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‘Intimidating’: What it’s like to be self-employed in Germany in 2024

Being self-employed or freelance in Germany has lots of positives but it can also be costly and difficult - especially during an economic slump. The Local readers share what it's like working for yourself in Germany in 2024 along with their advice.

Published: 24 May 2024 15:17 CEST

'Intimidating': What it's like to be self-employed in Germany in 2024

A man works on a laptop in cafe. What's it like being self-employed or freelance in Germany. Photo: picture alliance/dpa | Sebastian Gollnow

Working for yourself in Germany can be a rewarding experience. But it’s fair to say that being self-employed is not for the faint-hearted.

With a lot of bureaucracy to wade through and high costs, those who decide to go it alone – whether through setting up a business or as a freelancer – can face hurdles.

And it can get even more tricky during a cost of living crisis. A recent survey found that many self-employed people are facing difficulties finding assignments as Germany’s economy has slumped.

The Local asked readers to share their experience of being self-employed in Germany, what changes they’d like to see and their tips for others who are considering going down this path.

‘Golden era is over’

There were mixed views on how the situation stands at the moment, although most said they had seen a dip in the market.

Freelance language teacher Joe, 54, based in Munich, said demand was still there “but less budget seems to be affecting some clients”.

Andrew, 39, in Berlin, who is a freelance web developer, said “The tech market is tough right now, with the ‘golden era’ of the 2010s being over.

“I blame massive VC over-investment creating unrealistic demand in 2020 and now companies are cutting back.”

Others said the slowdown was improving.

“I have a steady work stream for now and the market seems to be slowly improving, but there was a sharp downturn towards the end of 2021 and the market has been very noticeably harder since then,” said Michele, 33, who’s based in Berlin and is a freelance software engineer.

‘More difficult finding German clients’

Lots of people said they were looking for clients outside Germany.

Haylee, 34, a copywriter in Berlin, said competition was “super high” right now.

“Luckily I can look for jobs in my home country (Australia) as well,” she said.

Luc, 58, who’s based in Munich and works in business development for life sciences said it has been “more difficult to find German clients, but easier finding clients located in Asia that are looking for European entry and support”.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany. Photo: picture alliance / dpa-tmn | Andrea Warnecke

For Erica, 40, looking outside Germany has also been a way for her to keep a steady stream of work.

The self-employed copywriter in Berlin said: “I have had a lot of prospects, new projects and clients in the past two years. I work across the US, UK and EU markets, among others, so I am not directly reliant on German clients. While other freelancers limited to the tech or generic marketing sectors have faced a downswing, my sector (corporate sustainability) is very active.”

Another respondent, Alex, 40, in Berlin, who works as a consultant for digital product development said it was harder to find assignments and that there was a higher expectation on creating content.

Advances in technology are also a factor. A writer and journalist who has been freelancing for several years told us: “Several side gigs have been replaced by generative AI (blog posts and white papers).”

‘Everything falls on the freelancer’

When asked how Germany fares as a country to be self-employed in, respondents said it isn’t easy.

“Compared to being a salaried employee it’s not that great,” said language teacher Joe in Munich.

Most people mentioned the high cost of health insurance and other insurance contributions, as well as the extra paperwork. Others said it has become more difficult to find a tax advisor, and urged Germany to make processes around self-employed and freelance policies simpler.

Gordon Barnes, 50, in Munich, who is an IT consultant said the biggest problem about being self-employed in Germany is “around pension and retirement planning”

“Everything is on the freelancer without any support,” he added.

Jason Wright, 46, a freelance motorsport design engineer based in North Rhine-Westphalia said those going it alone need to be “prepared for a lot of paperwork and strict constraints on how you operate on a day-to-day basis”.

He said he’d like to see more support available in English “especially from the tax authorities”.

A woman working on her laptop.

A woman working on her laptop. Photo by Marcus Aurelius: https://www.pexels.com/photo/woman-using-macbook-pro-4063697/

Consultant Mike Moseley, 66, in Mülheim un der Ruhr, said he found the process of registering as self-employed and doing tax returns “intimidating”.

