Five Things You Really Need to Know About
Setting Up a Freelance Business in Germany

The gig economy has transformed the way we work. Today’s workers prefer the freedom to decide when they work, and where, and with whom. Freelancing offers all of these options.

Germany has an ever-growing self-employment economy as well. It is no wonder that many expats want to work as a freelancer here. Germany has it all – vibrant cities, quaint country sides, proximity to many European countries, a stable economy and a large pool of potential clients.

GW Expat How-To Guides > How To Establish a Freelance Business in Germany

Working as a freelancer in Germany gives you the freedom to work when and where you want, but you’ll also need to learn the ins and outs of German bureaucracy. PHOTO: Christin Hume on Unsplash

But be forewarned that freelancing in Germany is no walk in the park, especially in the early days. You will have to navigate through the infamous German bureaucracy while adapting to your life as an expat.

Here is what you need to know before becoming a freelancer in Germany.

1. You Will Deal With Heaps of Bureaucracy

This is one stereotype about Germany that never goes away. That’s because it is true. Any process involving governmental approval requires a pile of paperwork and time. Unfortunately, the initial stages of freelancing in Germany fall into this category.

You will need to coordinate with your local foreigner’s office, health insurance provider, legal and liability insurance, and the local tax authority to set up your freelancing business. Depending on your residency situation, you may also have to deal with city hall (Bürgeramt), your bank, and your landlord in Germany.

2. You Should Start the Visa Process Well in Advance

Visa/Residence Permit approvals can take a long time. The average freelance visa processing time is 3-4 months. But the unexpected can happen. In some cases, the Ausländerbehörde (foreigner’s office) wants to be very thorough. And that takes time. Sometimes visa applications are forwarded to the Institut für Freie Berufe (Institute for Free Professions) for further assessments, or your case worker may go on holiday. My freelance visa approval took nine months. I expected to get it much sooner, as I had already been living and working in Germany for the past few years. So you never know. You may get your work visa on the spot or it may take several months.

3. You Must Be Prepared for Unexpected Expenses

One hard pill to swallow as a freelancer is that you may not always have work lined up. As the saying goes, it is either feast or famine. Therefore, it is wise to save up at least six months of emergency funds before you dive into freelancing in Germany. You should also consider the monthly cost of the health insurance, pension contributions, and tax advisor fees (if you decide to hire one).

Speaking of taxes, freelancers in Germany have to pay in advance. These quarterly income tax payments are estimated from your past tax declaration. They can go up to a few thousand euros and freelancers are expected to pay in quarterly lump sums. Therefore, it is very important to stay ahead of your tax situation and always have some financial buffer in your bank account. Quarterly income tax payments have bankrupted many a freelancer in Germany.

4. You May Find It Hard To Acquire Clients

Language is a major entry barrier for expat freelancers. Limited German skills will only take you so far. Most local businesses conduct their operations in German (obviously!). Freelancers are considered highly skilled professionals in Germany. If you are unable to communicate like a professional subject-matter expert, you will have a hard time convincing any potential German clients.

Sure, there are startups and international companies that operate in English. You will still be competing with your fellow expat and local freelancers for these clients. It may also be challenging to network with local professionals with limited German skills.

Cultural barriers can also impact client acquisition. The selling, persuasion or negotiation skills that worked well for you in your home country may not have the same success rate with German clients. This is something that you can only learn with time. Which brings me to the last point.

5. You Will Need To Be Patient

This is the biggest lesson that I learned from freelancing in Germany. There is a learning curve to this entire venture. One step at a time, you will start understanding the basics of the German tax system, learn how to correctly create invoices, or confidently pitch to potential German clients.

Facing one challenge after another only teaches you to be more patient and prepares you for the next one. So take an anger management course or breath into a paper bag if you need to. It will only be a matter of time before you start reaping the fruits of your labor as a freelancer in Germany.

Are you an expat freelancer in Germany? How would you describe your experience? Let us know in the comments below.

This German Way Expat How-To Guide guest article is by Yamini Gautam. Yamini has been living and working as a freelance marketer in Germany since 2010. She blogs about her expat life at mademoisellein.de.