A Step-by-Step Guide on Becoming a Freelancer in Germany

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Nowadays, it seems as if everyone desires an additional source of income. In fact, the industry is rapidly growing due to the wide range of benefits it provides freelancers, including the ability to define their hours, being their own boss, and earning as much as they want. Hence, it’s no secret that the concept appeals to many people, with a 45% increase since 2000 in the EU labor market.

From enjoying flexible schedules to working from anywhere, there are several reasons why Europeans are switching to this profession. Like the rest of the European Union, Germany has also been experiencing an increase in freelancers.

If you’re interested in becoming a freelancer in Germany, then you’ll be glad to know the process isn’t as daunting as you may think. The first step to becoming one is to define whether you’re self-employed or a freelancer. While the former could refer to being an estate agent or opening a cafe, the latter often requires an academic degree, such as IT-programmers, teachers, lawyers, and consultants.

When you know which category you fall under, here’s what you need to:

Step #1: Apply for a freelance visa

To work as a freelancer in the country, you need to have a residence title that allows you to freelance. If you’re an EU citizen, you don’t need a visa to freelance in Germany or be self-employed. On the other hand, if you don’t have an EU-passport, you’ll need to apply for a freelance visa.

The application process also involves an in-person interview at the German embassy in your country. Suppose you belong to New Zealand, Canada, South Korea, USA, Japan, or Australia. In that case, you can apply for the visa from within Germany, where you’ll have the interview at the foreigner’s office.

If you’re applying for a freelance visa Berlin-wide, you need to determine whether your profession falls under the freelancing category. Some of these professions include writing, accounting, and engineering. If your work doesn’t fall under this list, you’ll need to apply for a business visa.

Step #2: Register your address

A residential address is a vital part of being a freelancer in the country. It doesn’t matter whether you’re staying in a house, apartment, or sublet as long as you have a rental agreement. You‘ll need this agreement for when you register your address at the local registration office.

This registration process is essential because it determines how much income tax you’ll pay since whatever information you submit dictates your tax classification. For example, a single person who’s not married will typically pay more tax than someone who’s married or is a single parent.

Step #3: Choose your health insurance

If you’re living and working in the country, you need to register for health insurance. You can opt for private or public health insurance, both of which have their own set of advantages and disadvantages. For instance, with public health insurance, you won’t need to register your family members individually since they’ll be covered too, but that’s not the case with private health insurance.

Typically, it all boils down to whether you’re single, married, or have a family. Private health insurance is usually recommended if you have no dependents. Other factors, such as income, medical history, and age, also impact your decision. Since this is a crucial decision, it’s essential to consult an expert who can guide you based on your individual situation.

Step #4: Get a bank account

A bank account number is required for multiple steps, including for the tax office and getting paid. Banks in Germany usually charge a monthly fee, and you have plenty of options to choose from.

If you’re starting as a freelancer and aren’t currently generating a lot of income, you can opt for an online bank account, like Fido or Number26. These bank accounts are completely free and allow you to perform transactions through your mobile or computer.

Apart from this, you can also consider opening an account at a bank like Deutsche Bank, where you pay a small fee and can receive support in all branches throughout the country. If you’re not familiar with the language, you’ll be glad to know that all branches have English-speaking representatives and online banking and the service hotline are also in English.

Step #5: Get a tax ID

Every person registered in the country will get a personal tax ID number, which you’ll receive shortly after being registered. If you’ve previously been issued a tax ID number, you’ll need to fill out a form and submit it at the central office. You can also go to your local tax office and ask a representative to help you out with your tax details by checking their database.

Step #6: Apply for a tax number

It’s important not to mix up the tax ID and tax number. While everyone who registers gets a tax ID, everyone who has to file a tax return receives a tax number. To apply for one, you need to submit an application. You can also go to a tax office and ask someone to help you out with this and check whether you’ve filled the form correctly or not. If you have, you can submit it there.

Step #7: Get a phone plan

A mobile number isn’t just crucial for your business, but it’s vital for the registration process, too. You can either get a 24-month mobile phone plan if you’re staying in Germany in the long run or a prepaid SIM card, which is available at the supermarket or even online, where you only have to pay when you top it up.

You can get a prepaid SIM instantly by ordering it online, after which you can switch the number to a different provider. You should notify the provider to ensure the costs of importing a number are covered.

Final Thoughts

Working as a freelancer in Germany is an extensive process since it’ll require tax declarations and all the legalities involved with conducting a freelancing business. However, with the right guidance, you can easily be on your way to setting up your business and building your life in the country as a freelancer.