Freelancing in Germany

Freelancing is a popular option for many people who wish to work independently and have more control over their career paths. It is definitely a favourite among the younger population of foreigners moving to Germany, as it allows them to keep working to the best of their skills capacity, with almost no adjustment time in the new country of residence. 

In 2022, there were almost 1,5 million freelancers in Germany, quite the number if you ask us! 

Now there are a few distinctions that must be made before we explain further what it is like being a freelancer in Germany. This is because German law differentiates between freelancing and being self-employed as a tradesperson. The distinction is essential, as both categories follow different requirements for registration and taxation.

As a freelancer (Freiberufler) in Germany, you need to work in a skilled field and provide skilled services to other businesses or people. Common liberal professions (Freie Berufe) of freelancers in Germany are artists, teachers, doctors, engineers, scientists, software developers, designers, lawyers, tax advisors, and other skilled independent professionals as per §18 EStG. 

On the other hand,, any other type of self-employment gets considered a trade business (Gewerbe), and you need to register it as such with the trade office (Gewerbeamt) in your city. 

First things first. As we have seen and been asked many times, is freelancing legal in Germany? Yes, yes it is. As far as you have a freelance work permit, are registered  in Germany (see our article about how to register in Germany here), and fulfil the skills requirements mentioned above. 

What are the formal processes you need to go through to be able to do this?

Depending on your nationality, becoming a freelancer in Germany may be easier or more complicated. First, let’s look at who needs a freelance visa and/or a freelance work permit. Often the freelance work permit gets called the freelance visa. 

A visa for freelance or self-employment only serves the purpose of allowing certain nationalities to enter Germany with the purpose of self-employment or freelancing.

A freelance work permit also called a residence permit for self-employment (Aufenthaltserlaubnis zur freiberuflichen oder selbstständigen Tätigkeit), allows foreigners to remain and live in Germany long-term and make a living as a freelancer or self-employed.

Can you freelance in Germany?

As mentioned, these depend on your nationality. So, if you’re from an EU country, EEA country or a Switzerland resident, you don’t need any of these. All you have to do is move to Germany and register with the tax authorities. 

If you’re from the US, Canada, Australia, New Zealand, Japan, Israel, or the Republic of Korea, you do not need a visa to enter Germany. You can just travel to Germany as a tourist and then apply for a residence permit for self-employment within the first three months of your stay in Germany.

If you are a citizen of any other country, you will need to apply for a visa for self-employment first, and within the first three months in Germany, you will need to change your visa for a residence permit. The German government’s website provides an easy to follow graphic of the process. 

All visa applications need to be done at a German embassy or consulate, and all residence permits in Germany get handled by the immigration office (Ausländerbehörde).

Requirements For A Freelance Visa In Germany

To become a freelancer in Germany, you need to provide proof for the following requirements when it comes to both the freelance visa and the residence permit for self-employment:

• Proof of financial stability to support yourself in Germany. This can be bank statements, but also contracts of future German clients.

• Prospective German clients and an economic need for your services. The German government will only grant a freelance visa or permit to those who can prove that there is a demand for their services in Germany. You will have a hard time getting permission to become a freelancer in Germany when only serving foreign clients. You should provide a letter of intent from German clients ready to hire you once you have the permit or invoices from past German clients you have already worked with from abroad.

• A professional license for certain regulated freelance professions, such as doctors, lawyers, etc. The German government provides the first steps to check whether your qualifications get recognised in Germany. 

• Sufficient pension provisions if you are 45 years or older.

• You will need to have German health insurance already before applying for your visa. 

How to register as a freelancer

Once you are in Germany, you have registered your address and have a residence permit for freelancing, you need to register with the tax authorities (Finanzamt). You do so by filling out a rather complex seven-page form called Fragebogen zur steuerlichen Erfassung. 

During your registration as a freelancer, you will have the option to request a VAT number on the tax questionnaire. Whether or not you need to charge VAT tax (Umsatzsteuer) depends on the type of freelance services you offer and the estimated revenue of the first two years. 

Liberal professions such as doctors, dentists, and nonmedical practitioners do not have to charge and pay VAT. However, most other freelancers will have to deal with VAT tax. 

Especially if you are just starting as a freelancer, it is difficult to predict how much revenue you will generate in the first year. If you earn less than 22.000 euros in the first year and not more than 50.000 euros in the second year, you can opt not to charge and pay VAT tax. In this case, you will qualify as a small business owner (Kleinunternehmer). 

You can, however, opt to charge and pay VAT tax from the start. If you do so, you need to stick to your decision for at least five years. We advise you to speak to a tax consultant about your individual freelance services to make the best decision for yourself. 

When freelancing in Germany, your revenue (reduced by business expenses) gets taxed with the general income tax, which is a progressive tax that ranges between 14 to 42%. Depending on your predictions and profession, the finance authorities will inform you whether you will need to pre-pay your taxes monthly, quarterly, or yearly. To balance your tax pre-payments and actual income at the end of the year, you need to submit a tax declaration within the first six months of the following year.

Looking at it all, there are definitely advantages and disadvantages to being a freelancer in Germany. From being independent and having control over your working hours and the place you’re working from, there is also the part where some landlords might have doubts when it comes to renting their property to you (we’ve seen it happen before), to the insecurity that comes with an unstable income.