Become a freelancer in Germany
Are you ready to turn your dream of working independently into a reality? If so, becoming a freelancer in Germany might be the perfect path for you! However, before you embark on this exciting journey, it’s essential to navigate through some bureaucracy, but rest assured, it’s manageable. The first step is to understand whether you fall under the category of “self-employed” (selbstständig) or a “freelancer” (Freiberufler) because these distinctions have different implications in Germany.
Confused? Don’t worry; we’ve got you covered. In this guide, we’ll walk you through the process of becoming a freelancer in Germany, from understanding the legal distinctions to managing the necessary paperwork.
Understanding the Difference Between ‘Self-Employed’ and ‘Freelancer’ in Germany
Are you considering venturing into the world of self-employment in Germany? It’s essential to grasp the distinction between two significant terms that often get used interchangeably: ‘self-employed’ (Selbstständiger, Gewerbetreibender) and ‘freelancer’ (Freiberufler).
While both terms signify that you’ll be your own boss and not employed by a company, they have distinct implications based on the nature of your work. Freelancers typically engage in ‘brain work,’ requiring specialized academic qualifications, such as teachers, consultants, IT programmers, or lawyers.
On the other hand, if your work falls under activities like being a self-employed estate agent, commercial intermediary, or running a cafe, you would be categorized as ‘self-employed’ (Gewerbetreibender).
Though this distinction might seem confusing at first, don’t worry too much about it initially. The first six steps you need to take are relatively similar for both self-employed and freelancers. However, in the final step, it becomes crucial, as ‘self-employed’ individuals must register at the business registration office (step 8).
If you find yourself uncertain about which category you belong to, you can seek guidance from the tax office during step number 6.
So, whether you aspire to be self-employed or a freelancer, let’s embark on this journey together. Let’s start with step number one! Good luck on your path to becoming your own boss in Germany!
#1 Becoming a Freelancer in Germany: Getting the Freelance Visa
If you dream of working as a freelancer in Germany, there’s a crucial step you need to take – obtaining a residence title that permits you to engage in freelance work. Let’s explore who needs a freelance visa and what the process entails.
〉 EU Citizens: Great news for EU passport holders! You don’t need a visa to work as a freelancer in Germany. As an EU citizen, you have the freedom to pursue self-employed or freelance work in the country without a visa.
〉 Non-EU Citizens: For non-EU citizens, obtaining a freelance visa is a mandatory requirement. This involves completing various forms and paperwork. You will need to attend a personal interview at the German embassy in your home country. However, if you’re from Australia, Canada, Japan, New Zealand, South Korea, or the United States, you have the option to apply for the freelance visa from within Germany. In this case, the interview will be conducted at the foreigner’s office in Germany.
While the process may seem daunting, we’re here to help. If you need assistance or have any questions about the German freelance visa, don’t hesitate to reach out to us.
Embark on your journey to becoming a freelancer in Germany and take the first step towards a fulfilling and independent career!
#2 Registering Your Address in Germany as a Freelancer
Congratulations on your decision to become a freelancer in Germany! Now, before you embark on this exciting journey, you must take care of an essential task – finding a place to stay. It could be an apartment, a room, or a sublet – the choice is yours.
However, what truly matters is that you obtain a written rental contract. Why is this crucial? Well, you need it to register your German address at the local registration office, commonly known as ‘Anmeldung.’
But why is this registration so significant?
The answer lies in its impact on your income tax.
Yes, your registration information plays a vital role in determining your tax classification, which, in turn, affects the amount of income tax you’ll be required to pay.
Here’s a simple example:
If you declare that you are Max, living alone on Street X in Berlin, your tax situation will differ from someone who declares themselves as Max, residing on the same street with a wife and two children.
Different tax classifications apply to single individuals versus married couples or single parents, leading to varying income tax rates.
So, the key takeaway is this: Ensure you fill out the registration form accurately to avoid any tax-related discrepancies.
Ready to proceed with the registration process? You can conveniently fill out the German registration form online.
#3 Choosing the Best Health Insurance for Freelancers in Germany
As a freelancer living and working in Germany, health insurance is a must.
In Germany, you have two main options: public health insurance and private health insurance, each with its own set of pros and cons.