Michele in Berlin said taking the first steps to becoming a freelancer in Germany is hard.

“This is not my first freelancing stint, so I’m quite accustomed to the processes, but the entry barrier is still fairly high,” said Michele.

Andrew in Berlin said, however, that once you get a tax advisor and fill in the correct registration forms, “it’s generally pretty straight-forward”.

Get a tax advisor, save and network

Many respondents advised getting professional advice on taxes.

Alex in Berlin recommended networking to meet and talk with other freelancers, getting a separate bank account and trying to get a tax advisor “as soon as possible”.

A few respondents to our survey recommended those who are eligible to apply for Germany’s artist social insurance fund, known as the Künstlersozialkasse (KSK), which provides artistic freelancers with an affordable way into the social insurance system.

“You can get copies of the application form in English if you need it, said a writer who wished to remain anonymous.

The Local readers also recommended saving.

“Be sure to put something aside each month for retirement,” said Richard, 70, in Frankfurt.

Andrew in Berlin said people should set aside 25 percent of their income from the start for taxes, adding: “Another 20 percent will likely go to the Krankenkasse!”

Meanwhile, Erica in Berlin advised people to “think strategically through all aspects of business” when they venture into freelancing.

“Explore different pricing models beyond hourly, which doesn’t reward high experience or efficiency,” she said. “Connect with high-earning freelancers in your field and learn from them. Set boundaries with clients on timelines, scope, and service offers. Develop your own policies and processes to lead client engagements.”

Ultimately, the additional effort required to freelance makes some question if it’s worth it. Joe in Munich said: “Do whatever you can to avoid it…there is a lot of administration.”

Member comments

Anonymous - 28 May 2024 at 13:36 CEST

The best thing I ever did while freelancing in Germany was to set up a private pension scheme called a Rürup Rente. 80% of the amount contributed is tax deductible. After paying in for 14 years, I got a private pension of 800 Euros a month, which my public health insurance ignores when assessing my contributions. Contact a good insurance broker for advice.

Become a Member to leave a comment.

Which foreign residents are likely to become German after citizenship law change?

Germany’s highly anticipated citizenship reform, which comes into effect as of Thursday June 27th, is intended to make Germany more competitive as a destination for skilled workers and also to allow long-term residents an easier path to naturalisation.

The biggest changes to current rules around citizenship include: allowing dual citizenship, reducing the residency requirement from eight years to five, and allowing for birth right citizenship to be extended to children born in Germany to a parent who has resided here for the past five years.

On Monday Business Insider shared data from a legal service provider that specialises in citizenship applications and immigration law to identify trends among those getting ready to apply for citizenship.

Additionally, The Local previously surveyed 121 of our readers about why they were applying and how the process is going so far.

Here’s what we can say about Germany’s incoming citizens based on those sources.

Gainfully employed long-term residents

Many long-term residents who haven been put off from getting citizenship previously – perhaps due to the stricter rules – will be considering applying now. The majority of applicants for citizenship in Germany are expected to be employed.

Generally being able to support yourself economically without depending on social benefits like Bürgergeld or long-term unemployment insurance is a prerequisite for German citizenship. Specifically, under the new law you need to have supported yourself for at least 20 months out of the previous 24 before you apply.

Business Insider looked at data from 50,000 requests for naturalisation in the first five months of 2024 that was shared by legal service provider PassExperten, which specialises in citizenship and immigration cases.

Of those 50,000 applicants for naturalisation, 86 percent had permanent employment or self-employment. Also, a significant portion had already earned professional credentials within Germany – 43 percent had completed a degree or professional training programme in the country.

READER QUESTION: Can I still get German citizenship after claiming benefits?

For many, access to a German Passport and freedom of movement within the EU are among the most important benefits offered by German citizenship. Photo by Anna Gru on Unsplash

In addition to steady employment, the majority of those applying for citizenship have spent the last decade in the country.

Of the 50,000 applicants reviewed by PassExperten, 60 percent had been living in Germany since at least 2015 and one-third since 2012: “Most of the people from whom we receive an application for naturalisation have been living in Germany longer than the fourth World Cup title,” lawyer Mohamed El-Zaatar told Business Insider.

