In Germany, there are two types of self-employed people:
- Freelancers (Freiberufler)
Professionals with special qualifications who sell their services. Their occupation is called a freier Beruf. - Tradespeople (Gewerbetreibende)
All other self-employed people. Their business is called a Gewerbe.
This guide explains the differences between freelancers and tradespeople. You must understand this to start a business or apply for a freelance visa.
Freelancer (Freiberufler)
Freiberufler are self-employed professionals with special qualifications who sell their services.3
This includes self-employed artists, teachers, journalists, translators, therapists, engineers, IT professionals, accountants, architects, lawyers and doctors.7
It excludes actors, artisans, taxi drivers, delivery drivers, and most photographers.11 They are not Freiberufler.
If you sell products, you are rarely a Freiberufler.
Tradesperson (Gewerbetreibender)
If you are self-employed, but not a Freiberufler, you are a tradesperson (Gewerbetreibender). Your business is a trade (Gewerbe).
Websites that are financed by ads or affiliate links are almost always a Gewerbe.10
What is the difference?
A Gewerbetreibender has more obligations than a Freiberufler.
If you register a Gewerbe, you must…
- Get a trade licence (Gewerbeschein)
- Pay the trade tax (Gewerbesteuer)
In Berlin, sole proprietors give an extra 1.05% of their profit for trade tax. – How the trade tax works - Join the IHK and pay the membership fee
In Berlin, if you are a Gewerbetreibender, you automatically join the IHK. You must pay the membership fee. The fee is a few hundred euros per year. – Fee calculator for Berlin - Get listed in the trade register (Handelsregister)
If you are a sole proprietor (Einzelunternehmer), this is rarely required. - Use double entry bookkeeping
If you are a sole proprietor (Einzelunternehmer), this is rarely required.
If you are a Freiberufler, you don’t need to do any of this. It saves you time and money.
Your Freiberufler or Gewerbetreibender status also affects…
- Your residence permit
When you apply for a freelance visa or permanent residence, the required documents for Freiberufler and Gewerbetreibende are different.1 - Applying for permanent residence
Gewerbetreibende can apply for permanent residence after 3 years. Freiberufler must wait 5 years.2 - Getting help
The IHK helps Gewerbetreibende who pay the mandatory membership fee. They do not help Freiberufler.
It does not affect…
- How you charge VAT
- Your Kleinunternehmer status
- Your Künstlersozialkasse membership
Trade licence (Gewerbeschein)
If you are a Gewerbetreibender, you must register your business at the Gewerbeamt. This is called the Gewerbeanmeldung.
This is how you get a trade certificate (Gewerbeschein). Your employer might ask for it. The Ausländerbehörde asks for it when you apply for a freelance visa.
Trade tax (Gewerbesteuer)
If you are a Gewerbetreibender, and your profit is over 24,500€ per year, you must pay the trade tax (Gewerbesteuer). You register for trade tax when you do the Gewerbeanmeldung.
Trade register (Handelsregister)
Some Gewerbe must be listed in the German trade register (Handelsregister). This is a lot of work, and you should avoid it if you can.
Who needs a Handelsregister entry?
You can request an entry in the Handelsregister when you fill the Fragebogen zur steuerlichen Erfassung.
IHK membership
In Berlin, if you are a Gewerbetreibender, you automatically join the IHK. You must pay the membership fee. The fee is a few hundred euros per year.
Double entry bookkeeping
As a Gewerbetreibender, you must use double entry bookkeeping if…6
- your profit is over 80,000€ per year
- or your revenue is over 800,000€ per year
- or you are listed in the trade register (Handelsregister)
Freiberufler don’t need to use double entry bookkeeping.
Double entry bookkeeping is more work for you. You can be exempted from double entry bookkeeping if you prove that it causes your business “undue hardship”.8 If you think this applies to you, ask a tax advisor about it.
How to choose?
You have no choice. The Finanzamt decides what you are when you register your business.9 The Ausländerbehörde uses the same definition as the Finanzamt when you apply for a freelance visa.
If you register as a Freiberufler, but the Finanzamt decides that you are a Gewerbetreibender, they make you pay trade tax retroactively.12 The IHK makes you pay the membership fee retroactively.4
You can be a Freiberufler and a Gewerbetreibender at the same time. You might need 2 tax numbers: one for your Freiberufler activities, one for your Gewerbetreibender activities. You might need to do separate bookkeeping for each activity, and declare both incomes independently.5
If you are mostly in one category, it’s okay if you do a little bit of the other category. It should not affect your status.
If you are not sure, ask for help.
Need help?
Where to ask business questions
Sources and footnotes
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§21 Abs. 4 and 5 AufenthG, Berlin.de, sachsen.de (page 9) ⤴
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This happened to me ⤴
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Sebastian Hoffmann from Touring Artists (November 2024) ⤴
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ihk.de, selbststaendig.de, uber.com, haufe.de, gewerbeanmeldung.de ⤴
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This happened to me ⤴