Easier than you'd think: how to register as a freelancer (Freiberufler) in Germany

Freelancing in Germany offers unique opportunities for international professionals. Unlike many countries, Germany has a specific legal category for freelancers (Freiberufler) that comes with attractive tax advantages.

Interested in simpler bookkeeping and exemption from business (trade) tax? Those are some of the key benefits of opting to freelance in Germany.

To start your freelance career, you'll need to work in a profession listed in Germany's official catalog of liberal professions. In this article, discover which professions qualify as Freiberufler:in, how to register as one and what lies in store once you've officially gone solo.

Freelancers are self-employed professionals who work in one of Germany's officially recognized 'liberal professions' - from journalism and consulting to design and IT. Without being tied to a fixed employer, they offer their expertise and services directly to clients or companies. As an international professional, you can leverage a German system that's actually relatively freelancer-friendly.

This way of working offers flexibility regarding working hours and locations, yet it also requires taking responsibility for matters like taxes and social security.

Freelancers are thus responsible for their career progress and ensuring their income.

In conversations about self-employment in Germany, you’ll hear several different words that all mean similar things, but with important nuances. It’s easy to get lost in all the German terminology, so let’s establish which word means what. 

• Selbständige (in English, self-employed) - not a legal term, this is just the most common, conversational way to describe someone who runs a 1-person business by themselves, with no partners. 

• Einzelunternehmer:in (in English, sole proprietor) - this is the state’s official, legal term for a person who runs a 1-person business by themselves, with no partners. There are two types of Einzelunternehmer:in: 

• Freiberufler:in (in English, freelancer) - this is an Einzelunternehmer:in who carries out a so-called ‘liberal profession’, meaning they provide some form of unique, intellectual services rather than sell physical goods/products (see a list of liberal professions here). A Freiberufler:in must declare their activity to the tax office (Finanzamt) but does not need to register a business or pay trade tax. 

• Gewerbetreibende:r (in English, sole trader) - this is, generally speaking, an Einzelunternehmer:in who sells/trades physical goods or who provides services with little intellectual input that don’t fall under the liberal professions. A Gewerbetreibende:r must formally register their business with the local trade office (Gewerbeamt) and pay trade tax (Gewerbesteuer). 

• Kleinunternehmer (in English, small business owner) - this term refers to specific tax status that exempts an Einzelunternehmer:in from charging, processing and paying VAT. Whether you’re a Freiberufler:in or a Gewerbetreibende:r, you can choose to obtain Kleinunternehmer status as long as your revenue was less than €25,000 net in the previous calendar year, and isn’t forecast to exceed €100,000 in the current year. 

So, if you’re a Selbständige, in the eyes of the state you’re an Einzelunternehmer:in in either the Freiberufler:in or Gewerbetreibende:r category, depending on what you do. And, if that’s not enough and your revenues are low, you can also decide to be a Kleinunternehmer.

Registering as a freelancer requires some planning, but at Qonto we've been working hard to make it as simple as possible for you. In fact, in just a few steps, you can be up and running as a freelancer faster than you might think. The process involves some basic legal, financial, and organizational aspects that are essential for a smooth start to your activities.

1. Registering your freelance activity with the German tax office (Finanzamt)
2. Providing proof of qualifications (if required)
3. Obtaining a designated insurance for freelancers
4. Registering with professional associations for freelancers (if required)
5. Opening a business account for freelancers (optional but advised)

The first and perhaps most important step is to register your activity with the tax office (Finanzamt). 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.

This questionnaire for tax registration will ask you to provide information about:

• Your planned activity
• Expected income
• Whether you want to apply for the small business owner status (Kleinunternehmer)

This registration should ideally take place before you start your business activity, to stay on the right side of tax laws.

In certain specialist freelance fields, you must provide university diplomas, certificates, or other evidence to prove your professional qualification and aptitude to carry out your activity.

This is the case if you work in an industry that's legally regulated, for example: 

• Medical healthcare professionals (doctors, dentists, physios, pharmacists, vets...) 
• Legal professionals (lawyers, notaries)
• Financial professionals (tax advisors, accountants)
• Technical specialists (architects, engineers, surveyors)
• Public education professionals (teachers in the public sector)

Less regulated professions (translator, writer, journalist, designer, IT programmer, consultant...) don't require proof of qualification, although potential clients may ask you to provide some.

If you're unsure whether your activity requires proof of qualifications, you should ask your local branch of the Finanzamt. Ensure that you have all relevant documents ready and can present them to the tax office or other institutions if needed.

As a freelancer, you bear the full responsibility for your social security. This includes:

• Health insurance
• Long-term care insurance
• Pension insurance
• Disability insurance

Research your options before choosing the insurance that suits you best. It might be wise to seek individual advice from a professional advisory center (Beratungsstelle) to find the optimal insurance coverage for your specific needs.

