Freelance has become an ever-growing self-employment type, as it gives greater independence and less bureaucracy compared to the conventional type. Working as a freelancer, you are your own boss. There is great flexibility as of the days and hours of working. Moreover, you’re free to choose the clients and projects you want to work for. You have almost no working protocols to follow. You may not need an office to make your work happen.
Potentials needed to freelance:
- High sense of technical individuality.
- Innovative thinking.
- Particular education.
- Personal Qualities
- Sense of self-motivation
- Sense of self-responsibility
How does freelancing work in Germany?
Before even thinking to perform a freelance job in Germany, you must understand the legal environment for self-employment here. This because the profession you’ve chosen to pursue, defines your eligibility for becoming a freelancer here. If the profession you’re thinking to exercise here is acknowledged as a liberal professions ‘Freibe Berufe’, you’ll be able to be a freelancer ‘Freiberufle’. Otherwise, if the job is listed as a commercial profession, you’ll only be able to be a businessperson ‘Gewerbe’.
Which are liberal professions in Germany?
The Income Tax Act of Germany (EStG) has a public listing of liberal and commercial professions here. Yet, the ultimate judgment on whether a profession qualifies as a liberal or as a commercial profession lies in the hands of the local tax office ‘Finanzamt’. Liberal ‘freelance’ professions in Germany, according to EStG §18, are self-employment jobs in the following fields:
- Law and business counselling
- Linguistic and information transmitting
Which are the legal requirements for freelancing in Germany?
As a freelancer in Germany, you’ll be excused from the business registration procedure and from getting the trade permit.
Registering with the Tax Office
Instead of the trade office, your freelance activity must be registered with the tax office. The tax office will be the authority to issue the tax number and to collect taxes from you, based on your freelance activity. Registering your business and submitting your tax reports to the Finanzamt can be daunting. As a freelancer, you have other concerns that you need to deal with and an unfamiliar tax system may cause you more to concern. That’s why it is quite a relief to know that you can let tax experts handle all this paperwork for you. Professional tax consultants at Sorted can assist you with preparing all your tax reports, creating invoices and submitting them directly to the tax office.
Why prepare and submit your tax reports as a freelancer with help from certified tax consultants?
- Sorted is a leading Germany-based company with a strong backing of serious investors.
- They cover the entire tax needs for the vast majority of the freelancers and self-employed professionals in Germany.
- Sorted supports you if you have domestic clients or even outside of Germany.
- With Sorted, you register as a freelancer, do your bookkeeping and submit yearly tax reports for free until your revenue meets a certain amount or obtain clients in the EU.
- You can submit your tax reports electronically to the Finanzamt through Sorted. Sorted is connected directly to the Finanzamt through their official software provider, ELSTER.
- For some liberal professions, you must get membership into the respective chambers and for some others the recognition of the foreign qualification beforehand launching your freelance activity.
Can I work as a freelancer if am a foreigner already in Germany?
If you are already residing in Germany, you are entitled to freelance with exceptions. Your situation must be any of the following for working as a freelancer while already in Germany:
- You’re a foreigner working as a researcher or scientists in Germany. You must expect freelancing as a researcher or scientist.
- You’re a foreigner having entered with a German artist visa. You must expect freelancing as an artist.
- You’re a foreigner having entered with a German temporary visa for other purposes. You must meet the criteria to freelance as a foreigner.
- If you’re having difficulties with submitting your tax reports to the Finanzamt, you should seek the assistance of professional tax consultants
Who needs a Germany Freelancer visa?
You’ll need to get a German Freelance Visa beforehand if you’re a visa-regime foreigner, whose intention of coming to Germany to work within a liberal profession.
A freelance visa is typically granted for three months. It can be converted into a residence permit while your visa is valid. The address where you apply for a residence permit is the Local Foreigner’s Authority “Ausländerbehörde or Ausländeramt”.
