are not quite done yet…
As a freelancer and a self-employed person in Germany, you’re obliged to do tax declarations.
Check out our ‘Tax” section in our wiki, and find out how much income tax you have to pay. You can submit your income tax declaration online. The website for German online tax declarations is: www.elster.de.
See, it wasn’t that difficult after all…
Best of luck with your freelancing, self-employed activities or business in Germany!
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