Depending on your field of work, you may be required to register with a professional association. These associations are providers of statutory accident insurance and offer protection against workplace accidents and occupational diseases.

Membership is mandatory for some professional groups, and optional for others. The criteria follow closely those of the professions for which you need to provide proof of qualification (see point 2 above). Check whether and which professional association is responsible for your activity, and register if necessary. This provides you with additional protection in the event of a workplace accident.

Although it isn't legally required to maintain a separate business account for your freelance work, it's strongly recommended.

A freelancer account helps you clearly separate business and personal transactions and simplifies your bookkeeping and tax processing.

Many banks offer special business accounts for freelancers tailored to their needs. Compare offers from different banks to find the right account for you.

Still looking for the right account for freelancers? Try Qonto free for 30 days.

While both are categories of Einzelunternehmer:in (sole proprietor), the main difference between a Freiberufler:in (freelancer) and a Gewerbetreibende:r (sole trader/tradesperson) lies in the type of professions practiced and the associated tax treatment.

Freelancers are typically engaged in academic or artistic professions and do not need to register a business, which exempts them from trade tax.

A Gewerbetreibende:r, on the other hand, conducts a commercial activity that goes beyond the scope of 'liberal' freelance professions and must register their business, which entails the payment of trade tax. Additionally, commercial operators are often subject to stricter accounting obligations.

The exact classification depends on the professional activity and legal requirements. There is no definitive and exhaustive list and, ultimately, the final decision will be made by the Finanzamt. But here are some typical examples of freelance professions:

• Doctors 
• Lawyers 
• Tax advisors 
• Architects 
• Engineers 
• Journalists 
• Translators 
• Artists 
• Writers 
• IT consultants 
• Psychologists
• Personal trainers
• Influencers/social media professionals

In principle, almost anyone can become a freelancer, provided the activity falls under the categories legally recognized as freelance. It's also important that you have the necessary qualifications and skills to offer your services.

However, certain conditions must be met, such as registration with the tax office and, depending on the profession, proof of specific licenses or qualifications. Not every profession can be practiced as a freelance activity, and there are clear guidelines that define what constitutes a freelance activity.

You must register a freelance activity with the tax office as soon as you start your self-employed work and before you issue your first invoice. This step is crucial to be correctly recorded for tax purposes and to avoid legal issues.

Registering early ensures that you fulfill all tax obligations from the start and can fully focus on your freelance activity.

As a freelancer, you have numerous financial support options available to secure and expand your activity. From grants to loans to social security, the options are diverse and can be tailored to your needs. Here are some of the most common options:

• Start-up grant from the Federal Employment Agency (Gründungszuschuss der Bundesagentur für Arbeit, link in German): If you are unemployed and starting a business, this grant provides financial support and helps with social security.

• ERP Start-up Loan from KfW (ERP-Gründerkredit der KfW): This low-interest loan makes it easier to finance your business idea and investments to get off to a successful start.

• Start-up allowance (Einstiegsgeld): This benefit from the job center supports the transition from unemployment to self-employment and provides financial assistance in the initial phase.

• Consulting grant (Beratungszuschuss): Use this funding to access professional advice from consultants without straining your budget.

• Artists' Social Security Fund (Künstlersozialkasse): As a visual or performing artist, publicist, or other writing professional, you can get social insurance through this fund and pay only half of the contributions.

• Institute for Freelance Professions (Institut für Freie Berufe): The IFB offers specific information and advice for freelancers to support your professional development.

• Tax allowances (Steuerfreibeträge): Take advantage of legal allowances to reduce your tax burden and make your income more efficient.

• Regional economic funding: You can also find local and regional funding programs that support investments and growth in your industry.

Freelancing offers a high degree of flexibility and independence, but it also comes with challenges such as the need for self-organization and responsibility in financial matters. This work style opens up many opportunities but also demands a lot.

If you do not register as a freelancer, you risk tax consequences and back payments.

In Germany, it's required to register your business or freelance activity with the tax office to correctly tax your income. Failure to register can lead to a tax office audit, resulting in back payments of taxes as well as possible fines and interest.

Furthermore, your legal security could be compromised, as you're not recognized as a self-employed person without official registration. For international professionals, this could also affect visa status. It's crucial to register in a timely manner to avoid legal issues.

As a freelancer, you're required to pay income tax on your earnings, with the tax rate progressively ranging from 0% to 45%, depending on your taxable income.

Freelancers are exempt from the local trade tax (Gewerbesteuer). The exact tax burden depends on various factors, including:

• Total income
• Deductibility of business expenses
• Individual exemptions

It is important to maintain a profit and loss statement to correctly deduct all allowable expenses from your income and thus determine the taxable income. Early planning and advice from a tax consultant can help optimize your tax burden.