Commercial or freelance?

There are two ways of starting a business in Germany. Either you run a business or you are a freelancer. It depends on what kind of job you do. Whether you work commercially or as a freelancer has an impact on the formalities and the legal form of your company.

Commercial activity

For example, if you want to start your own business with a craft business or a trade, you have to register a business – in the place where the future headquarters of your company is to be. The start-up platform explains what you have to pay attention to.

For some activities you have to do certain Admission requirements fulfill. In this case, one speaks of a “business requiring a license”. Requiring a permit can mean, among other things, that you have to obtain certain permits, apply for a license or have professional qualifications.

This applies, for example, to craft businesses, financial service providers or care services, but also to a whole range of other activities. You can find out which areas this applies to on the start-up portal.

The BMWi authorities’ guide also shows you where you can complete these formalities in your region.

Freelance work

In Germany, there are a number of activities that are classified as “liberal professions”. Anyone who becomes self-employed in these areas usually works as a freelancer. These include, for example:

You can also find an overview of liberal professions on the start-up portal. For some activities, an assignment to the liberal professions is only possible after checking on a case-by-case basis. The tax office decides whether your activity is freelance or commercial, with which you register your project no later than four weeks after the start. Please also note that some professions require you to have specific qualifications and professional qualifications.
Detailed information on requirements, taxes and the legal forms of freelancers can be found on the website of the start-up platform.

Legal forms

Every company in Germany has a legal form. The legal form gives a company the framework for regulating legal matters. The decision in which legal form you want to run your company has far-reaching consequences – for example in relation to how much start-up capital you need and whether you are personally liable for your company.

In the start-up portal, you will find an overview of the legal forms commonly used in Germany. The legal form finder of the start-up platform can also be helpful. Detailed information for freelancers is available on the website of the start-up platform.

We recommend consulting a lawyer or a tax advisor before making a decision.

What form should your company take?

You will become the boss of your own company in different ways. We’ll name a few:

Start-up: If you start a new company, you can build it up according to your ideas. But this also means that you should plan your project particularly carefully. Most founders decide to start a new business.

Founding in a team: Mutual support and higher equity favour founding with partners. The start-up portal explains what you should pay attention to.

Company succession: Benefit from established structures and the existing customer base in a company whose management you take over. The next initiative and the Succession in Germany portal will provide information and support.

Franchising: This process is used primarily by retail and catering brands who want to expand their sales area without setting up their branch. The German Franchise Association and the start-up portal explain how you can become part of this concept.

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