Freelance and self-employed

§ 21 AufenthG: freelancers, artists, founders; Berlin practice and taxes in outline.

Berlin has many freelancers and artists. The law distinguishes freelance (liberal professions) from trade/business.

The residence permit (§ 21 AufenthG)

• Business (§ 21 (1)): economic interest or regional need, positive effects on the economy and secured financing (own capital or credit commitment). Assessed on the viability of the idea, entrepreneurial experience, capital and effect on jobs and innovation.
• Freelance (§ 21 (5)): permit "may" be granted without the conditions of (1); a required licence to practise must be granted or promised.
• After a German degree (§ 21 (2a)): a graduate "should" get the permit if the activity relates to the studies.
• Age over 45: adequate pension provision (§ 21 (3)).
• Business only: the permit is first limited to 3 years, and settlement after 3 years is possible under conditions (§ 21 (4)). § 21 (5) says (4) does not apply to freelancers; they follow the general settlement rules (§ 9). Duration of a freelance permit: ask the LEA.

Source: § 21 AufenthG. Because of § 41 AufenthV you can apply at LEA Berlin after entering visa-free. The working-holiday permit also allows self-employment.

Who counts as a freelancer

Liberal professions and similar activities in § 18 EStG (for example artists, writers, translators, journalists, architects, consultants in some fields). The tax office decides in practice. Whether software development, design or coaching count as "freelance" in Berlin depends on the case; ask the Finanzamt.

What the LEA tends to ask

We found no official list of documents for freelancers. Commonly reported: a business plan or portfolio, client letters of intent or contracts, a financial plan, proof of health insurance and pension provision, and for regulated professions the licence. Check the LEA checklist for "selbständige Tätigkeit".

Taxes and registration (outline)

• Register with the tax office (Finanzamt) via ELSTER; you receive a tax number. Freelancers do not register a trade; traders register with the trade office. Check which applies.
• Value-added tax: the small-business scheme (Kleinunternehmer) is possible below set limits. Limits not verified here.
• Your Canadian tax position changes when you leave: Taxes and leaving Canada.

Artists: Künstlersozialkasse (KSK)

Self-employed artists and publicists can join the KSK, which pays about half of the contributions to statutory health, care and pension insurance (kuenstlersozialkasse.de). Eligibility for foreigners, income minimum and review of "artist" status were not checked here.

Health insurance

Mandatory; see Social security and health.