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Business license and business registration

How to register a business and become self-employed

In Germany, a person who pursues income producing activity for their own account is required to register a business. But not everyone needs a business license and for some professions, it is not easy to become self-employed.

An exception to this rule are the so called ‘free professions’: pharmacists, medical doctors, lawyers, notaries, and accountants are some of them. They are treated differently following § 18 Einkommenssteuergesetz.

Another exception are manual (and potentially dangerous) forms of work like hairdressers. Only those with special skill certificates can work self-employed in this area.

Promotional models don’t belong in this category, so everyone who wishes can pursue a self-employed career as a model.

Application for a business license

In order to register your self-employment, you need to apply for a license at the local government. 

The application does not take a long time – optimally, you receive your license directly after the submission. The only prerequisite is that you bring all necessary documents. These include:

  • The fully filled out application sheet for a business license. The form is provided by the local government agency or can be downloaded from the websites of most local governments. For Germany, simply google the name of the city you live in + ‘Gewerbeanmeldung’
  • Special permits for businesses and professions that need to be approved by the government (e.g. dangerous crafts)
  • 15 to 60 € cash for the service fee
  • A copy of your (valid!) passport
  • A work visa for non-EU citizens

Attention: After receiving your business license, you are not necessarily allowed to take business actions right away. Before, you have to fill out a form for the Revenue Service (‘Finanzamt’). In some cases, this can be done along with the business application. After a few days you then receive a tax identity number. Now the business registration process is completed and you can start your freelance or self-employed business activity.

An advantage of becoming self-employed is how cheap and easy this process is. For example, no minimum capital is required. A potential risk is the responsibility that self-employed people have: a person who is self-employed is liable for the payment of any debt that their business has – with their private assets.

Important advice for writing an invoice

To charge customers after providing a service, a self-employed worker writes an invoice. In order for it to be valid, an invoice must contain the following:

  • The name of the business including their tax identity number
  • The name of the client
  • The date of the invoice
  • A clear, sequential invoice number (it is especially easy to just write the year + a consecutive number)
  • A detailed description of the service provided (weights, amounts, hours, place, etc.)
  • The net invoiced amount, the sales tax and the according total amount
  • The term of payment
  • Bank data of the self-employed business
  • The signature of the service providing party

Example invoice as PDF-document_German

Example invoice as Word-document_German