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How to Become a Self-Employed Freelancer in Germany

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Self-employed female worker in Germany
Freelancers in Germany enjoy special tax benefits that are exclusive to them | Photo: Artem Podrez

I always knew I wanted to be my own boss. When I was working a salaried job, I would daydream about what it would be like to be self-employed. But I had no idea how to make the transition from employee to self-employed. I knew where I could get a good head start, though.

A few years ago, I left my cushy job in the UAE and moved to Germany—a country that is known for its thriving freelance culture. I wanted to start a freelance business to capture more opportunities. So I started my life here as an expat student as I figured a business school education would give me a boost.

If you’re thinking of making the switch yourself, here are some things you need to know before you become your own boss in Germany:

 

1.  You need to figure out if you are going to be self-employed or a freelancer.

For many of us, the words self-employed and freelancer are synonymous. But with the German bureaucracy being infamous for its fastidiousness, potential freelancers must understand that these terms mean wildly different things.

Self-employment is a catch-all umbrella term for any income-producing activity that is not conducted while being employed by a company or enterprise. In Germany, this is divided into two broad categories: freelancing and trade (commercial activity). Do note that when people talk about being self-employed in Germany, what they really mean is being a tradesperson (i.e., businessperson or entrepreneur). Many expats and even Germans often get confused about this, but the differences are important to note.

Within the freelancing category, there are further distinctions to be made: Freiberufler vs. Freelancer (Freier Mitarbeiter). In Germany, when people say “Freelancer”, they are usually referring to the second group, the “Freie Mitarbeiter”. Examples from this group would be marketing consultants, graphic designers, web designers, and copywriters. If you are a budding freelancer in Germany, then the tips in this article would be most helpful to you.

Why are these terms so important to understand? That’s because in Germany, you need to apply for specific permits or visas before you undertake any kind of business activity. And based on this, the Finanzamt (Tax Office) will classify how you will be taxed. Hence, you need to be able to anticipate how your work status will be regulated.

Decide if the pros and cons of being a freelancer are acceptable to you.

Working as a freelancer in Germany has perks that are the envy of tradespeople.

Key among them is that this is the easiest type of work to get into. You simply need to visit the Finanzamt to apply for a Tax ID and then you can start working as a freelancer. Meanwhile, tradespeople need to go through a few more regulatory hoops to be allowed to work.

Another key perk is being able to charge a higher than average hourly fixed rate or service packages. This means potentially getting a higher income relative to the general population.

Furthermore, freelancers enjoy special tax benefits that are exclusive to them. They are not required to register their business as a trade and hence do not need to pay trade tax. They are also not required to keep accounts and only have to submit a surplus income statement at the end of the year.

The downside to not having to pay trade tax is that freelancers pay a bit more on income tax. Also, you would not be eligible to sell products like books, planners, and merchandise in your capacity as a freelancer. But there is a workaround to that: you can try getting a permit for conducting mixed activities (gemischte Tätigkeiten). This way, you can scale your freelance business with sales from your trade business.

 

2.  Make sure you have a residence permit.

You can work as a freelancer in Germany without restrictions if you’re an EU/EEA citizen or Swiss national. But it’s important to know the requirements for different visa types before starting your freelancing career. You need to have the right permits and paperwork. That said, there are no restrictions on who can work as long as their visa or residence permit is up-to-date.

I started my freelancing journey a bit differently than most people. After getting an MBA from Reutlingen University, I was given over a year to find work. My search started right at the height of the COVID pandemic, so it took a bit of time for things to take off. If you are like me, a non-EU expat with a degree from a German university, you can start working as a freelancer right away with the jobseeker visa that you are granted. So here’s a top tip: try to get your second degree in Germany and then start your freelancing journey from there.

 

3.  Register with the Tax Office.

To register as a self-employed freelancer in Germany, it is important to file your application with the proper authorities.

You can either download and fill out an original form called “Fragenbogen zur steuerliche Erfassung” (Questionnaire for Taxation) and submit it to your local tax office. Alternatively, you can complete the form online through ELSTER (a German version). The forms need to be filled out in German. Take your time to complete them so that when you submit them, all the details match up correctly.

