How to freelance in Germany

Have you ever dreamed of quitting your job and becoming your own boss? You’re not alone. In 2021, almost 1,5 million people registered as freelancers in Germany, nearly three times as many as in 1992. You may be one of the people that got affected by the recent wave of layoffs in the tech sector. Or you may be participating in the quiet quitting movement while contemplating your next big move in your career. Whatever the reason you're considering freelancing, if you live in Germany, there are a few things you need to know.

The basics: freelance vs small business owner

Photo by Andrew Neel

In Germany, there's a difference between being a freelancer (Freiberufler) and a business owner (Gewerbebetreibende). 

Freiberufler are usually what you think of when you imagine freelancers: they work in so-called Katalogberufe, which translated to “catalog jobs” and includes everything from scientific, writing, arts and teaching professions. You can find a full list of these jobs here.

Gewerbebetreibende are business owners. If your job doesn’t fall under the catalog job definition, this label applies to you. The most well-known examples are bar and restaurant owners, as well as real estate agents. 

We’ll be focusing on freelancers for this article. 

Get your visa sorted out

Not all passports are the same. If you're not German or from the European Union, Iceland, Norway, Switzerland or Lichtenstein, you'll need a visa to work as a freelancer. Those coming from Australia, Israel, Japan, Canada, South Korea, New Zealand, the United States and the United Kingdom can stay in Germany for up to 90 days and apply for a visa once they’ve arrived. For those coming from other countries, it's not possible to enter Germany without a visa. In that case, there are two options: 

• apply for a freelance visa at the German embassy in your country;
• apply for a job seeker's visa, valid for six months, at the German embassy in your country. You'll then be able to enter Germany, look for clients, and then apply for a freelance visa.

If it's your first time in Germany, remember you'll also need to register your address (Anmeldung) at your local office, the Bürgeramt. The process is slightly different from city to city, but you can find some relevant information here.  

Health insurance

Having health insurance is mandatory for anyone living in Germany, and if you’re self-employed, you have to pay for it yourself. There are two types of health insurance, public and private, and the choice depends on many factors. As an employed person in Germany, the employer will pay half your health insurance. As a freelancer, you'll have to take care of it and pay it entirely by yourself. Remember to communicate it to your insurance provider if you're switching from being employed to freelancing. 

The three most popular public health insurance companies in Germany are TK (Techniker Krankenkasse), AOK and Barmer GEK, but there are many others. Whoever you choose will issue you an insurance card (Gesundheitskarte) with a chip you'll have to present at every medical visit. As for private companies, there is a multitude to choose from, and the various plans vary in price and coverage. If you're an artist or a publisher, you can apply for the Künstlersozialkasse (KSK), where half of the contributions to your health insurance will be paid directly by them, even as freelancer. 

Open a business bank account

As a freelancer, you'll need an account that allows you to exclusively receive payments from your clients, mainly for accounting and tax purposes. Vivid allows you to combine your private and business account in one app. In your Vivid Business account, you'll have up to 15 Business Pockets, each with its own German IBAN you can use to manage everything from incoming payments to taxes. By combining your business and private account, you can move funds from your business account to your personal account without waiting for regular bank transfer times. In addition, business account holders receive an exclusive platinum black VISA card, 4% cashback on every card payment and up to 10% cashback on brands popular with freelancers such as Fiverr Business and HP. If you have international customers, you also get access to more than 100 currencies for currency exchange, plus free and unlimited SEPA transfers and direct debits. All at zero cost. Not bad, right?

Look for clients

Ok, now it's time to find some work. There are plenty of platforms on the web where you can find freelance work; the most common ones are Fiverr and Upwork. According to the job type, there are helpful Facebook groups or specific websites dedicated to it. Just apply to jobs that reflect your skills, have an up-to-date portfolio and CV and try to present yourself in the best possible way to stand out from the competition. 

If you're planning to apply for a freelance visa, it's extremely important to prove that you already have clients in Germany. Don't worry; all you need are letters of intent from companies you have worked with or that you're planning to work with and who can confirm their willingness to hire you. Receipts from past services on your part will also do the job. If, on the other hand, you have yet to get clients, you can use the time between your arrival in the country and the 90 or 180 days available to you. Finding potential clients to work with is much easier once you're in Germany. Also, remember: if you're a visa owner, you must have at least two clients based in Germany, or you'll risk losing it.    

Get your residence permit

If you’re freelancing on a visa, you'll have to prove that you can finance yourself both in your career and personal life. At an appointment with the Ausländerbehörde, you'll have to present your bank statements (preferably from a German bank) and a financial plan that clarifies how much you expect to earn and how much you expect to spend in the coming year. 

Other documents you need include recommendation letters from your previous clients —if you can, get them signed— and proof of education. Bring your portfolio with you or add your professional permit to the folder if your profession requires it.

If you've already corresponded with prospective clients and have signed contracts, submit them to prove your future earnings. If you're above 45, you'll also have to bring a pension plan with you.

Register as freelancer

Once you have your registered address and residence permit, it's time to register as a freelancer with the local tax authorities, the Finanzamt. The process is straightforward, but you'll need to fill out a rather complicated seven-page form called Fragebogen zur steuerlichen Erfassung. It's a questionnaire for your tax registration, and it's only available in German. You'll need your personal ID, your Tax ID (Identifikationsnummer), your bank account details, details of your planned freelance activities, any required qualifications, licenses or memberships and estimated revenue and expenses for at least the first year. 

You'll have to decide if you want to register for VAT. Some categories, such as doctors, are exempt, but most freelancers will have to pay it. 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'll qualify as a small entrepreneur (Kleinunternehmer). You can, however, decide to charge and pay VAT tax from the start. If so, you must stick to your decision for at least five years. 

You can visit the tax office in person, but you should travel with an interpreter if you don't feel confident with your German skills. Some companies offer to guide you through filling out the questionnaire, all in English. They even submit it to the tax authorities. 

If you meet all the requirements, you'll be officially registered as Freiberufler (freelancer) and finally receive your Freiberufler tax number (Steuernummer). You made it!

Becoming a freelancer in Germany isn’t easy, especially compared to other countries. But once you’ve gotten the hard part out of the way, you can focus on the actual work. Your Vivid Business account will help you stay on top of your finances, and in time, will do much more. The rest is up to you — you’re the boss now!