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Freelancing in Germany is an excellent way to work independently and enjoy easy working hours. Many professionals including writers, designers and consultants pick this path for their own freedom. If you want to know how to become a freelancer in Germany, it is important to understand the process. This includes complying with legal requirements, registering your freelance work and handling related taxes.
Germany has clear rules for freelancers and following them will help you succeed. Whether you are just starting your freelance career or moving to Germany to start kick start it, this blog will tell you how to get started.
Table of Contents
Difference Between ‘Self-Employed’ and ‘Freelancer’ in Germany
In Germany, self-employment and freelancing are two different things even though both mean working independently. Understanding the difference between both of them is important if you want to become a freelancer in Germany.
In Germany, freelancers (Freiberufler) usually work in particular areas such as writing, designing, translating or IT consulting. Freelancers are not required to register a business, which makes the process easier. However, in Germany, they are still required to register with the independent tax office and manage their taxes.
On the other hand, the self-employed people (Gewerbetreibende) running different businesses including shops or commercial services, they must register their business with Gewerbeamt, which is their trade office. They may also have to deal with VAT regulations.
Before you start check where your work fits. This will help you take the right steps to register as freelancer Germany or set up your business properly.
Self-Employment in Germany
Self-employment in Germany include many types of work, from running small shops to managing large businesses. If you are self-employed, you will need to follow a few important steps to get started legally.
1. Register Your Business
The first step is to register your business at the Gewerbeamt (trade office). This process is called Gewerbeanmeldung. You will need to provide details about your business such as its name, address and type of activity. You also need to show proof of qualifications for certain professions.
2. Get a Tax ID
After registering, the tax office will give you a tax ID. This number is essential for managing your taxes and invoicing clients. Make sure to keep it safe and use it for all official business activities.
3. Pay Taxes
As a self-employed person in Germany, you must pay income tax on your earnings. Depending on your work, you also need to charge and pay VAT. Keeping clear financial records will make tax filing much easier.
Starting self-employment in Germany can look like a complex process but following these steps will help you comply with the law and build a successful business.
Freelancer in Germany
Being a freelancer in Germany is simpler than being self-employed. Freelancers also known as Freiberufler, work in different professions like writers, artists, consultants or IT experts. Unlike self-employed individuals, freelancers do not need to register a business but there are still important steps to follow.
1. Register with the Finanzamt
Even though you don’t need to register a business, you must inform the Finanzamt (tax office) about your freelance work. This involves submitting details about your profession and providing any necessary proof of qualifications. Once approved, the tax office will issue you a tax number which you will use for invoices and tax filing.
2. Maintain Records
Freelancers are required to keep proper financial records. This includes saving invoices, receipts, and other documents related to your income and expenses. Good record-keeping helps with accurate tax filing and make sure your compliance with German tax laws.
3. Pay Income Tax
Freelancers in Germany must pay income tax on their earnings. Depending on your income, you may also need to pay other taxes like solidarity surcharge or church tax. Taxes are usually filed annually and some freelancers may need to make advance tax payments during the year.
Becoming a Freelancer in Germany: Securing the Freelance Visa
For EU Citizens
If you are an EU citizen, no visa is needed. You can move to Germany, register your address and start freelancing right away.
For Non-EU Citizens
Non-EU citizens must apply for a German freelancer visa before starting work. The application requires the following.
- Proof of your qualifications and work experience.
- A portfolio showing your skills and past projects.
- Letters of intent from potential clients in Germany, showing they plan to hire you.
- Evidence of financial stability to support yourself in Germany.
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Registering Your Address in Germany as a Freelancer
Before you can begin working as a freelancer in Germany, you must register your address. This process, called Anmeldung is done at the local registration office which is Burgeramt.
For example, if you live in Berlin, you will need to book an appointment at the nearest Burgeramt. Bring the following documents.
- Your passport or national ID.
- A signed rental agreement from your landlord.
- A completed registration form. This is usually provided online or at the Burgeramt.
Once your registration is complete, you will receive a confirmation document called Meldebescheinigung. This document is important for tasks like applying for a freelancer visa for Germany, opening a bank account and dealing with official paperwork.
Freelancer Visa for Germany
The freelancer visa for Germany allows non-EU citizens to live and work independently in the country. It is the first step to building your freelance career. With this visa, you can also apply for a residence permit which gives you legal permission to stay and work in Germany.
Path to Permanent Residency
Freelancers who meet the requirements, such as working consistently, paying taxes on time, and having health insurance might qualify for permanent residency. After three to five years of successful freelancing, you can apply for this status, securing long-term security in Germany.
What are the Requirements for a Freelance Visa?
If you want to apply for a German freelancer visa, you must prepare several documents to show that you can work independently and support yourself. Here is what you will need.
- Detailed business plan: A clear plan explaining the type of freelance work you will do, how you will earn money and your target clients.
- Client contracts or letters of intent: Proof that German clients are interested in hiring you. These letters show your work will be in demand.
- Health insurance: Proof of valid health insurance, either public or private is mandatory for the visa application.
- Proof of financial stability: Bank statements or savings showing you can support yourself in Germany.
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Health Insurance for Freelancers in Germany
Health insurance is essential for all freelancers in Germany. You can choose between two types.
Public Health Insurance
Public insurance is more affordable especially for freelancers starting out. It covers essential medical services and provides stable rates.
Private Health Insurance
Private insurance costs more but provide extra benefits like shorter waiting times and broader coverage. It is a better choice for high earners or those with specific health needs.
Best Bank Account for Freelancers in Germany
Managing finances is important for freelancers. Some great bank options include the following.
