Freiberufler or Gewerbe? Understanding self-employment in Germany

In Germany, when registering for self-employment, you first need to determine whether your work qualifies you as a freelancer (Freiberufler) or a sole trader (Gewerbetreibende:r).

The distinction matters: the classification has direct implications for taxes, bookkeeping, and registrations. In this guide, we explain the difference between a freelancer and a sole trader, which rules apply to each, and what you need to do to register your activity.

Freelancers and sole traders are two distinct categories of 'solopreneur', or one-person business, (Einzelunternehmer:in) working in Germany. The key difference between them is the nature of the activity and how the law classifies it.

In Germany, freelancing (Freier Beruf - literally “free profession”) typically involves independent, knowledge‑based services in the public‑interest or commercial domain.

Freelance indicators include:

• You provide unique, knowledge‑based or intellectual services to clients.
• Your activity relies on specific academic qualifications (e.g., relevant degree, state license, or equivalent expertise).
• You exercise independent professional judgment (e.g., creative, scientific, advisory).
• You act independently, on your own professional responsibility.

Examples of professions often recognized as freelance include (non‑exhaustive, and subject to Finanzamt confirmation):

• Medical/health professions: doctors, dentists, psychotherapists/psychologists, physiotherapists, midwives, naturopaths (note that pharmacists typically operate a trade - a pharmacy - rather than a 'liberal' profession).
• Legal/economic professions: lawyers, tax advisors, auditors
• Scientific/technical professions: architects, IT workers, engineers, certain scientists (depending on activity)
• Art and culture professions: writers, copywriters, translators, graphic designers, painters, musicians, actors
• Teaching/consulting professions: lecturers, teachers, certain consultants

Trades cover self-employment that is not classified as a freelance profession. There’s no positive list for trades; most commercial activities fall under Gewerbe unless recognized as freelance.

Typical trade areas include:

• Manufacturing
• Wholesale and retail (including e‑commerce)
• Gastronomy and hospitality
• Sales agencies/representatives
• Crafts
• Financial intermediation

In terms of the registration process, as well as tax and financial record-keeping, sole traders have more administrative hoops to jump through than their freelance counterparts.

Taxes and registration

• Freelancers only need to register with the tax office (Finanzamt) and don’t pay trade tax (Gewerbesteuer).
• Sole traders are generally subject to trade tax and must register their business with both the Finanzamt and the local trade office (Gewerbeamt).

Bookkeeping

• Freelancers can generally use simplified cash accounting (EÜR) when they submit their financial records to German authorities.
• Sole traders can use EÜR unless they (a) exceed the AO §141 thresholds (profit over €80,000/year or revenue over €800,000/year) or (b) are merchants under the HGB (e.g., corporations), in which case double‑entry bookkeeping applies.

Registering your activity as a Freiberufler involves fewer procedural steps than registering as a Gewerbe. Here’s how it works for each in practice.

The process to register as a freelancer is with the tax office (Finanzamt), not the trade office.

Registering is relatively simple and can be boiled down to 3 steps:

1) Confirm your status Establish that your activity qualifies as a liberal profession under §18 EStG (catalog or similar professions). If in doubt, describe your activity to your local Finanzamt (and/or a Steuerberater) and request written confirmation of your classification.

2) File your tax registration Complete and submit the “Fragebogen zur steuerlichen Erfassung” electronically using Qonto’s bilingual, step‑by‑step flow, or via ELSTER - both deliver the same filing to your local Finanzamt. You’ll provide basics such as personal details, bank account, start date, and expected turnover/profit. When you fill in the questionnaire, you’ll also be asked whether you want to charge VAT. If you qualify for the small‑business rule (Kleinunternehmerregelung), you can choose not to add VAT to your invoices. As of 2025, you generally qualify in your first year if your expected revenue for the year does not exceed €25,000. If you intend to charge VAT - or if you plan to work cross‑border in the EU - request a VAT number during registration.

3) Receive your tax numbers After review, the Finanzamt will issue your business tax ID (Steuernummer). This typically takes around 4 to 8 weeks (but timelines vary). If you requested a VAT number, you’ll receive that as well (sometimes separately). Include your Steuernummer (and VAT number, if applicable) on invoices.

Important: Freelancers don’t complete a trade registration (Gewerbeanmeldung) and don't need to enter the commercial register (Handelsregister).

