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Self-Employed Work in Germany

Do you want to start a business in Germany or be self-employed? Please note that your country of origin determines if you need a special residence permit for self-employed immigrants. Also, local law distinguishes between self-employed trades (Gewerbetreibende) and liberal professions (Freiberufler).
If you want to work as a self-employed professional in Germany, you have to take various regulations into account.

The liberal professions include such jobs as lawyers and psychologists, freelancing artists and writers. On the other hand, Germany’s trade regulations apply to you if you intend to start a business as a producer of goods, an artisan, etc. The difference between setting up a trade and working as a self-employed professional in Germany influences the legal framework of your new status, the process of registering your business, and even your taxes.

The legal situation for the self-employed, as well as for expats planning to start a business in Germany, is rather complicated. Please consult an expert for Germany’s immigration, business, tax, and labor laws.

The following article should provide you with a first overview of self-employment and starting a business in Germany.

Visas and Residence Permits

Before beginning a new career as a self-employed person or business owner in Germany, you should check whether you need a German residence permit (Aufenthaltserlaubnis) for taking up self-employed work. If you are an EU national, you may move freely within the European Union for the purpose of self-employment. However, there are certain exceptions for expats from the new EU state of Croatia.

If you are a national of a non-EU country, you need a residence/work permit for self-employed foreign residents. If you already live in Germany with a different kind of residence permit (e.g. for employed work or for expat spouses), get in touch with the local immigration office (Ausländerbehörde). They can advise you on changing your residence permit.

If you move to Germany from a non-EU country for self-employed work or to set up a business, you have to apply at the German Embassy for a residence permit. The permit will only be valid for a certain period of time, and the local immigration office is then responsible for renewing it.

Whether a permit is granted in the first place depends on the following criteria:

  • your business plan
  • your qualifications and previous experience
  • your financial investment
  • your company’s impact on employment and vocational training
  • your contribution to the national or regional economy, innovation, and research
  • competition with established businesses

Self-employed immigrants who want to invest a minimum of 250,000€ in Germany, thereby creating at least five new jobs, obtain a residence permit almost automatically. In all other cases, your application will be carefully reviewed.

If you just want to set up a business in Germany, as opposed to moving there and running the company on location, a Schengen visa (without an additional residence permit) might be enough.

Freelancers vs. Businesspeople

In Germany, you count as a self-employed expat if you are:

  • a managing partner or managing director of a company
  • an executive of a joint-stock company (Aktiengesellschaft)
  • an authorized signatory (Prokurist)
  • a majority shareholder of a limited liability company (GmbH)
  • a businessperson who wants to run a trade (Gewerbe), for example, as an artisan, caterer, or producer of goods
  • a member of the so-called "catalogue professions" (Katalogberufe), i.e. traditional liberal professions in Germany 
    • healing professions (doctors, dentists, midwives, etc.)
    • scientific professions (engineers, architects, etc.)
    • linguistic professions (journalists, translators, etc.)
    • legal, tax and business consultants (lawyers, tax advisors, accountants, etc.)
  • an officially recognized freelancer, belonging to a liberal profession due to your activity (so-called "activity professions" or Tätigkeitsberufe) or on a case-to-case basis

Make sure first to have sufficient German language skills to engage in business, to get your professional qualifications recognized in Germany (via ZAB, the Central Office for Foreign Education and Training), and to have the right business experience, as well as some kind of commercial training.

The distinction between freelancers and businesspeople makes a big difference when it comes to registering your business, your membership in professional associations, and paying taxes.

 

We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.