The residence permit for freelancing can be extended for up to three complete years. To receive such an extension, you must have previously succeeded in your freelance business. This means that you should have evidence of generating sufficient profits to cover living costs for yourself and each of your dependent family members. After 3 years spent with a residence permit for freelancing, you may get a settlement permit. This can happen only if you decide setting up a retail or manual trade business, since then. The residence permit for freelancing can be also converted into a residence permit for self-employment (Residence Act, Section 21/6). This may happen only if you can get the permit to pursue the intended self-employment activity.
Which are the Requirements to Apply for a Freelance Visa?
You must typically submit the application for a freelance visa at the German Embassy or Consulate in the country where you currently live. The procedure is the same as applying for any German visa. You are advised to complete the application 3 months in advance of your planned travel date. Send the application documents as originals with a photocopy of each.
Here are the documents to apply for a German Freelance visa:
- Duly completed national visa application form.
- Valid national passport.
- Two recently made biometric photographs.
- Payment of the visa application fee.
- Travel Insurance.
- Recommendation letters from previous employers.
- Curriculum vitae.
- Cover letter.
- Portfolio of your previous work. Several printed samples of the previous freelance work, or regular work in the same profession.
- Professional authorization. You need to show a license or other authorization to show evidence of your expertise and relevance to pursue the intended profession. This is needed if you’re planning to exercise a profession that requires prior expertise in the field, i.e. Medicine, law, and similar.
- Certificates of earlier education.
- Evidence of a freelance Plan.
- Letters of commitments from future customers/employers. Send at least two of them. These letters must clearly show their intent to employ you when you come here.
- Means of subsistence. Evidence showing you have enough money to cover your living and freelancing costs. This can be one of the following:
- Latest bank statements. From a home-country bank, showing enough available funds.
- Blocked bank account. One of the easiest and the fastest ways to open a German blocked account is through Fintiba/Sutor Bank. The blocked account provided by Fintiba is accepted by German embassies/consulates all around the world.
- Profit/loss statement. It has to show your forecasts about monthly profits and losses from the intended freelance activity.
- Proof of adequate pension plan. Only if you are older than 45.
Germany Freelancer Visa Fees:
The fee to apply for a freelance visa is 60 Euros, for a residence permit is 140 Euros the most, while for a settlement permit is up to 260 Euros
How to start freelancing after arriving in Germany?
After arriving in Germany, you must legalize yourself as a freelancer.
Follow these five key steps before freelancing as a foreigner in Germany:
- Register your living address. You must register in Germany, as soon as you find your permanent accommodation. This procedure is known as ‘Anmeldung’ and is carried through the local Resident’s Registration Office ‘Bürgeramt’. Once this process is completed, you’ll be receiving the confirmation on the living address registration ‘Meldebescheinigung’.
- Open a bank account in a bank in Germany. A good option would be the Kontist account, which offers banking services and invoicing tools for freelancers in Germany. To open an account with Kontist, you need to get the smartphone app or the desktop app.
- Register with Tax Registration Office “Finanzamt”. This is done by submitting the completed Tax Number Registration Form “Fragebogen zur steuerliche Erfassung”. Professional tax consultants such as Sorted can handle all the necessary paperwork on your behalf. Once this process is finished, you will be receiving the Tax ID ‘Steuernummer’. This unique number will be used by you to charge your clients and by the tax office to collect taxes from your freelance operations.
- Get yourself covered by proper health insurance.
- Apply for a Residence permit for freelancing. In the three first months of your arrival, you must make a valid application for a residence permit. The application is done at the Foreigner’s Registration Office ‘Ausländerbehörde’. To apply, you need to provide a completed Application Form for a Residence Permit and required evidence supporting such application. Amongst supporting documents, you need to provide the ‘Meldebescheinigung’, ‘Wohnungsgeberbestätigung’- letter of residence confirmation issued by the landlord of the place you’re living here. This needs to be supplemented by the rental contract.
- Start implementing your freelance plan. You may want to start by contacting the awaiting clients, to inform you about your availability to work.