You can find more details about freelance tax registration in this separate article.

If your activity isn’t classified as a freelance profession, you’ll register your activity as a sole trader with the local trade office (Gewerbeamt). The process requires more steps than for a Freiberufler.

1. Select your status

   Establish that your activity does not fall into the category of freelance professions.

2. Apply for a trade permit (if required)
   You need a specific permit or licence to practice certain trades. Check the full list of trades that require this here (link in German), or ask at your local trade office (Gewerbeamt). Note that craftspeople have their own list of crafts that require a licence (link in German), and should contact their local chamber of skilled trades (Handwerkskammer) for more information.

3. Prepare your documents
   As well as any necessary trade permits, you will need documents including a valid ID (passport), a valid visa or residence permit, and your registration certificate (Meldebescheinigung) for proof of address.

1. Register your business at the Gewerbeamt

   Take your documents and file a trade registration request (Gewerbeanmeldung) with your local trade office (Gewerbeamt). This can often be done online. You will need to pay a registration fee that usually costs between €20-60, depending on the town or city.

2. Wait for confirmation

   If your application is approved, you’ll receive a Gewerbeschein as proof of your trade registration. 

3. Register with the Finanzamt

   Once it's processed your application, the Gewerbeamt will automatically notify the tax office (Finanzamt), who'll contact you to ask you to complete a tax registration form (Fragebogen zur steuerlichen Erfassung). You can do this for free via Qonto's online form, which comes with step-by-step explanations, all in plain English. Alternatively, you can complete the form in German via the online tax office, ELSTER, or download the form and send a paper copy. 

4. Wait for your business tax ID

   Between 4 and 8 weeks after it approves your application, the Finanzamt will send you a business tax ID (Steuernummer) that you'll need to include on invoices when you bill your clients. 

5. Register with required trade bodies

   After trade registration, ensure you’re registered with the required bodies. Sole traders are generally members of the Chamber of Industry and Commerce (IHK) or, for crafts, the Chamber of Crafts (HWK). You must also register your business with the competent statutory accident insurance fund (Berufsgenossenschaft) promptly after founding (typically within one week).

Yes! You can be both a Freiberufler and a Gewerbe as long as you keep the two activities strictly separate in the eyes of the authorities and in your daily operations. 

If you engage in both a freelance activity (e.g., copywriting/consulting) and a trade (e.g., online retail), make sure the following are in place:

• Separate registrations
  • Inform your local tax office (Finanzamt) about both activities.
  • Register the trade via a Gewerbeanmeldung with the local Gewerbeamt. Freelance work does not require a Gewerbeanmeldung.
• Separate bookkeeping and documentation
• Maintain distinct records for each activity. Freelance and trade activities can each apply simplified cash accounting (EÜR) if eligible; merchants under the HGB or those exceeding AO §141 thresholds (profit over €80,000/year or revenue over €800,000/year) must keep double‑entry books for the trade.

• Separate invoicing and commercial flows

• Use distinct invoice number sequences and describe services/products so the activity is unambiguous.
• Strongly recommended: separate bank accounts or sub‑accounts to avoid commingling of funds.
• Separate tax reporting
  • Report freelance income and trade income separately.
  • File a Gewerbesteuererklärung for the trade.
  • VAT note: for VAT purposes, you are one taxable person - turnover from both activities gets aggregated (e.g., for the Kleinunternehmerregelung threshold and for Umsatzsteuervoranmeldung).

Ultimately, the Finanzamt will decide whether you're a freelancer or a sole trader, based on the activity you do. If you're looking to become self-employed but don't have a definitive idea of your business idea, you can weigh up the advantages of being a Freiberufler or a Gewerbe.

Generally speaking, freelancing requires less admin - during registration and in the day-to-day running of the activity. Being a sole trader is more demanding administratively but arguably more rewarding in terms of growth opportunities.  

• No Gewerbeanmeldung,
• No Gewerbesteuer,
• Simplified bookkeeping (EÜR in most cases),
• Fewer administrative overheads,
• No need for IHK/HWK membership (though some freelance professions have their own professional chambers).

• Greater entrepreneurial flexibility,
• Not restricted to specific professions,
• Ability to trade in physical products,
• Broader scaling options across commercial fields.