Should you choose to get in touch with the Tax Office yourself, have the following information on-hand:

  • Your Tax ID
  • Description of your freelance activity
  • Details of your German bank accounts (both personal and business)
  • Estimated business revenue and expenses
  • Estimated profit
  • Whether you wish to charge VAT

Based on the answers you provide, the Tax Office is going to determine whether or not you are a freelancer. They will issue a Tax Number (different from a Tax ID), which you will need to quote in your invoices and on your tax returns. If you request a VAT number, that will be provided as well.

And with all this, you are well on your way to being your own boss. Working as a self-employed expat freelancer in Germany is a daily challenge, but the rewards are great. So what are you waiting for? Apply these tips today and open up a new world of possibilities with a freelancing career in Germany!

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Money Transfer firm agrees with FCA after payment failures

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Money Transfer Firm fails to pay thousands to customers
Emptied wallet: customers sending money via Trans-Sending Limited (LCC) didn’t have funds paid in

Payment services firm Trans-Sending Limited (LCC), also known as Small World Money Transfer, Express Funds, and Global Link, among other branding names, has officially closed to new business and stopped accepting funds from customers following action from the Financial Conduct Authority (FCA) in the UK.

As reported by Euronewsweek over the weekend, the company, until recently, was offering money transfer services to over 180 countries. Launched in 2005, Trans-Sending Limited (LCC) had offices in Belgium, Brazil, Canada, Chile, Congo, Côte d’Ivoire, France, Germany, Ireland, Italy, Mexico, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the UK, and the US.

The FCA invited LCC to sign a formal agreement in which the company pledged to remain closed to new business and stop accepting funds from existing customers. However, the link to send money remained live on the Small World Money Transfer (LCC) portal over the weekend, days after the agreement was signed between the money transfer company and the British Financial Conduct Authority.

Across Spain, the UK, Switzerland, and other European countries, many customers are facing issues accessing funds they have recently paid in.

“Since June 10th, Small World LCC has given me many different versions of what is happening. Mostly, they say they don’t know when they will return the money I have sent,” says Vianela Custódio, who lives in Spain and has used the company before, despite previous delays in payments being completed.

“All Small World offices have been closed for days, and they do not answer the phone. They say they have laid off all their employees and the company has closed. We are very afraid because we sent € 9,000 Euros on June 7th to purchase a land in the Dominican Republic to build a family home for my daughters. Now, we are days away from losing the money that had been given as a deposit in advance to the vendor for the purchase of the area. We face losing all our savings,” says Vianela, who plans to start legal proceedings against the collapsed company soon.

Another former customer of Small World LCC also shared with Euronewsweek about her struggles trying to recover money sent with the company.

“It has been over a week, and the €800 I sent to Brazil to help my son with his university costs and general maintenance hasn’t arrived,” says worker Nara Baracho, who lives in Switzerland.

Trans-Sending Limited (LCC) also operated under the names Swiss Transfers, UNO, Bayba (UK), and Universal de Envíos, resulting in thousands of customers in Europe being impacted by the sudden closure of the business. On Friday, June 14th, customers going to physical branches in England, Italy, Spain, and Switzerland encountered a “Suspension of Services” message affixed to Small World LCC’s closed doors, informing them that the company would not be able to make payments.

Student Jennifer Cortegana, who lives in Peru, has been waiting for funds sent by her father, a transportation worker based in Spain, since June 7th. “The money is intended to pay for my university and health bills. He used Small World LCC before and had no problems. Now they don’t respond to any form of contact. Their offices are closed, and they do not respond to calls or emails,” worries Jennifer.

Customers turned up and found all Small World LCC branches closed

“The week before last, I used a Small World LCC branch in London to send £210 to Brazil to help with the purchase of tickets for family members to visit me. On Wednesday, after many days without the transaction being completed, I returned to the same location and was informed about a delay in the system and assured that funds would be available shortly,” says auto paint technician Adilson Mamede, another victim of Small World LCC. When he returned to the branch once again, the location was closed, and he has not received his money, refund, or any communication from the company to date.

The closure of Trans-Sending Limited (LCC) comes a few months after the company was fined £139,500 by the Financial Conduct Authority (FCA) in the United Kingdom for breaching competition rules alongside two other transfer firms. 

In that case, the British regulator found that Small World, Hafiz Bros, and Trans-Sending Limited (LCC) coordinated on certain exchange rates offered to customers in Glasgow for converting pounds to Pakistani Rupees when transferring money. 