- N26: A digital bank with no fees, user-friendly apps and fast transactions.
- Deutsche bank: A traditional bank providing secure, full-service options for freelancers.
Understanding Freelancer Taxes and the System in Germany
As a freelancer in Germany, you will need to understand the country’s tax system. It can seem complicated but following the rules is important for a successful freelance career. There are two main types of taxes you will need to manage.
1. Income Tax
Freelancers in Germany pay income tax on their earnings. The amount of tax you pay depends on how much money you make in a year. Income tax is paid annually and you will submit your tax return by the end of each year. The tax office will calculate how much you owe based on your income.
2. VAT (Mehrwertsteuer)
If your freelance business earns more than €22,000 per year, you will also need to charge VAT (Mehrwertsteuer) on certain services. This is a sales tax and you must collect it from your clients and send it to the tax office. However, if you earn less than €22,000 a year, you can apply for small business status and avoid charging VAT.
It is important to stay on top of your taxes to avoid fines. Make sure you keep track of all income, expenses and invoices.
Getting Your Tax ID in Germany
After you register your address in Germany, you will receive a Tax ID or Steuer-ID, which is necessary for all financial transactions. This number is unique to you and is used for filing taxes, sending invoices and communicating with the tax office. It is very important that you keep this number safe.
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How to Apply for Your Freelancer Tax Number in Germany
As a freelancer, you must apply for a freelancer tax number to manage your taxes properly. Here’s how you can get it.
- Submit a tax registration form: This form tells the Finanzamt (tax office) that you are starting your freelance work. You can find the form online or get it at your local Finanzamt office.
- Provide proof of residence: You will need to show that you live in Germany. This can be a rental agreement or your Meldebescheinigung (address registration document).
- Freelancer visa (if applicable): If you are a non-EU citizen, you will need to show a copy of your freelancer visa. This proves that you are legally allowed to work as a freelancer in Germany.
Once the Finanzamt processes your application, you will receive your tax number. You will use this number for all your tax filings and official documents.
Register Your Business in Germany (Self-Employed Only)
If you are not a freelancer but a self-employed individual running a business in Germany, you must register your business at the Gewerbeamt (trade office). Here’s what you will need to bring.
- Valid ID or Passport: This is proof of your identity.
- Business plan: A plan describing your business, its goals, and how it will make money.
- Proof of qualifications: If your business requires specific qualifications (like a degree or training), bring proof to show you are qualified to run it.
After registering, you will receive a certificate of registration. This is important for tax purposes and for opening a business bank account.
Can I do freelancing in Germany? best way to start a career abroad?
Yes, both EU and non-EU citizens can freelance in Germany. If you are from the EU, you don’t need a visa, and you can start freelancing right away by registering your address in Germany. If you are a non-EU citizen, you will need to apply for a freelance visa to legally work in Germany. The visa allows you to live and work as a freelancer in the country. The application requires proof of your qualifications, a portfolio, letters of intent from clients and financial stability.
How much do freelancers make in Germany?
Freelancer income in Germany can vary greatly depending on your profession and experience. On average, many freelancers earn between €30,000 and €70,000 per year. However, this can change based on the type of work you do, how many clients you have, and your pricing. For example, IT consultants, engineers, and lawyers may earn more than writers or designers. It is important to research the average rates in your industry to get an idea of what you can expect.
Do freelancers pay social security in Germany?
Freelancers in Germany do not automatically pay into the state social security system, like employees do. However, they must arrange their own health insurance. There are two main types of health insurance: public and private. Public health insurance is cheaper, but private health insurance offers better benefits for higher earners. Freelancers can also choose to voluntarily contribute to the German pension system (retirement savings), but it is not mandatory unless you are in certain professions like artists or journalists.
Do freelancers need a VAT number in Germany?
Freelancers in Germany do not always need a VAT number. You only need to get a VAT number if your annual income exceeds €22,000 or if you provide services that require VAT. For example, if you offer consulting services or certain types of design work, you may need to charge VAT to your clients. If your income is less than €22,000 a year, you can apply for the small business status and avoid charging VAT. However, if you are unsure, it is always a good idea to ask the Finanzamt (tax office) or a tax advisor for help.
Do freelancers need to register their business in Germany?
Freelancers do not need to register a business with the Gewerbeamt (trade office), but they do need to register with the Finanzamt (tax office). When you register with the Finanzamt, you will receive a tax number, which you will use for invoicing and tax filings. However, if you are self-employed in a business (not freelancing), you must register your business at the Gewerbeamt and may have additional tax and business responsibilities.
How can I get paid as a freelancer in Germany?
As a freelancer, you will usually get paid via bank transfers or online payment platforms like PayPal. It is common to set up a business bank account, especially if you earn a substantial income or work with multiple clients. Freelancers are also expected to issue invoices to clients. Make sure your invoices follow the proper format and include all required details, such as your tax number, the services you provided, and the payment terms.
Final Thoughts
Becoming a freelancer in Germany is a great way to enjoy flexible work and independence. While the process may seem complex at first, understanding the legal steps, visa requirements and tax responsibilities will help you succeed.
First, make sure you understand whether you need to apply for a freelance visa or if you are eligible to start immediately as an EU citizen. Then, register your address and get your tax number. Freelancers don’t need to register a business, but you must keep records of your earnings and expenses for tax purposes.
Managing your taxes and health insurance is also important. You will need to decide between public or private health insurance and stay on top of income tax and VAT payments if applicable.
With the right preparation, freelancing in Germany can be a great experience giving you the chance to grow in your career and enjoy more freedom.
