If you want to move to Germany and start a business, this is what you must do. This guide is based on my own experience.
This guide is for people who do not live in Germany yet. If you already live in Germany, read How to start a business in Germany.
Are you really a freelancer?
Some employers hire "freelancers", but treat them like employees. This way, they don't have to pay social and healthcare. This is called fake self-employment (Scheinselbstständigkeit), and it's illegal1, 2.
What is fake self-employment? — Red Tape Translation
Understand the German system
Language
You don't need to speak German to freelance in Germany, but it helps a lot.
If you don't speak German, it's harder. Most of the bureaucracy is only in German. Most of the information online is in German. Most of the letters you get are in German. You must talk to Bürgeramt, Ausländerbehörde and Finanzamt employees who only speak German. Technical support is only in German.
If you need a freelance visa to freelance in Germany, you must have some clients in Germany1, or you won't get the visa. It's harder to find clients in Germany if you don't speak German.
How to learn German in Berlin ➞
Taxes and cost of living
If you start a business in Germany, you must understand how much things cost, and how much taxes you will pay. Without this, you can't know if your business will work.
How to start a business ➞ Taxes
You will also need savings to get started. If you need a residence permit to freelance in Germany, you can't work before you get the permit. Applying for a freelance visa can take months, and you need enough savings to wait. If you don't have enough savings, apply for the residence permit in your home country, and move to Germany after you get the permit. It's cheaper and safer.
Business registration
When you start a business in Germany, you must register your business in a few places:
- At the Finanzamt
You register your business at the Finanzamt by filling the Fragebogen zur steuerlichen Erfassung. This is how you receive your Steuernummer and your VAT number. - At the Gewerbeamt
If you are a Gewerbetreibende, you must get a trade licence (Gewerbeschein) and pay the trade tax (Gewerbesteuer). More information about the Gewerbesteuer. - With your health insurer
When you become self-employed, you must tell your health insurance. They will take health insurance contributions from your bank account every month.
A tax advisor (Steuerberater) can register the business for you. It's much easier if they help you. Sorted and Firma.de can also do it with you.
How to start a business in Germany ➞
Health insurance
In Germany, you must have health insurance (Krankenversicherung). It's mandatory. Health insurance is more expensive for freelancers, because your employer does not pay 50% of it.
You can choose between private and public health insurance. If you come from a non-EU country, you might be forced to get private health insurance. Public health insurers often refuse to cover freelancers from outside the EU.
If you don't have a residence permit yet, you can also get expat health insurance. It's cheaper and easier to get, but you should switch to a real health insurance as soon as possible.
It's hard to choose the right health insurance. Don't just pick the cheapest one. It's a really bad idea. Get advice from a health insurance broker. Their help is free. They get paid by insurance companies when you sign an insurance contract.
I trust Feather and B-Protected. They helped me write this guide and helped many of my readers find health insurance. Rob from Feather helped me switch to private insurance and save over 400€ per month. I had a difficult case, and he worked for months to get me accepted. Both Feather and B-Protected and have a lot of experience with expats. To compare health insurance prices, you can also use Tarifcheck.
If you already have German health insurance, you must tell your insurance company that you are now self-employed. When you have a job, they take health insurance contributions from your paycheque. When you are self-employed, they take the money from your bank account. If you have public health insurance, your monthly payments are based on your estimated income.
How to choose health insurance ➞
Health insurance for the freelance visa ➞
Liability insurance
83% of Germans have private liability insurance (Haftpflichtversicherung)1. If you cause an accident, and you are sued by the victim, the insurance company will pay for the legal costs and the reparations. This only costs a few euros per month, but it's really worth it.
Private liability insurance does not cover your business activities. For that, you need professional liability insurance. If you cause an accident at work, the insurance company will pay the legal costs and the reparations. Professional liability insurance is more expensive, but it's also worth it.
Professional liability insurance is required in some professions1. Freelance doctors, veterinarians, architects, civil engineers, lawyers, and tax advisors must have liability insurance. For other professions, professional liability insurance is not required.
What does liability insurance cover? ➞
Disability insurance
Disability insurance (Berufsunfähigkeitsversicherung) pays you a salary if you are too sick or injured to do your job. For example, if you are a surgeon and you lose a finger, this insurance can be useful. It can also be useful for office workers, who can burn out.
This insurance is optional, but it's useful if you have dependents or a mortgage. Around 26% of Germans have disability insurance1. It costs around 20€ per month for most professions. It's cheap, because accidents that prevent you from doing your job are rare.
Use Tarifcheck to compare disability insurance options.
Types of insurance in Germany ➞
Legal insurance
Legal insurance (Rechtschutzversicherung) will cover your legal costs if you need a lawyer. For example, if a client refuses to pay you, or if you have problems with another business.
You must get professional legal insurance. Private legal insurance does not cover business activities.
Use Tarifcheck to compare legal insurance options. If you don't speak German, Feather and GetSafe offer legal insurance, and they speak English.