Since June 14th, Euronewsweek  has made several attempts to get hold of a Trans-Sending Limited (LCC) representative to get an update on whether customers will be refunded. All their phone numbers available for customer service, as well as individual branches in the United Kingdom, Spain, Switzerland, and Italy, are not answering.

Contacted via LinkedIn, Rana Shahzad, Head of Sales, UK & Ireland at Small World Financial Services replied stating “Unfortunately, we don’t have any instructions with regards to communications. It is best to keep trying the numbers that you are.”

Euronewsweek also reached out twice to Equistone Partners, one of Europe’s leading mid-market private equity firms, which invested in Small World Financial Services back in 2018 – but received no reply from its UK office.

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Thousands left without money after Small World LCC ceases trading

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Migrants looking at a closed branch of Money Transfer Small World
Customers look at a notice of suspension of services at a Small World LCC branch in London

“Every month I send €800 to help my son with his university costs and general maintenance. It has been over a week, and the money hasn’t arrived yet,” says Nara Baracho, a Brazilian migrant who works at an industrial laundry in Switzerland.

Nara is one of thousands of customers across Europe who, this week, were taken by surprise by the suspension of services of Small World (LCC), a money transfer company operating since 2005 with offices and presence in Belgium, Brazil, Canada, Chile, Congo, Côte d’Ivoire, France, Germany, Ireland, Italy, Mexico, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the UK, and the US.

“I have used them for over 13 years and it is regrettable that they left so many people without their money. Earlier in the week I tried to contact Small World by email and received a message saying that my message had been blocked,” explains Baracho providing a screenshot of the message received as proof.

A popular money transfer service among migrants, until recently Small World LCC offered money transfer services to over 180 worldwide destinations. In 2018, the company generated revenues in excess of £110m.

On Thursday, June 14th, however, a “Suspension of Services” disclaimer was posted on the Small World website, informing customers of recent changes and that the company had stopped accepting any new customers or agents, as well as sending money abroad.

“We want to tell you about some important changes at Small World.

From now, Small World has stopped accepting any new customers or agents, accepting funds or making payments for existing customers through all channels, including any of its agents, branches, web sites or mobile applications.

If you ask us to make a payment, we may not be able to make that payment. Where we have already sent the funds to a bank or other third party that we use to deliver the funds to the person you are trying to pay, it is possible that the bank or third party has paid the funds to your recipient or will do so in the usual timeframes.”

Customers going to physical branches in England, Italy, Spain, and Switzerland also encountered similar messages affixed to Small World LCC closed doors. The announcement was not 100% true: throughout June 14th, Small World LCC still had the send money button fully active, hours after the company started to inform customers of service suspension, even if most of the site was already with limited access.

For Marbel Luz Carrillo, a Colombian who lives in Barcelona, Spain, that timeframe has long passed. The worker used Small World LCC on Saturday, June 8th to send funds to help relatives to make home repairs – a week later, Marbel is still awaiting any response regarding whether her family will receive the money sent.

“I have been here in Spain for 24 years, and on many other occasions I have sent money through this company (Small World LCC) without any issues. I am surprised that this is happening because, in my opinion, they were one of the best companies for sending money abroad,” says Luz Carrillo, expressing disappointment. She is currently without work and has used funds from her severance pay to help her family back home.

“I will continue to insist that Small World LCC return the money sent to me or make the payment in my country (Colombia). If not, I will file a complaint for scam with the competent authorities here in Barcelona,” says Mabel.

Another victim of Small World LCC this week is auto paint technician Adilson Mamede. Last week, he used a branch located in London to send £210 to Brazil to help with the purchase of tickets for family members to visit him. On Wednesday, after many days without the transaction being completed, Adilson visited the same location and was informed that the delay was due to technical issues with Small World LCC’s database and that the money would be available shortly at the intended destination. After 48 hours passed without any updates from the money transfer company, he returned to the branch, but this time, it was closed with several posters announcing the end of activities. He never got his money back.

Jennifer Cortegana, a student who lives in Peru, has been waiting for funds sent by her father, a transportation worker based in Spain, since June 7th.

“The money is intended to pay for my university and health bills. He used Small World LCC before and had no problems. Now they don’t respond to any form of contact. Their offices are closed and they do not respond to calls or emails,” worries Jennifer.

