Legal requirements
Requirements for self-employment
In Germany, anyone can become self-employed and start up a company. This possibility of entrepreneurial freedom is a basic principle of the German economy. However, for some professions, you must provide evidence of certain qualifications or meet legal obligations. You also need to know whether you want to practise a trade or a freelance profession, since, depending on the type of profession, different requirements apply when applying for a residence permit. The most important information can be found on this page.
There are no restrictions on people who have migrated to Germany from other EU states, as well as people from Norway, Iceland, Liechtenstein and Switzerland, when it comes to becoming self-employed and starting their own business. But people from non-EU countries (so-called “third country nationals”) also have the opportunity to start their own business in Germany. The only difference is that the process is more complicated and depends on your personal and professional circumstances. As a third country national, you can only become self-employed once you have been issued with the relevant permit from the local immigration authority (“Ausländerbehörde”). You need to apply for the correct residence permit for this. This depends on whether you are still residing outside of Germany or whether you are already living in Germany. If you are already living in Germany, we explain the steps required under The right residence permit for your self-employment. If you are still abroad, we explain the steps you must take under Visa and immigration process.
Freedom of trade
Everyone has the right to perform a trade on a self-employed basis insofar as it does not contravene the applicable laws and is not subject to legal constraints. The opportunity to run your own business that is associated with the freedom of trade is an essential part of a free market economy.
Whether or not you need formal qualifications depends on the occupation that you wish to perform on a self-employed basis. For many occupations, your qualifications will need to be checked and officially recognised before you can start work. This is especially true for highly qualified occupations, such as medical and legal professions. But in Germany you must also provide proof of qualifications for many skilled manual jobs too. A distinction is made between skilled trades requiring a licence and skilled trades that can be practised without a licence. Before you register as self-employed, you need to find out which category applies in your case.
You need a formal qualification for 43 of the 130 German trade occupations. If you wish to be self-employed in one of these occupations, you must have your professional qualification officially recognised (see box: Professional recognition). Your foreign qualification will often only be viewed as partially equivalent to the German master trade, as you will not have learnt specific tasks. In this case, you will require an adjustment qualification (“Anpassungsqualifizierung”) in order for your original qualification to be seen as equal.
Find out whether the job that you want to perform on a self-employed basis is what is known as a regulated profession. These professions include freelance professions such as doctors, accountants and architects. You need your qualifications to be officially recognised. Enter your occupation in our Glossary of professions, and you will find out which category it belongs to.
Professional recognition (“berufliche Anerkennung”) is where your professional qualification is checked to ensure that it corresponds to the qualifications required for the respective profession in Germany. If there are no differences or the differences are only slight, your professional qualification will be recognised as equal. If there are significant differences, you will have to take a test or attend a course or other qualification measure to achieve equivalence.
You can get free support from the IQ support centres – available in each of the German states – on all questions regarding professional recognition, such as the application process, the documents required, cost and qualifications. You can find a support centre in your area on the IQ Network platform.
Here, you can find out how and where you can have your qualification recognised.
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Exemptions
There are numerous exemptions for setting up a business in a craft that requires a licence. We recommend that you always seek advice from experts at the Chamber of Crafts if you do not have a German master craftsman's certificate and are interested in self-employment in a craft that requires a licence.
Examples of exemptions:
Do you not yet have a master's qualification, or has your professional qualification not been equivalently recognised? There are still ways to set up a trade in the craft that requires a licence:
- Register for admission to the master's examination at the chamber of the region where you want to become self-employed. It may make sense to pursue a professional qualification beforehand that will prepare you for this exam.
- Employ a person with a master craftsman's qualification which will allow you to set up a business in the craft that requires a licence. This way, you can be self-employed while preparing to take the master's exam.
Your foreign qualification was rated as only partially equivalent to the German master craftsman's qualification in a recognition process. This means you are not allowed to perform work which you have not learned through your qualification. Sometimes, however, it is possible to carry out a part of the trade that requires a permit. One example: You can become self-employed as a barber but not a woman's hairdresser.
