German Self-Employment Residence Permit Requirements: Do You Qualify?
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Last updated on December 22nd, 2022 at 08:43 pm
Are you considering applying for a German self-employment residence permit? Read this and check if you meet all German freelancer visa requirements?
Getting a German self-employment residence permit is not a fabled myth. It is just…a very polarising topic.
Some say it’s very difficult to get, and yet others have received it on the spot on their first visit to the AHB. Your experience can vary depending on your nationality, your skills, earning potential, work history or maybe even your caseworker’s mood that morning.
Then it is either a very long frustrating process or an extremely straightforward deal.
My self-employment visa took NINE torturous months to process…! I’d describe how that went, but it would take up a whole new blog post. 😉
When I was applying for my German self-employment visa, I could not find any info relevant to MY nationality. I am an Indian passport holder.
Almost every ‘get your German freelance visa‘ guide was by someone from the US, UK, Canada or Australia. You see, Germany permits a visa-waiver program for citizens of 62 countries. Under this visa-waiver program, nationals from these countries can enter Germany without needing an entry visa. India isn’t one of these 62 countries.
Expat freelancers in Germany are not all that rare. But, if you are a non-EU, Southeast Asian expat freelancer, then congrats! You’re officially a unicorn!
You may want to read: How to Get a German Freelance Visa From India (or any non-EU Country)
So my hope is that if there’s someone from one of ‘the rest of the world’ countries looking to set themselves as a freelancer in Germany could get some valuable info from here.
Let’s see the requirements for the German self-employment visa.
Note: If you are applying for a German Freelance visa from your home country then please read this post. This article describes the German self-employment visa requirements for foreign nationals who are already staying in Germany on a valid residence permit.
1. You Must have a Legal Residence Permit for Germany
You should be in Germany legally before applying for a German self-employment residence permit. When I applied for my German freelancer visa, I was already a graduate of a German university as well as working on my Job Seekers Visa in Germany.
If you already live in Germany and fulfil one of the following German freelancer visa requirements, you can apply for a self-employment resident permit:
- You successfully wrapped up your German university degree, and now hold the 18 months job search visa
- You are the spouse of a person legally residing and working in Germany
- You currently hold a German full-time employment visa and want to switch to self-employment
In some of the above situations, you can convert your existing resident permit into a German self-employment permit.
2. You Must Have a Valid Health Insurance
All residents in Germany must have health insurance.
If you are a new arrival in Germany, then you’ll need an insurance plan that is meant for self-employed people. Here are some visa office approved health insurance providers in Germany.
If you have been on an employee’s health insurance plan in Germany, then you will have to inform your health insurance provider once you register as a freelancer.
Bear in mind that health insurance for self-employed people is VERY expensive.
In Germany, the employer pay for almost half of the health insurance premium and the rest is shared by the employee. In your case you are wearing both hats- so you have to pay for both employer and the employee part of the monthly premium.
You have the option to choose either public or private health insurance.
Both insurances charge according to your monthly income. The public health insurance premium is about 14% of your gross income. But that’s a BIG but, the public system has a maximum monthly contribution cap.
So after a certain income threshold, you end up paying a flat rate regardless of how high your monthly income gets. The last time I checked this threshold was at about EUR 5,500 as gross income per month.
Read more about: Health Insurance for Freelancers in Germany (2020 Update)
3. You Must Earn Enough Monthly Income to Support Yourself
…without relying on the German social welfare system.
This is a no-brainer! The financial requirement for a German self-employment visa is just like a regular resident permit.
That is, you should be able to financially support yourself through your business. Your caseworker will ask you for some kind of proof of income.
In my case, I was asked to submit the previous year’s income tax statement. Since I’d only freelanced for a few months, I submit some of my invoices, the copy of contracts that showed my hourly rate or project fees.
I also submitted an income overview that my tax consultant prepares for each month. I even printed out a couple of my Upwork contracts. That seemed to have done the trick as well.
The minimal monthly income could be different depending on your location.
Some places are much more expensive than others. I live in South Germany, where the cost of living is higher. In some cities, you could get away with €700 per month, but in others €4000 won’t cut it.
ABH caseworkers assume freelancers to be the experts in their field. Some earn even more than regular employees in their field and experience. You should aim for a much higher monthly net income from your business.
4. You Must Have German Clients
This one is iffy. Depending on who you ask, you will get a different reply.
German Act on the Residence, Economic Activity and Integration of Foreigners in the Federal Territory clearly states that:
(1) A foreigner may be granted a temporary residence permit for the purpose of self-employment if:
1. an economic interest or a regional need applies,
2. the activity is expected to have positive effects on the economy and
3. the foreigner has personal capital or an approved loan to realise the business idea.
This means the applicant has to demonstrate that they have existing or potential clients in Germany. You can prove this by showing invoices or contracts or through letter of intent by German businesses.
In my case though, I was able to get my self-employment visa without any local contracts. When I applied for my self-employment visa, all my clients were from Upwork. And none of them was from Germany!
However, I’ve had email inquiries from a few German businesses, and I also occasionally worked on short-term projects with German clients. But nothing ongoing.
My recommendation would be to work with as many German clients as you can. The visa applications are analysed on their own merits, and it’s best to cover all your bases. And this is an important one.
Next up – How to register yourself as a Freelancer in Germany with the Finanzamt.
Have you ever applied for a German self-employment visa? How was your experience? Did you meet all the German self-employment visa requirements or had to provide additional documentations to your foreigners office?
Tell us in the comments below.
Read about more German Visas here.
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Yamini
Hi there, I am the human behind this blog. If you could not tell by my photo, I am fueled by tea. My expat journey started at the age of 19. Germany has been my home for several years. I hope you will find some helpful insights if you are considering moving to Germany or already live here.