A Brazilian model who preferred to stay anonymous used Small World LCC for the first time last week in Italy, where she lives. The money sent to help her family in Brazil has never arrived, either. “I made the deposit via Small World on June 8th and was informed that it would be in the beneficiary’s account the next business day. The store is now closed, and the money has not been sent to my family,” says the freelancer professional, who managed to contact Small World LCC customer service but was informed that “there were some technical errors in the system, and there would be no date for returning to normal activities.”

Customers affected by Small World LCC payment delays are now getting together to try to recover their cash. Groups have been created on social media platforms such as Facebook and Telegram. The goal is to sue the company collectively for breach of contract.

Euronewsweek has reached out to Small World LLC using its telephone number available for customer service, as well as individual branches in the United Kingdom, Spain, Switzerland, and Italy. Calls are being forwarded to voicemail, but no feedback or return calls are being carried out. Calls to the Small World LCC headquarters in Blackfriars, London, are being answered with a recorded message informing customers that the company is no longer accepting new registrations or making money transfers, and giving callers an email that is being answered with an automated message informing people how to track the status of their transactions.

The suspected collapse of Small World comes a few months after the company was fined £139,500 by the Financial Conduct Authority (FCA) in the United Kingdom for breaching competition rules alongside two other transfer firms. In that case, the British regulator found Small World, Hafiz Bros and LCC Trans-Sending coordinated on certain exchange rates offered to customers in Glasgow for converting pounds to Pakistan Rupees when transferring money. 

Euronewsweek also reached out to Equistone Partners, one of Europe’s leading mid-market private equity firms, which invested in Small World Financial Services back in 2018 – but we had no reply from its UK office.

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Biggest hotel complex in Finland open its doors

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Biggest hotel complex in Finland open its doors
With a total of 37 500 square meters the hotels will offer 716 guest rooms in Helsinki

After almost three years of construction, Clarion Hotel Helsinki Airport and Comfort Hotel Helsinki Airport could finally open the doors to the biggest hotel complex in Finland.

With a total of 37 500 square meters, 716 guest rooms, 21 meeting rooms and a huge 826 m2 banquet hall, it is the largest hotel operation in Finland which has now opened right at the terminal of Helsinki Airport.

Combining two different brands and concepts under the same roof, Clarion Hotel Helsinki Airport and Comfort Hotel Helsinki Airport will cater for all kinds of travelers, travels, conferences and events.

“I am so happy to welcome our first guests to this big and beautiful hotel. The Clarion Hotel brand is already recognized as a meeting and event specialist in the Finnish market and with this hotel, we further emphasise this. Clarion Hotel Helsinki Airport will put the Finnish capital higher on the European list of conference destinations and make Vantaa a more attractive area for the Finnish market,” says Tarja Jeskanen, General Manager at Clarion Hotel Helsinki Airport.


The hotel has a rooftop terrace and the Finnish premiere of the restaurant concept NÒR, a modern brasserie with Nordic culinary traditions influenced by the best tastes from Europe. Here you can also enjoy a cocktail overlooking the runway.

In addition, there is a well-equipped gym, and a wellness area with an outdoor plunge pool, steam bath and of course a Finnish sauna.

“This is a huge step for Strawberry in Finland. By adding this jumbo hotel to our portfolio, we clearly state that we are serious about our ambitions to grow massively in the Finnish market. Our recently published projects in Turku and Hyvinkää show our plans stretch beyond Helsinki, but to achieve them, we need a strong foundation like the one we have in place with both our city hotels and the cluster with these two new hotels together with Clarion Hotel Aviapolis and the rebranded Comfort Hotel Xpress Helsinki Airport Terminal,” says COO of the Finnish operation in Strawberry, Erika Ehrnrooth.


Comfort Hotel and Comfort Hotel Xpress are new brands in the Finnish market. Both of them are centered on giving the guests what they need and offer what they want on individual demand. Whilst Comfort Hotel Helsinki Airport will offer their guests the same upscale breakfast as their sister hotel in the same building, the rebranded Comfort Hotel Xpress Helsinki Airport Terminal has breakfast options available, but not included.

Comfort Hotel Helsinki Airport and Clarion Hotel Helsinki Airport share the same roof and will cooperate tightly. In total, the hotels can welcome more than 1500 guests, and together with the Comfort Hotel Xpress Helsinki Airport Terminal and Clarion Hotel Aviapolis, the total capacity will make Vantaa Finland’s best conference and event area.

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