Set up as a freelancer: Process, costs & services at a glance - firma.de

Set up as a freelancer in Germany

The no-brainer way to start your freelance business!

  • Get up and running as quickly as possible
  • Simple and unbureaucratic establishment
  • Receive personalised advice throughout the set-up process
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Classic

Includes expert consultation via telephone and all services for setting up a sole proprietorship
199 €
/

one-time*

*Net price
Top features:
  • Preparation of your trade registration (Gewerbeanmeldung)
  • Preparation of your tax office questionnaire (Finanzamtfragebogen)

firma.de

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A dedicated consultant

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On demand telephone support

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Employment contract template (full-time)

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Employment contract template (part-time)

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Temporary personnel contract template

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Internship contract template

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Freelancer contract template

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Letterhead, legal disclosure and invoice templates

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Completion of the trade registration form (Gewerbeanmeldung)

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Coordination of all necessary legal formalities

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Timely preparation of your tax office questionnaire (Finanzamtfragebogen) for the application of your VAT ID (USt.-ID)

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Loan contract template

Other Services

Free 30-day trial of meineSCHUFA premium

Digital handbook for founders: Firma gründen (currently only available in German)

Placetel all-in-one telephone solution

ETL IP Patent- und Rechtsanwaltsgesellschaft mbH

Protect your brand, company name and logo in Germany

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.

Protect your company’s most valuable asset with an EU trademark

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.

All-In

All-inclusive package plus
- bookkeeping
- annual accounts
287 €
/

one-time*

*Net price
All features of the Classic package plus:
  • Set up of bookkeeping services
  • Set up of annual financial accounting

firma.de

checked

Direct line to the firma.de executive team

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Set up of annual accounting Starter 88 Euro

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Set up of bookkeeping services Starter

checked

A dedicated consultant

checked

On demand telephone support

checked

Employment contract template (full-time)

checked

Employment contract template (part-time)

checked

Temporary personnel contract template

checked

Internship contract template

checked

Freelancer contract template

checked

Letterhead, legal disclosure and invoice templates

checked

Completion of the trade registration form (Gewerbeanmeldung)

checked

Coordination of all necessary legal formalities

checked

Timely preparation of your tax office questionnaire (Finanzamtfragebogen) for the application of your VAT ID (USt.-ID)

checked

Loan contract template

Other Services

Free 30-day trial of meineSCHUFA premium

Digital handbook for founders: Firma gründen (currently only available in German)

Placetel all-in-one telephone solution

ETL IP Patent- und Rechtsanwaltsgesellschaft mbH

Protect your brand, company name and logo in Germany

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.

Protect your company’s most valuable asset with an EU trademark

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.

Net price

Life is too short to deal with German bureaucracy

ClassicAll-In
firma.de
Direct line to the firma.de executive team
Set up of annual accounting Starter 88 Euro
Set up of bookkeeping services Starter
A dedicated consultant
On demand telephone support
Employment contract template (full-time)
Employment contract template (part-time)
Temporary personnel contract template
Internship contract template
Freelancer contract template
Letterhead, legal disclosure and invoice templates
Completion of the trade registration form (Gewerbeanmeldung)
Coordination of all necessary legal formalities
Timely preparation of your tax office questionnaire (Finanzamtfragebogen) for the application of your VAT ID (USt.-ID)
Loan contract template
Other Services
Free 30-day trial of meineSCHUFA premiumOptionalOptional
Digital handbook for founders: Firma gründen (currently only available in German)OptionalOptional
Placetel all-in-one telephone solutionOptionalOptional
ETL IP Patent- und Rechtsanwaltsgesellschaft mbH

Protect your brand, company name and logo in Germany

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.
OptionalOptional

Protect your company’s most valuable asset with an EU trademark

Provision of legal services is by ETL IP Patent- und Rechtsanwaltsgesellschaft mbH, Clayallee 343, 14169 Berlin.
OptionalOptional
199€ excluding tax287€ excluding tax
StartStart

Note:
* The notary fees and the costs for entry in the Handelsregister (commercial register) are not included in the price and will be charged separately.
** firma.de Firmenbaukasten AG does not provide legal advice itself; firma.de works exclusively with lawyers and independent tax advisors who specialise in the field of limited liability entrepreneurial companies. Please make an appointment: +49 611 17207-0 or by e-mail at support@firma.de.

Automate your business set-up with us!

  • benefit-star

    No minimum capital required

    No minimum start-up capital is required to set up a sole proprietorship. Entrepreneurial decisions can be made independently and quickly.

  • benefit-coffee

    Fast, easy and inexpensive set-up

    To get started as a sole proprietor, you do not need a notary or a commercial register (Handelsregister) registration. Thus, saving you time and money.

  • benefit-speed

    Accounting exemptions

    Sole Proprietorships are exempt from publishing annual accounts if its annual turnover is below €600,000 and profit is below €60,000. Fewer accounting obligations mean lower tax adviser fees.

Start your business with firma.de in seven easy steps

  1. You authorise firma.de to set up your business.
  2. You receive expert advice from our consultants.
  3. We prepare your trade registration (Gewerbeanmeldung) in a timely fashion.
  4. We prepare your tax office questionnaire (Finanzamtfragebogen).
  5. We recommend a qualified tax adviser from the firma.de partner database.
  6. We arrange for the express opening of your bank account.
  7. Start doing business!
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Einzelunternehmen frequently asked questions

What is a Einzelunternehmen?

