The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.
Self-employed people in Germany are classified by the authorities
- either as business people (Gewerbetreibende)
- or as members of the liberal professions (Freiberufler)
Did you know:
- It is not you who decides whether you have to register a business or a liberal profession, but the tax and trade authorities. In practice, the distinction is often difficult to make. It depends on the individual case. Get advice from the experts for liberal professions: IFB Institut für Freie Berufe, Start-up hotline 0911 23 565 28
- It often happens that people who see themselves as liberal professions, successfully register with the tax office without any questions arising. These people then frequently and incorrectly assume that they are thus automatically recognized as a liberal profession. If, despite doubts, you register as a liberal profession, no harm will be done as long as you are not subsequently classified as a tradesperson following an audit. It can be very expensive if you are later classified as a tradesperson and have to pay trade tax retrospectively. In some cases it might even occur that the tax office accepts liberal profession status while the trades’ office (Gewerbeamt) demands that you register as a tradesperson.
- For example, the trades’ authorities recognize teaching as a liberal profession’s activity only if you can prove you have a degree from a university or university of applied sciences. Please see our special information for coaching, teaching and consulting activities.
- Gewerbe ist not only the sale of products but also includes services as well as craft activities. It is defined as any planned, permanent self-employed activity undertaken with the intention of making a profit, with the exception of agriculture, forestry and the liberal professions.
- Both liberal professions and trades people pay taxes and must check which areas of social insurance they have to pay into.
- FAQ How to register with the authorities
Are you planning to apply for a residence permit that allows you to go self-employed in Munich?
- Then beware that the application process for a business (Gewerbe) in accordance with Section 21 (1) or (2a) on the Residence Act (AufenthG) and for a liberal profession in accordance with Section 21 (5) on the Residence Act varies profoundly.
- Before preparing the required documents, please make sure that you have classified your planned activity correctly, taking into account the laws and current case law. Contact the Institute for Liberal Professions for a free initial assessment. Do not hesitate to seek the support of professionals such as tax advisors and lawyers for immigration law.
Freelancing is not a legal form and should not be equated with “Freiberufler” work.
- The terms “freelance” and “freelancer” translate to „Freie Mitarbeit“ and “Freier Mitarbeiter” in German.
- “Freie Mitarbeiter” are not employed by a company but are self-employed. Either with a business or a liberal profession.
- “Freie Mitarbeiter” accept orders from business partners based on a service contract (freier Dienstvertrag), a contract for work and services (Werkvertrag) or a hybrid form. Anyone who concludes a contract for “Freie Mitarbeiter” does not automatically work as a Freiberufler!
- Important topics for “Freie Mitarbeiter” are bogus self-employment and employee-like self-employment.
- Download Institute for Liberal Professions’ information sheet Freie Mitarbeit ist nicht Freier Beruf: Was ist der Unterschied? (PDF, 92 KB)
“Kleinunternehmen“ and “Kleingewerbe“ are not legal forms.
- These terms are used when you generate sales and profits at a level specified by European Union regulations and the German Commercial Code, among others.
- Visit our page choice of legal structures for an overview.
Kleinunternehmerregelung – the small business owner regulation
- This term refers to a statutory simplification regulation in VAT law for self-employed persons with only low turnover.
- Both businesses as well as liberal professions can use “Kleinunternehmerregelung” .
- Do you have customers outside Germany, for example in other EU countries or third countries? Self-employed persons who “Kleinunternehmerregelung” in Germany need to be extremely careful here.