The Rise Of Freelancing: Your Ultimate Guide To Becoming A Freelancer In Germany
By | Karen Anthony
The gig economy is multiplying, and it seems as if everyone is jumping on the bandwagon of quitting the 9-5 corporate life. From the flexibility to work anywhere, freelancing allows people to become their bosses and dictate how much and where they want to work.
The number of self-employed people is rising everywhere, and Germany is no exception. Many people are choosing to pursue a day job and work on their own at the same time. According to statistics, in 2020 the number of self-employed people in freelance professions in the country have risen.
If you’re interested in working as a freelancer, or “Freiberuflich” in the country, you’re not alone. There are several benefits to becoming a freelancer in Germany, including the issuance of work, residence permits and lower taxes.
So, if the freelancing life in Germany appeals to you, here’s what you need to do:
Determine whether you’re a freelancer or self-employed
In most countries, both of these terms are used interchangeably. In Germany, however, these categories are treated separately, and you need to determine which one you fall into. To be classified as a freelancer in the country, your self-employment must fall into a specific category, mostly categories with some creative or academic element that could require a degree. These categories are:
- Therapist, dentist, vet, psychologist, doctor
- Journalist, writer, interpreter, translator, teacher
- Lawyer, accountant, tax consultant
- Engineer, architect
- Dancer, designer, actor, musician, photographer, artist
On the other hand, someone who’s self-employed will fall under every other category not covered above. If you’re the owner of a commercial enterprise, you’ll probably be classified as self-employed. Such people are typically involved in trading or building and usually sell physical goods.
As a freelancer, you need to be able to prove that you’re earning your income from multiple sources on a long-term basis, at least over a year. It isn’t recommended to focus all your efforts on a single client.
Eligibility for a visa
Before you come to the country, you need to determine whether you’ll need a visa to work as a freelancer. Different rules apply if you’re visiting on a short-term or living in Germany. If you’re from the EU, you don’t need to apply for a freelance visa.
On the other hand, if you currently live outside the EU, you’ll need special permission to freelance in Germany. This special permission is a freelance visa that declares your interest in freelancing once you arrive in the country, especially if you opt for Berlin as one of the world’s most popular startup hubs and freelance places.
To get approval, you need to provide proof of financial security and demonstrate how your freelance work has the potential to fill a gap in the German economy. A freelance visa Germany-wide is typically granted for three months and is a relatively straightforward process if you have the right guidance.
Get health insurance
The health system in the country is statutory and financed by contributions from the country’s residents. Apart from the public healthcare system, the private system complements it. If you’re working for an employer in the country, the employer covers half of the cost, whereas you cover the other half.
In contrast, as a freelancer, you’ll need to finance the entire cost of your health insurance yourself. You have the option of choosing between private and public health insurance, and each of these has its own pros and cons. You should research which one is better for you since changing between the two may be difficult.
Maintain clear accounts
Regardless of which field you freelance in, you need to maintain clear accounts. You should know how much money is going out and coming in and have an overall view of your financial situation.
You will be required to complete a tax return each year, and you need this information to accurately fill out your taxes. You should be prepared with this information beforehand since the tax office can audit you anytime and demand accurate record-keeping.
Your finance may be complex and, because of this, you should use software to keep track of your expenses and revenues. As long as you’re recording everything, you have nothing to worry about.
Additionally, if you’re doing well, you should consider hiring a tax advisor who can help you determine which expenses are deductible, ensuring you can save money. These tax-deductible expenses include childcare costs, stationery, accountant services, business lunches or dinners, and social security contributions.
Look for clients
A critical aspect of working as a freelancer is finding clients. Luckily, there’s a massive online community where you can get guidance about sending proposals and securing contracts.
If you’re working remotely, you can even work with clients from other countries. You should develop a portfolio to display whenever you’re interacting with potential clients.
To find the best clients for your industry, you need to join online networks where you can connect with companies and people all across the world. These networks can provide you with valuable tips and help you learn about useful tools to grow your business.
Apart from this, you can also look into freelancing platforms, such as Fiverr, Upwork, and People Per Hour (PPH). Each of these websites offers its own specialties, and you should experiment with different ones to determine which one suits you the most.
Freelancers enjoy immense flexibility and freedom due to their work. The lifestyle can prove very liberating since you can determine who you want to work for and what you want to do.
While the choice can initially seem overwhelming, once you have all the different factors figured out, the entire lifestyle will come easy to you. You can always refer to this guide to get a jumpstart on your freelancing journey in Germany and enjoy the perks it offers.