How to Establish yourself as a Freelancer in Germany

General
26. September 2022

How to Establish yourself as a Freelancer in Germany

Do you live in Germany, and are thinking of going freelance? Or perhaps, considering moving to Germany and continuing your freelancing there? Confused by the various terms floating around, and what tax and trade offices you have to register with? In this article I want to try and clarify some of the confusion, and recommend some sources geared towards helping those wanting to go freelance in Germany.

Freelancer, Freiberufler, Freier Mitarbeiter

These are terms that get thrown around a lot if you are trying to research how freelancing works in Germany, but the two German terms have very specific definitions that often get mistranslated. Especially English language guides are prone to equating freelancer with Freiberufler, which is best kept in mind when doing further research into the intricacies of becoming a freelancer.

Freiberufler is perhaps the easiest to clarify. The term Freiberufler is a protected term in german law and refers to one practising a Freiberuf (a free/liberal profession). What counts as a Freiberuf is regulated by law: it broadly covers the medical, consulting, planning, technical or artistic fields and is characterised by the provision of services to people and communities. Whether the service you offer qualifies as a Freiberuf is ultimately decided by the tax office when you register with them. For more information on Freiberufe and Freiberufler, you can consult any of these links. The main takeaway here, is that Freiberufler does not describe your employment or relationship with your clients, but only the kind of service that you provide.

Freier Mitarbeiter does however describe your employment status – as someone who is self-employed and has no long-term commitments towards a single employer. The work of a Freier Mitarbeiter is usually characterised by high skill or qualification in the service they offer. As such, this is the closest German equivalent to the term freelancer.

There is an overlap between these two terms though. Someone can be both a Freiberufler and a Freier Mitarbeiter if they offer a service classified as Freiberuf and are self-employed. Or just one and not the other – practising a Freiberuf but not self-employed, or self-employed but do not practise a Freiberuf.

Navigating Bureaucracy

Your next steps are determined by whether your profession is classified as a Freiberuf or not. Being a Freiberufler means you are exempt from some of the steps a “normal” self-employed person has take. Among those is going to the trade office (Gewerbeamt) to register your business and apply for a trade license (Gewerbeschein). As Freiberufler you simply have to go to the tax office (Finanzamt) to request a tax number and fill out a tax collection form (Fragebogen zur steuerlichen Erfassung).

Whether you qualify as a Freiberufler or not, there are many resources available online. Services and guides like these, are designed to provide information and walk you through the forms that need completing.

This covers the purely bureaucratic side of going freelance in Germany, but of course there is much more. If you are not already resident in Germany, you might need a work permit or even a visa to work there. You will also need to register your address, get a bank account, and register for insurance – if you are a Freiberufler the kind of insurance you have to register for may also be predetermined.

There is also the matter of understanding what kind of taxes there are and which ones you have to pay; Freiberufler are exempt from paying trade tax (Gewerbesteuer). Helpfully there are services like Kontist and Sorted designed to aid freelancers with their taxes and financials. This may seem a lot to wrap your head around, but again there are many online resources which cover these steps in depth.

Next Steps

So far I have covered the various things that you need to take care of when becoming a Freelancer. Understanding the legal categories, registering yourself with the relevant authorities, securing work permits and navigating taxes. It all covers the strictly administrative side of the business. But there is the business itself. Becoming a freelancer requires a little more than a skill or a business idea.

The road to becoming a freelancer. Source

You need to analyse the market and find your niche. You also need a business model and plan. For that too there are guides which can help you develop ideas into a more concrete structure. And once you have done all of that? Then you need to actually go out and find projects and clients. Many freelancers nowadays find them via a variety of online portals, like Fiverr, twago, freelancer.de and freelancermap.

To establish yourself in a new country, or entirely uproot your worklife and working relationships as you know them, is scary. But freelancers are the largest growing business sector in Germany, and 60% of them earn better than their traditionally employed colleagues. There are many reasons to go freelance, and many resources to help you understand and navigate the process. I have linked some of these in the text, and will re-link them all in a resources portion. And if you are questioning why you should go freelance in the first place? Feel free to read this.