What does legal insurance cover? ➞
Accounting costs
When you are self-employed, you must do your own accounting. You can use tax software, or get help from a tax advisor.
Sorted and LexOffice can help you with invoicing and VAT reporting. Sorted is available in English. It lets you book time with a tax advisor when you need help. Some banks like Kontist, Holvi and Penta can also make your accounting easier. Personally, I use Kontist and LexOffice.
If you don't know what you are doing, you can still make expensive mistakes. If you let a tax advisor take care of everything, they are responsible for their mistakes. They are expensive, but they are worth it. My tax advisor caught many accounting mistakes, and helped me solve many problems with the Finanzamt.
A tax advisor can also help you register your business, make VAT payments, and many other things. I have a tax advisor since 2018, and I really recommend it.
English-speaking tax advisors in Berlin ➞
Sickness pay
If you are an employee, you get sickness pay while you are sick. Your employer pays your full salary for the first 42 days. After 42 days, your health insurance pays you Krankengeld. With TK, you would get 70% of your salary, up to 112.88€ per day2022.
If you are a freelancer, you don't get any money while you are sick. If you want sickness pay (Krankengeld), you must pay a little more each month for your health insurance1. You will only get Krankengeld after 42 days1. There is a limit on how much Krankengeld you receive. With TK, you get up to 112,88€ per day2022, for up to 78 weeks.
You can also get disability insurance (Berufsunfaehigkeitsversicherung). They will pay you if you are too sick or injured to work. Use Tarifcheck to compare disability insurance options.
Build some savings
If you need to apply for the German freelance visa, you need enough savings to last 3-4 months without working. You can't work until you get the visa, and it takes a few months to get it1. You need enough savings to survive until you can start working.
As a freelancer, you will not always have enough work, and your clients will not always pay you on time. Sometimes, they won't pay you at all! You need to have enough savings to feed yourself and pay the rent even during the bad months. When you apply for the freelance visa, you must prove that you have a few thousand euros saved.
Once you start freelancing, you also need to save some of your revenue to pay VAT, income tax, trade tax and health insurance. Kontist bank accounts that do this automatically. It's not perfect, but it works pretty well.
Set your rate
As a freelancer, you don't get paid holidays, your employer does not pay half of your health insurance, and you must save for retirement by yourself. The time you spend managing your business and finding clients is not paid either. This is why you must charge more than regular employees.
The simple rule is to multiply the hourly rate you want by two, and charge that1, 2. This rule varies a lot from industry to industry.
Freelance developer rates in Berlin ➞
Will you bill per hour, per day or per project? Will you send an invoice bi-weekly, monthly, or at the end of the project? Ask freelancers in your field how they do it. Some industries organise meetups and presentations for freelancers.
Find your first clients
If you need a freelance visa to work in Germany, you can't get it without clients in Germany. You must prove that German companies want to use your services. If you can't prove that, you won't get the visa.
This means you must approach German companies and get them to sign letters of intent. This is not a contract, just a letter that says they are interested in hiring you. German companies know about this, and won't mind signing those letters. You need at least two letters of intent for your visa application.
Letters of intent for the freelance visa ➞
It's easier to find clients if you are already in Germany. You can attend meet ups, network and meet potential clients in person. This is why it can be easier to apply for the visa in Germany, and not from abroad.
Apply for the German freelance visa
If you are not a EU or EEA citizen or permanent resident, you need a residence permit to work in Germany.
Do I need a residence permit? ➞
Everyone else needs a visa to work in Germany. If you want to be self-employed, you must apply for a German freelance visa. This takes 1 to 4 months. You can't work until you have that visa. If you already have a Blue Card or a work visa, it might allow you to freelance.
If you come from Australia, Israel, Japan, Canada, South Korea, New Zealand, or the United States, you can stay in Germany for up to 90 days without a visa1, 2. You can come to Germany and apply for a freelance visa there. It's easier to prepare your freelance visa application if you are already in Germany, but you will spend more time in Germany without an income.
If you come from another country, you need a job seeker visa to come to Germany. A tourist visa is not enough. Once you are in Germany, you can apply for the freelance visa. You can also apply for a German freelance visa from your home country.
Getting a visa appointment can take up to 8 weeks in Berlin. You could get the visa immediately at the end of your appointment, or you could receive it 3-4 months later. You will get a temporary visa (Fiktionsbescheinigung) while you wait for the decision. You need enough savings to survive until you get your visa.
How to apply for the German freelance visa ➞
Start your business
How to start a business in Germany ➞
This guide has step-by-step instructions to start a business in Germany, from the business registration to the rules your business website must follow.
Join the Künstlersozialkasse
If you are a freelance artist, publicist or art teacher, you can apply for the Künstlersozialkasse after you get your freelance visa. They will pay half of your health insurance, and half of your public pension insurance. It's a really good deal.
How to apply for the Künstlersozialkasse ➞