For instance, with public health insurance, your entire family is automatically covered under your policy. In contrast, if you opt for private insurance, each family member needs to pay separate contributions. Thus, private insurance can be more cost-effective for individuals without dependents.
However, the decision between public and private health insurance depends on various factors, such as your medical history, age, and income.
It’s essential to consider that not everyone is eligible to become a member of public health insurance. Therefore, it’s advisable to discuss your specific situation with a public health insurance provider or a knowledgeable advisor to determine the best fit for you.
If you want to explore the various health insurance options available to freelancers in Germany, you can find a comprehensive overview here.
#4 Choosing the Best Bank Account for Freelancers in Germany
As a freelancer in Germany, having a reliable bank account is essential for various financial transactions. You’ll need it to provide your bank account number to the tax office and to receive payments from your clients.
When it comes to selecting the best bank account for freelancers, the choice depends on your individual needs and preferences.
On the other hand, major banks like Deutsche Bank offer accounts with a small fee. However, in return, you benefit from hands-on customer support in their branches all over Germany. These branches have English-speaking representatives, and their online banking and service hotline also provide support in English.
#5 Obtaining your Tax ID in Germany
In Germany, every registered individual receives a personal tax ID (Identifikationsnummer). This essential identification number is crucial for freelancers to proceed with their endeavors.
Typically, you will automatically receive your tax ID via mail about one week after registering your residence. However, if you have been issued a tax ID before or if you need to retrieve it for any reason, there are simple ways to obtain it.
If you have lived in Germany previously, you can easily request your tax ID by filling out a form online. The central tax office (Bundeszentralamt für Steuern) will then send you a letter containing your tax ID.
Alternatively, you can visit your local tax office in person. Simply bring your passport and head to the office during regular hours – no appointment needed. The waiting time is usually short, and an official will assist you promptly by checking the database on the spot to provide your tax ID.
#6 How to apply for your freelancer tax number in Germany
Understanding the difference between a tax identification number and a tax number is crucial for freelancers in Germany.
〉Tax Identification Number: This is an identification number that everyone who registers in Germany receives, also known as Identifikationsnummer or Steuer-ID.
〉 Tax Number: As a self-employed individual or freelancer, you will need a separate tax number, known as Steuernummer, which is used for tax-related matters, including filing tax returns.
To apply for your tax number, start by printing and filling out the tax number application form (Fragebogen zur steuerlichen Erfassung). This standardized form is used throughout Germany. On this guide there’s a thorough explanation on how to fill in this form, if you don’t speak German.
If you are unsure about filling out the form correctly, consider visiting your local tax office (Finanzamt + your city/district) for assistance and to submit the form in person. Alternatively, you can mail the completed form to your nearest tax office if you are confident in your application.
#8 Register your business in Germany (Self-Employed only)
If your freelance work involves opening a local business, working as an affiliate marketer, or becoming an estate agent, then you are classified as a ‘Selbstständiger/Gewerbetreibender’ in Germany, not a freelancer.
In addition to the steps mentioned earlier, you will also need to apply for a ‘Gewerbeanmeldung’, which is an application for a business in Germany. It is important to note that this step is not required for freelancers. Learn how to fill in that application form.
The term ‘business’ in Germany refers to any commercial activity, and it does not necessarily mean having a traditional firm. Even if you operate as a one-person business, you will still need to complete the Gewerbeanmeldung process. If you find this process confusing, we can help you learn how to fill out the application form.
#9 Get a mobile phone plan
Having a German mobile phone number for your business is essential, not only for communication with clients but also for completing bureaucratic forms that often require a mobile phone contact.
You have two options for getting a mobile phone plan:
Our suggestion is to start with a free prepaid SIM card that you can easily order online and have it delivered to your address. Later, if needed, you can transfer this number to a different provider, a process known as ‘Rufnummermitnahme.’ Make sure to inform the new provider that you already have a German number to explore options for number porting.
…but wait, there’s more! Tax declarations for freelancers
As a freelancer or self-employed individual in Germany, you have an additional responsibility – filing tax declarations.
Check out our ‘Tax’ section in our wiki to learn about income tax rates and how to determine what you owe. Thankfully, you can conveniently submit your income tax declaration online at www.elster.de.
So, don’t worry, it’s not as complicated as it may seem. You’re well on your way to pursuing your freelancing, self-employment, or business endeavors in Germany!
Best of luck in your new venture!
