This guide gives you a general roadmap for starting a business in Germany, and particularly in Berlin. It covers everything from the business registration to paying your taxes.

Useful vocabulary

Before you begin, you must understand these terms:

Taxes in Germany

If you are self-employed, these are the taxes you will pay. These are the taxes for sole proprietorships, partnerships. Corporations are taxed differently.

Trade tax

Cost: 0% to 3% of all profits above 24,500€

If you are registered as a Gewerbe, you must pay the trade tax (Gewerbesteuer). This is a tax on all profits above 24,500€. You can credit most of it from your income tax. In Berlin, you pay 1.05% more taxes with the trade tax. In other cities, you pay 0% to 3% more.

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Health insurance

Cost: 180€ to 895€ per month

If you live in Germany, you must have health insurance (Krankenversicherung). If you are self-employed, your health insurance is more expensive, because your employer does not pay half of it. The cost depends on the type of insurance you have. Health insurance is deducted from your income, so it reduces your income tax.

Related guide: Health insurance in Germany

Value Added Tax (VAT)

Cost: 0€

VAT (Umsatzsteuer) costs you nothing. You charge VAT on your invoices, and give that money to the Finanzamt. It's not included in your income. If you charge VAT, you also get a VAT refund for your business expenses.

Income tax

Cost: Up to 35% of your total personal income

As a German resident, you must pay income tax (Einkommensteuer). The income from your business is also taxed.

Useful link: German income tax calculator - Ministry of Finance (in German)

Tax advisor and bookkeeping

Cost: 0€ to 2000€ per year

A tax advisor can help you register your business and file your taxes. They are expensive, but they are worth it. If you want to save money, you can use tax software instead.

Related guides:

Other business expenses

Cost: varies

If you run a business, you can get insurance against disability, lawsuits, mistakes, and other misfortunes. This is optional. You could also need tools, equipment and office space.

Related guides:

Cost of living in Germany

If you are moving to Germany to start your business, you must understand the cost of living. This tells you how much money you must earn.

Related guide: Cost of living in Germany

Step 1: Register your address in Germany (Anmeldung)

In Germany, you must register your address every time you move. This is called the Anmeldung. When you register, you get a tax ID (Steueridentifikationsnummer) and a certificate of registration (Anmeldebestätigung). You will need these to get your visa, and to start your business.

You need the certificate of registration to open a bank account, and you need a bank account to register your business with the Finanzamt. You also need a tax ID to register your business.

Related guides:

In this step, you need:

In this step, you will obtain:

Step 2: Open a bank account

You will need a European bank account when you declare your business to the Finanzamt, and when you start paying taxes. If you don't have a bank account yet, take a look at our overview of German banks.

You do not need a business account; a normal bank account is fine. However, some banks will close your account if you use it for business purposes. I recommend you to have a separate bank account for your business. If the Finanzamt freezes your business bank account, you can still use your personal bank account for food and rent. Banks like Kontist, Holvi and Penta can also make your accounting easier.

Bank accounts in other European countries also work, but they must support SEPA transfers.

In this step, you need:

In this step, you will obtain:

  • A bank account

Step 3: Get the right visa

If you are not a European Union citizen, you need a visa to freelance in Germany.

Some work visas already allow you to freelance. On your residence permit (Aufenthaltstitel), look for a line that says "Selbständige Tätigkeit gestattet" (self-employment allowed). If your residence permit has this line, you can freelance or start a business in Germany. If it doesn't, you must apply for a German freelance visa.

For example, some work visas and Blue Cards also let you work freelance. However, you can't only freelance with those visas; you must keep your main job.

The student visa does not allow you to work freelance. You must go to the Ausländerbehörde and ask them to let you freelance. They will update your visa to let you study and freelance at the same time. Many students have done it.

In this step, you will obtain:

  • A residence permit (Aufenthaltstitel)
  • The permission to be self-employed in Germany

Step 4: Find a tax advisor

Tax advisors are very expensive in Germany, but they will save you a lot of money. They can register your business for you and take care of your tax declarations. They will help you avoid many mistakes with taxes and health insurance.

Related guide: List of English-speaking accountants and tax advisors in Berlin.

Step 5: Know if you are a Freiberufler or a Gewerbetreibender

Later, you will need to register your business with the tax office (Finanzamt). They will decide if you are a freelancer (Freiberufler) or a tradesman (Gewerbetreibender).

The difference is very important. Tradesmen must get a trade licence (Gewerbeschein) and pay a trade tax (Gewerbesteuer). They must also be listed in the trade register (Handelsregister) and follow different accounting rules. You must do these things before registering your business with the Finanzamt.

Life is much easier for Freiberufler, but not every freelancer is a Freiberufler! This title is reserved for specific professions. Engineers, doctors, architects and teachers can be Freiberufler. Common jobs like food delivery driver or tour guide do not qualify as Freiberufler, but as a Gewerbe1, 2.

Related guide: Freiberufler or Gewerbe, what's the difference?

Step 6: Get a trade licence (Gewerbeschein)

If you are a registering a Gewerbe, you must get a trade licence (Gewerbeschein) before visiting the Finanzamt.

In Berlin, you can get your Gewerbeschein from your local Ordnungsamt. You can also do it online. This guide shows you how.

Related guide: What is the Gewerbesteuer?

In this step, you will obtain:

Step 7: Register your business with the Finanzamt

The next step is to declare your business at the Finanzamt. You do this by filling the Fragebogen zur steuerlichen Erfassung. You must submit this form to your local Finanzamt in person or by mail.

This is a long and complicated form. Your tax advisor can fill it for you. Services like Firma.de can also do it for you.

In this step, you need:

In this step, you will obtain:

Step 8: Inform your health insurance company

If you already have health insurance, you must tell your insurance company that you are going freelance. Health insurance for freelancers is more expensive, since your employer is not paying half of it. The money will be taken directly from your bank account every month.

If you have public health insurance, the cost of your insurance depends on your income. Since you don't know your future income, you will give an estimation. If you pay too much insurance, you will get a refund later. If you don't pay enough, you will get an invoice later.

If you are self-employed, private health insurance could make more sense. You could save hundreds of euros every month. Talk to a health insurance broker about it.

Related guide: Health insurance in Germany

Step 9: Update your website

If you have a website, make sure it complies with the various German and European regulations. There are stories of website owners receiving damage claims because they had a missing Impressum or incorrectly attributed photos. It happened to me.

Related guide: Running a website in Germany: everything you must know

Need help?

These resources offer information, advice and counselling for business owners and freelancers in Germany. They are here to answer your tough questions and put you on the right path.

Official resources

Local chamber of commerce websites:

Business, startup and freelancing communities

English-speaking professionals