Of course that number may be expected to fall somewhat following the reform, which will cut the minimum residency requirement from eight years to five.

Applicants that just barely meet the five year residency requirement would have come to Germany in 2019 – meaning they had been living in the country through the entire Covid pandemic.

Asked what citizenship meant to them, readers of The Local most often highlighted the value of becoming more integrated, gaining the right to vote and securing the right to live and move within the EU.

Where are Germany’s newest citizens coming from?

Statistics show that newly added citizens are a diverse bunch coming from every corner of the globe – people from 157 different countries became German in 2023 according to Germany’s statistical office (Destatis).

In 2023, Syria was the most common country of origin by far, followed by Türkiye, Iraq, Romania and Afghanistan – these countries combined amounted to a little more than half of all the newly naturalised citizens.

But these proportions, as well as the total number of applicants, are constantly changing and have shifted dramatically in recent years. Around the turn of the century, immigrants of Turkish descent – many from the so-called ‘guest worker’ generation who helped rebuild infrastructure after the war – made up the biggest group of incoming citizens. In the following years, the total number of incoming citizens fell significantly until it spiked again last year.

The recent spike in Syrian immigrants is linked to the surge in refugees who came to Germany between 2014 and 2016, many of whom became eligible for German citizenship within the last couple years.

The new law also has carve-outs specifically to encourage people who came to work in Germany following World War II – the so-called guest-worker generation. The government is hoping to to encourage members of this group, some of whom have lived in Germany for 60 years now, to apply for naturalisation.

Meanwhile, Brits – who lost many rights due to Brexit – are also expected to be keen to become German partly to regain EU rights.

INTERVIEW: Germany’s new citizenship law is ‘historic’ moment for foreigners

But it’s hard to predict how these trends may change in the coming years. For example, the influx of Ukrainian refugees following Russia’s invasion of the country in early 2022 has led immigrants and refugees from Ukraine to outnumber those from Türkiye and Syria in some parts of Germany.

While the majority of surveyed Ukrainian refugees say they plan to return home following the war, some of those who have integrated well in Germany could eventually be tempted to apply for citizenship, especially to make moving between the two countries easier.

The statistically average applicant is a young married man

PassExperten found that most of the applications for naturalisation it reviewed were submitted by men – at about 70 percent. About 41 percent were married, most of them were childless.

The male-dominant trend is confirmed, if a bit less dramatically, by Destatis data. Of those successfully naturalised in 2023, about 45 percent were women.

A German citizenship certificate and passport.

A German citizenship certificate and passport. Photo: picture alliance/dpa | Fernando Gutierrez-Juarez

The average age of naturalised citizens was 29.3 years, which is about 15 years younger than the average age of Germany’s population.

Abdulghani, 26-year-old Master’s student in Munich from Syria, told The Local that he will apply to naturalise when he’s finished his studies. Having lived in Germany for three years so far, he’ll be close to the average age of Germany’s citizenship applicants by the time he is eligible under the updated law.

He noted that the ability to integrate and naturalise here “means everything” to him and was among the top reasons he chose to study here.

Primarily living in the cities and the west

Interestingly, if not surprisingly, there are dramatic differences in the number of people applying for citizenship from region to region.

The city-states of Bremen, Hamburg and Berlin are home to the largest proportions of citizenship applicants, according to PassExperten, followed by North Rhine-Westphalia.

The five states that make up former East Germany – Saxony, Saxony-Anhalt, Brandenburg, Thuringia and Mecklenburg-Western Pomerania – are home to the smallest share of new citizenship applicants. Combined, they account for about seven percent of the country’s naturalisation applications.

In comparison, Berlin accounts for about eight percent by itself.

This aligns with results to our readers’ survey – the majority of respondents were living in major cities or towns in west Germany.

But there were a few readers in Saxony, Thuringia and Brandenburg who said they were getting ready to apply for citizenship this year.

For Nida, 28, who lives in Thuringia, Germany is the “land of ideas”. She adds that her motive to naturalise is to “be part of the culture and society where [she] can contribute to science”.

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