As an Einzelunternehmen, you keep 100 % of your profits, but you are also 100% liable for damages with your private assets.

A Einzelunternehmen consists of one natural person, who operates as a self-employed businessperson, and may or may not have employees. Sole proprietors can be freelancers, farmers or tradespersons.

To set up a Einzelunternehmen you do not need a minimum share capital, and generally, there are few accounting obligations. They are also exempt from a lot of formalities like notarisation and entry into the commercial register (Handelsregister).

Einzelunternehmen must be registered with the tax office (Finanzamt) for taxation and regulatory reasons.

Einzelunternehmen can take the form of a small trader (Kleingewerbetreibender), a freelancer (Freiberufler) or a registered merchant (Eingetragener Kaufmann)

Do freelancers have to pay trade tax (Gewerbesteuer) in Germany?

If your annual profits are lower than € 24,500 your business income is exempt from trade tax (Gewerbesteuer).

Freelancers (Freiberufler) do not have to pay trade tax, regardless of their profit.

You can learn more about Einzelunternehmen taxation in our handy guide here.

Does limited liability apply to when I'm a freelancer?

Unlike the corporate forms with limited liability (i.e. AG, GmbH or UG), freelancers are fully and personally liable. The owner runs the business at his or her own risk, and their private assets become the business's assets.

Besides cash, all other kinds of assets are part of the freelancer’s liability, e.g. vehicles, business premises or machines and devices.

On the plus side, setting up a freelance business is easy because there is no share capital to raise and there are fewer bureaucratic obstacles.

If you want to avoid full, unlimited personal liability choose the GmbH or UG as your corporate form. If you cannot raise the required share capital of € 25,000 for a GmbH, the UG is your best alternative to start a limited liability company in Germany.

How much profit can freelancers keep for themselves?

Freelancers can keep 100% of their profits. The earnings are taxed via their personal tax rate.

How do I know if I'm a freelancer and not another type of sole proprietor?

If you want to set up a sole proprietorship of some type it is sometimes not so easy to find out for sure which of the three classifications apply to you: Are you a freelancer, a farmer or a tradesperson? Here is a short summary for each category:

1. Farmer Sole Proprietorship

Unlike the other groups, members of this category are easy to identify. In Germany farming and forestry are recognized occupations requiring formal training.

2. Freelance Sole Proprietorship

Finding out whether you can be categorized as a freelancer is not as easy. For a list of typical freelance professions (in German) click here.

Your always have to consider your individual case. The final classification is made by the competent revenue office (Finanzamt).

3. Tradeperson Sole Proprietorship

Traders (Gewerbetreibende) are defined as business people who are neither farmers nor freelancers. If your business activity is not listed as a freelance profession and you are not a professional farmer it is very likely that you will be considered a trader. The final classification is made by the Finanzamt.

How is a freelance business taxed?

Trade tax (Gewerbesteuer)

If you are a freelancer, the German Trade Tax Act (GewStG) does not apply to your business.

Income tax (Einkommensteuer)

Regardless of your classification as a sole proprietor, you must pay income tax, which calculated from what your business earned throughout a financial year. Profit withdrawal does not affect your tax liability.

VAT (Umsatzsteuer)

The Value Added Tax Act (Umsatzsteuergesetz) applies to every sole proprietorship (freelance or otherwise). Calculating the sales tax on your transactions and keeping records of your calculations are an essential part of running your business.

If you have two sole proprietorships, you must submit a VAT return for each of them in a single document to the local tax office (Finanzamt) that you registered your first sole proprietorship at.

Tax exemptions

If your annual turnover is lower than € 17,500, you are considered a Kleinunternehmer (small trader) and are therefore exempt from VAT. This small business classification applies to other types of companies as well.

What can I name my freelance business?

Turn your name into a business name

The first impression that customers will have of your business is its name - so choose wisely!

For freelance businesses, the freelancer usually turns his or her personal name into the company name, e.g. “Iris Smith”.

Regulations for registered traders

If you have to enter your Sole Proprietorship in the commercial register (Handelsregister), you can choose any suitable company name you want, but it must include the suffix "eingetragene Kauffrau" or "eingetragener Kaufmann" (or the abbreviations e. K., e. Kfr., e. Kfm.).

Sole Proprietorships not listed in the Handelsregister must not add the suffix.

firma.de tip: Add a meaningful business designation

In addition to a company name, sole proprietors are allowed to choose a business or sector designation, e. g. “digital technics” for Marco Mayer Web Solutions e. K. The business designation is meant to have a promotional and decorative effect.

However, the designation must not be confused with the company name that you use to represent your freelancer business in official business dealings.

When you choose a suitable business designation, please note that it must not evoke deceptive associations about your company’s size, capabilities and services. For example, a solo painter and decorator cannot choose “global painting services” as the business designation is misleading.

We've got a whole article about naming Einzelunternehmen here!

Want to learn more about Sole Proprietorships?

  • An overview of taxes

    Find out everything you need to know about Umsatzsteuer, Einkommensteuer and Gewerbesteuer.

  • How to name your Einzelunter-nehmen

    A guide for choosing the right business name for small traders, freelancers & registered merchants in Germany

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