Below is a rough outline of what you need to do to become a freelancer in Germany. This guide was compiled from my own experience as a Canadian freelancing in Germany.

Understand the German system

Language

You can freelance in Germany even if you don't speak German, but it's more difficult.

Most of the paperwork is in German. Most of the information online is in German. Most of the letters you receive will be in German. You must deal with Bürgeramt, Ausländerbehörde and Finanzamt employees who only speak German. Technical support will be in German. If you don't speak German, life is more stressful, and you need more help.

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 can be hard to find clients in Germany if you don't speak German.

Related guides: List of English-speaking relocation consultants, lawyers, tax advisors and doctors in Germany.

Taxes

If you start a business in Germany, you must understand what taxes you will pay. If you don't understand taxes, you can't know if your business will work. You can find a tax advisor to help you with this.

Related guide: How to start a business in Germany - Taxes

Business registration

When you start a business in Germany, you need to register your business in a few places:

A tax advisor (Steuerberater) can register the business for you. It's much easier when they do it for you.

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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 with no history in Germany.

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. Normally, 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.

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    Liability insurance

    Most Germans have private liability insurance (Haftpflichtversicherung). If they cause an accident and they are sued by the victim, the insurance company will pay 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. As a freelancer, 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.

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      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 suffer from burn out.

      This insurance is optional, but it's useful if you have dependents or a mortgage. 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.

      Related guide: Types of insurance in Germany

      Legal insurance (Rechtschutzversicherung) will cover your legal costs if you need to sue someone, or if you get sued. This is not necessary for most businesses. Use Tarifcheck to compare different legal insurance options.

      Accounting costs

      Accountants in Germany are expensive, but they are worth the money. During your first years as a freelancer, you will need the help of a tax advisor to handle VAT payments, tax declarations and other financial matters. A tax advisor can also help you register your business with the Finanzamt.

      Accounting for freelancers is not that complicated. You can do most of it yourself and save a lot of money. I use Debitoor to write my invoices, log my expenses, calculate my VAT payments and prepare my profit and loss statements.

      Related guide: List of English-speaking accountants and 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 110€ per day2020.

      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 110€ per day2020, 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.

      Once you start freelancing, you also need to set money aside for VAT payments, income tax, trade tax and health insurance.

      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 rule of thumb is to take your desired hourly rate, and multiply it by two1, 2. This rule varies a lot between different industries.

      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.

      Related guide: How much should a freelance developer charge in Berlin?

      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.

      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's easier to apply for the visa from Germany, and not from abroad.

      Related guide: Letters of intent for the German freelance visa

      Apply for the German freelance visa

      Once you have found a few potential clients and planned your move, it's time to apply for the German freelance visa. Getting the visa takes 1 and 4 months. You can't freelance in Germany until you have your freelance visa.

      You can apply for the German freelance visa in Germany, or at the German consulate in your home country. If you can enter Germany without a visa, it's easier to apply in Germany. If you can't, you need a National Visa like the job seeker visa to enter Germany. That takes more work, so it might be easier to apply from your home country.

      Getting a visa appointment can take up to 8 weeks in Berlin. You might get the visa immediately at the end of your appointment, or you might receive it 3-4 months later. You need enough savings to survive until you can start working.

      Related guide: How to apply for the German freelance visa

      Useful resources

      If you are moving to Germany to freelance, the "Working and Living in Germany" hotline can answer your visa questions. It's an official hotline. It offers help in English and in German.

      Useful websites

      • Existenzgründer.de - an official resource for startups and freelancers in Germany. The German website has a lot of very detailed articles. This should be your starting point.
      • Firma.de - Service that registers a company for you

      Useful communities

      Useful contacts