How to register as a freelancer in Germany

Most guides to registering as a freelancer in Germany are written by people who grew up with the system. They skip the parts that are obvious to them and confusing to everyone else. This is the version I wish my clients had found first.

This post explains how the process works. It is not tax or legal advice. For your specific situation, a tax advisor (Steuerberater) is the right person to ask.

The two decisions that come first

Before any form, two things need to be settled, because everything downstream depends on them.

Are you a Freiberufler or a Gewerbe? German law splits the self-employed into two groups. Liberal professions, roughly: writers, translators, designers in some cases, doctors, lawyers, engineers, teachers, consultants in some cases, are Freiberufler. Everyone else runs a Gewerbe, a trade.

The difference matters. A Gewerbe means registering with the Gewerbeamt, paying trade tax above a threshold, and joining the chamber of commerce. A Freiberufler skips all three. The classification is not your choice. It follows from what you actually do, and the tax office decides.

Will you charge VAT? If your turnover is small, the Kleinunternehmerregelung lets you skip charging VAT. That sounds attractive and often is, especially if your clients are private individuals. But it also means you cannot reclaim VAT on your own purchases, and some business clients read it as a signal that you are very small. [Add the current turnover thresholds here when you write this out, and check them against the year in question.]

The sequence

1. Settle the classification. If you are unsure, write down exactly what you will sell, in one paragraph. That paragraph is what the tax office will assess.
2. Register a Gewerbe, if you need one. This happens at the local Gewerbeamt. It is quick and costs a small fee.
3. Fill in the Fragebogen zur steuerlichen Erfassung. This is the tax registration questionnaire, submitted through the Elster portal. It is the single most important document in the whole process.
4. Receive your Steuernummer. The tax office sends it by post, usually within a few weeks. You cannot write a proper invoice without it.
5. Sort out health insurance. Leaving employment changes your status. This needs handling in the same month, not later.

Where people get stuck

The questionnaire asks you to estimate your profit for the current and following year. People panic about this. It is an estimate, not a promise, and it mainly determines whether you will be asked to make advance payments. Guess low and you may face a large bill later. Guess high and you tie up cash you need now.

The other common trap is the description of your activity. Write it carelessly and you can be classified as a Gewerbe when you had a good case for Freiberufler status. Write it in a way that reflects what you genuinely do, in specific terms.

What to do next

If you are at the point of filling in the questionnaire and you are not sure about the classification, that is exactly the moment to get a second opinion. It is far cheaper to get right the first time than to correct afterwards.

I write about this every Thursday in the Professional Freedom newsletter. It is free.