Covering permits, tax information and other logistical details, this short guide will get your freelance endeavors in Germany off to a good start.
As all freelancers know, one of the best parts of that kind of work arrangement is that it gives you total freedom to travel while still earning a livelihood. If you’ve been struck by the urge to take your work to Germany, here are some things you should know before you leave.
1. As a freelancer, do I need a visa?
EU passport holders can do freelance work in Germany without restrictions, as can those with a valid residence permit. For others, a freelance visa is probably required, and must be obtained before you enter the country (citizens of Australia, Canada, Japan, South Korea, New Zealand and the USA are exempt from that rule and may apply when they are already in Germany due to international agreements). You’ll need to prepare the necessary paperwork for submission, and once you’ve submitted it, you’ll also need to be interviewed by state officials concerning its contents. If all goes well, you’ll be granted permission to freelance within the country.
2. Where can I base my business?
Freelance work is as flexible in Germany as it is anywhere else; you can choose to work from home, rent a spot in a co-working space, set up a traditional office, or whatever other arrangement works best for you and your particular business’ needs. Once you’ve chosen a location, you must visit the local registration office and fill out the proper paperwork to register this address as a place of business. The amount of tax you have to pay will vary based on what you’ve recorded in that paperwork, so be sure to be very careful and avoid making errors.
3. Do I need health insurance?
Health insurance is not only extremely important for one’s quality of life, but it’s actually illegal to live in Germany and not have any. There are two options to choose from.
Public – This option insures your entire family, regardless of size, for one rate, making it a great option for those with dependents. Premiums are also based on income rather than on health status or lifestyle factors, so it’s good for people with a troubled health record who might have issues getting covered on private plans. The only downside is that it can be an expensive option if you are a young person in good health who could get better rates elsewhere.
Private – This is the option that is usually the most cost-effective for young, single people without catastrophic health problems. Premiums are no longer tied to income levels, and coverage is provided to each person individually, making it cheaper if you were only intending to cover yourself anyway.
4. Where should I open a bank account?
It’s up to you, but you should know that bank fees are very common in traditional brick-and-mortar German banks. No-fee online options are becoming more popular through banks like Fido and DKB; these institutions allow you to handle all your financial affairs remotely, which can be very convenient for people who are tech-savvy and have a good grasp of the German language.
If you’re not confident in your German-speaking abilities just yet, though, going with an established name like Deutsche Bank might be worth paying the extra fees. These banks are used to dealing with international customers, so they tend to have multilingual staff and are likely to be able to help you in English (both in person and on the phone, if you require it).
5. What’s a Tax ID?
The German tax system requires all people working within the country’s borders to use a tax ID (or Identifikationsnummer) when filing their taxes at the end of each year. Everyone who lives in Germany for any period of time gets one, and yours should arrive in the mail a few days after your resident registration is completed. If you’ve lived in Germany before, though, be aware that you will have to file a request with the Bundeszentralamt fuer Steuern (main tax office) to have a new tax ID sent to you.
You can also get your tax ID in person if you need it immediately (or if something goes wrong and you never receive yours the usual way) by bringing your passport and visa information to a nearby tax office. Retrieving your ID is a simply process that shouldn’t take more than an hour or so.
6. What’s the difference between a Tax ID and a Tax Number?
While the tax ID system is for everyone working in any capacity in Germany, the Tax Number is an extra designation for freelancers and the self-employed who file their own taxes. You can apply for it using the Fragebogen zur steuerlichen Erfassung form, which you can either fill out independently or with help from tax office staff.
7. Do I need to register a company?
This depends very much on the nature of your work. Each kind of self-employed enterprise has different requirements for registration. For example, people who work with physical goods (such as bakers, florists, or furniture dealers) usually need to apply for a Gewerbeanmeldung (essentially a business license), while independent professionals like lawyers and doctors do not (although they have their own separate sets of rules to follow). It’s best to consult an expert on German commerce about the exact details of your situation if possible.
8. What’s the best way to get a mobile phone?
A mobile phone is one of the most accessible modern forms of communication, and when you’re in a foreign country, it’s doubly important to have an easy way to contact people. German cell phone plans come in the same contract or pay-as-you-go options that are standard in much of the world. As usual, signing up for a contract is cheaper for heavy users or those who don’t already own their own device, while pay-as-you-go plans are good for those on a budget. You should also make sure to consider whether you’ll be in the country long enough to see the end of the contract before you sign up for any ongoing plans.
Happy travels, and good luck in Germany!