18 Comments
Kim J. Charlie
How you managed to take this informative article and turn it into an interesting piece of writing is simply amazing to me. After reading this article i get to know information about freelance visa policy.
freelance visa in uae
Karla Mora
Hi Yamini, thak you for all the information.
I wanted to ask if by any chance you know what type of careers apply for freelance or if is extrictly mandatory to have a university degree to get it.
Thank you
Yamini
Hey Karla, you’re welcome! 🙂 No, uni degrees are not mandatory for self-employment permits.
Harini
Hi Yamini,
Very insighthful! Really appreaciate your efforts that would help loads to someone taking up freelancing.
I have a question. Considering that I want to register as a Freelancer, would it be possible to work for a client outside of EU. And how would I tax my income in such scenarios?
PS – I hold a German Permanent Residence
Thanks.
Yamini
Hey Harini, thanks for the kind words. 🙂
Yes, of course, you can have clients from anywhere in the world. There are no geographical restrictions for German freelancers 🙂 Your income will be taxed as per German tax laws.
I have covered German freelancer taxes in details in these posts. https://madinde.com/tag/german-taxes
Mudasir Wazir
Hi Yamini,
Thanks for this valuable info.
Do you have any info regarding whether on needs a self-employment visa for a part-time online business as well? I am planning to launch an online clothing store but currently hold a job seeker visa which I received recently after graduating in Germany. I still want to go for employment, however, I was looking to passively make some income with the part-time online store. I was thinking to switch later depending on how well the business does.
Do you know if this is possible n Germany?
Yamini
Hi Mudasir, thank you! 🙂
There isn’t anything like ‘part-time self-employment’. You’re either self-employed or not.
I’m assuming you are a non-EU national living in Germany – You can obviously launch your online business, but you will have to eventually change your job seekers permit into a self-employment permit. The other option that I’m aware of is to get a full-time job and get a residence permit that allows self-employment for a ‘nebenberuflich Selbstständigkeit’.
Then obviously, you will have to register your business with Finanzamt and sort your taxes and business licenses.
Tara
Hello Yamini! I’m soooooo happy I stumbled upon this post. I’m in a very similar situation (although I am American so it’s a tad easier) navigating the KVR for a freelance visa. I had one major question – did you have to put together a business and/or finance plan? The form from the KVR says this is needed for a freelance visa, although many sources online say this is only if you’re starting a business or founding a company.
Curious to hear your thoughts as it’s something you actually went through (instead of all the other BS you read online!)
Thanks so much 🙂
Yamini
Hey Tara, Thank you for reaching out. 🙂 So a business plan was required for my application. I submitted a very simple one-page business plan for 12 months. You can see a screenshot in this post: https://madinde.com/how-to-get-a-german-freelancer-visa
Tulika Nair
Hi Yamini,
Thank you so much for your advice! This really helped. The first few months are always more difficult to navigate, I think.
I hope you don’t mind if I ask you another question. How do you handle the Upwork payment in dollars versus creating your invoice in Euros? Do you use the conversion rate of the day you are withdrawing the money from Upwork to create your invoice or on the day the client’s payment was cleared on Upwork and register the difference in money as a currency conversion difference in your accounting?
I have been speaking to my Steuerberater about this as well, and while they suggested that I make the invoice in dollars, my accounting system, I realized later, does not allow me to invoice in any foreign currency.
Again, thank you for all your help! I really appreciate it.
Yamini
Hey again, no worries I’ve been there myself 🙂
Ah yeah, this was a tricky one!
I used the exact amount that was transferred into my German bank account (because that’s the figure that matters anyway in the end to FA). It is automatically converted into Euros from USD so I would simply put that amount.
In case you have more than one client on Upwork (which is the likely situation) I’d use the conversation rate of the day the payment was approved in my Upwork account. Hope this helps!
Tulika Nair
Hi Yamini,
First I want to thank you for being such an excellent source of information for a freelancer setting up base in Germany. With the many different bureaucratic hurdles to handle, your website has become my go-to.
I am an Upwork user myself outside of regular clients but I am new to the platform and have a few EU specific questions that I seem to not have any answers to. Specifically invoicing. I have read the Upwork community platform at length but it has left me more confused than anything else.
My question is simple, if I create a separate invoice for a client (to follow the sequencing requirement of German invoices), do I make this for the total amount or the amount minus the service fee of Upwork, or should I just add this service fee in my invoice and mention that it is an Upwork deduction? Do you have any tips to handle this mismatch in amount that I receive vs the amount I charge?
Thank you!
Yamini
Hi Tulika, Thank you for the kind words! 🙂
Hope you will be able to read my response even though it comes late (I’d been away for the past several days 🙂 )
I worked on Upwork with some clients and this is how my Steuerberater asked me to prepare my invoices:
1) I treat the Upwork service fee as a business expense. Upwork creates an invoice (Belege) for it in their system which we can download anytime from the ‘Transactions’ section. I’d download all of them and send them to my steuerberater at the end of the month. No need to mention this in your invoices.
2) For the ease of accounting consistency, I would create 1 invoice for each client at the end of every month- so a typical 30-day billing cycle. I’d add the last 30-day earnings from the client in the German compliant invoice format and send all of these invoices to my steuerberater. On each invoice, I’d also add a note ‘Payment made via Upwork on DATE HERE’ and VAT wherever applicable.
We decided to use this method because as you may have noticed Upwork’s invoices are not in a sequential order like Finanzamt needs them to be.
Let me know if this answers your questions 🙂
O1A Visa
I think the best advantage of being self employed is that you have full control of your time but when your living in a different country you also have to abide with the regulations of that country. Even if it’s not Germany all self-employed workers are always been require to meet norms of all the working individual and that is being able to support oneself and be able to afford healthcare insurance.
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