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" to avoid paying social and healthcare contributions for their employees. This is called Scheinselbstständigkeit, or "fake self-employment", and it's illegal1, 2. This article about Scheinselbstständigkeit explains how it works.

Understand the German system

Language

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

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.

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Taxes and cost of living

If you start a business in Germany, you must understand how much things cost, and which taxes you must pay. Without this, you can't know if your business will work. A tax advisor can help.

If you need a residence permit to freelance in Germany, you can't work before you get the permit. This can take months, and you need to have enough savings. If you don't have enough savings, apply from your home country and move to Germany after you get the permit.

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Business registration

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

A tax advisor (Steuerberater) can register the business for you. It's much easier if they help.

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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. 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.

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    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. 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 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.

      Related guide: Types of insurance in Germany

      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.

      Related guide: What is legal insurance, and is it worth it?

      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, LexOffice and Debitoor 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.

      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 a problem with the Finanzamt.

      A tax advisor can also help you register your business, make VAT payments, and many other things.

      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

      If you are not a EU or EEA citizen, you need a visa to work in Germany. You can just move in, and start working.

      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.

      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.

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      Need help?

      Where to find help ➞ Immigration questions