Exceptions are also made if you can no longer be expected to take a master craftsman's examination, for example, because of your age. This is established in § 8 of the Crafts and Trade Code. However, you must provide evidence of your technical and commercial knowledge, qualifications and professional experience. Citizens of the EU, the European Economic Area and Switzerland can also receive such an exemption. For this, you must either have relevant work experience (see § 2 EU/EEA Crafts and Trade Code) or demonstrate being in possession of a corresponding foreign qualification (see § 3 EU/EEA Crafts and Trade Code).
Fellows with a lot of professional experience can get an exemption. This also applies to people whose foreign qualifications have been fully recognised. The conditions for this exemption are set out in § 7b of the Crafts and Trade Code: The qualification of a fellow or the recognition of a foreign qualification must have taken place in the relevant craft that requires a licence. At least six years of experience in this craft must then be proven. You must have held a managerial position for at least four years. Evidence is provided by certificates and references. The Chamber of Crafts requires €100 to €500 for the test - depending on the effort. For skilled workers from abroad, please note: periods of professional experience are only counted from the point in time at which the recognition of the foreign qualification was certified.
Trades that require a licence
Find out whether you need a special permit to open for business. This is relevant for insurance brokers and people running private hospitals, amusement arcades/casinos and security firms, for example. If you wish to become self-employed in one of the trades requiring a permit, you must provide proof of certain pre-requisites and need to apply for a permit from the trade office (“Gewerbeamt”). The requirements differ according to the trade in question. The following requirements are often made:
- Proof of the personal trustworthiness of the founder, for example a CRB check (“polizeiliches Führungszeugnis”), an extract from the commercial register or a certificate of non-objection (“Unbedenklichkeitsbescheinigung”) from the tax and revenue office (“Finanzamt”) and town hall (“Gemeindeamt”).
- Proof of the vocational qualifications of the founder – also referred to as “professional suitability” (“fachliche Eignung”). This could be with a certain qualification, or a certificate showing participation in relevant further training.
- Proof of the objective qualifications for setting up the business – also referred to as “objective suitability” (“sachliche Eignung”) – for example with a SCHUFA credit report and/or with a certificate showing the structural suitability of the intended business premises.
The requirements are regulated in the Gewerbeordnung [Trade Regulation Act] (GewO) § 29 to § 40. If you are approved, you may practise a trade that requires a permit. You cannot transfer your permit or obtain a permit from others.
In most cases, self-employment in a freelance profession requires completing a university degree. However, it is also possible to acquire the knowledge required for freelance work through self-study or through employment. However, the knowledge acquired must correspond to the level of a university degree. The freelance professions in Germany are divided into three categories: catalogue professions, similar professions and occupations.
Catalogue jobs are the “classic” freelance professions for which a university degree is required in most cases. § 18 of the Einkommenssteuergesetz [Income Tax Act] (EStG) defines which professions these are. Most catalogue professions require certain professional qualifications. If you studied this profession in Germany and obtained your degree here, you are free to be a freelancer in that profession. If you obtained the required qualification abroad, your foreign qualification must be equivalent to the relevant German profession. For this to be established, you must go through a recognition process. Other professional duties may be compulsory. Check in our Glossary of professions whether your profession requires specific qualifications!
These are professions that are not expressly mentioned in the catalogue but are similar to the catalogue professions in terms of training or specific professional activity. They are also called analogue professions. Therefore, the similar professions were included in the circle of freelance professions. However, the requirements are high. As a rule, in individual cases, the tax office checks whether a profession is one of the similar and, thus, freelance professions. Check in our Glossary of professions whether your profession requires specific qualifications!
The category of occupations is intended to enable freelancing in new fields of work or new job profiles. This may apply in the following areas:
- scientific occupations
- artistic occupations
- writing occupations
- teaching occupations
- educational occupations
The tax office usually decides on a case-by-case basis whether the occupation in question belongs to the freelance professions – i.e. has the typical characteristics of a freelance profession. It must be recognised here as equivalent to a German freelance profession if you obtained your professional qualification abroad. For this to happen, you must go through a recognition process.
