German law is characterized by a wide range of forms of organization and conduct of your own business. Ample opportunities are open to both large investors and small entrepreneurs. Even those whose services are not a business from a professional point of view can open a private practice. Such people in Germany are called freiberuflers - representatives of the liberal professions. The liberal professions in Germany, due to their special status, have many advantages for registration and practice.
What are "liberal professions"
Not everyone can become a freiberufler. According to § 1 of the Partner Companies Act (Partnerschaftsgesellschaftsgesetz - PartGG), these are persons who, with special professional qualifications or creativity, offer customers and the public an independent and substantive provision of services of a more complex type. A similar interpretation of the concept is given by the Bundesverbandder FreienBerufe (BFB), defining the services of the self-employed as “intellectual and ideological”.
In addition, the concept of freiberufler can be found in § 18 of the Income Taxation Act (Einkommensteuergesetz, EStG), according to which the activities of freiberuflers include independently performed scientific, artistic, teaching, educational and other professional activities of the persons listed in the paragraph.
We are talking about "free" professionals with a diploma of higher education, corresponding to high qualifications and work experience in their field. The key point of their activity is precisely the provision of services, and not the production and sale of a product.
Freier Beruf professions
It should be noted right away that there is no closed exhaustive list of professions that are considered definitely free. This is mostly due to the rather vague status of self-employment (Freier Beruf): it is rather difficult to determine the boundaries between self-employment and other types of individual labor and economic activities - independent work, fishing activities, individual entrepreneurship.
When it comes to disputed cases, the local tax authority (Finanzamt) makes a specific decision to classify the activity as freier beruf at registration. The main criteria for attribution to a profession are:
- availability of professional qualifications - we are talking about the availability of a qualifying exam, without which the specialist will not be allowed to the profession;
- personal performance of services (the use of hired labor as assistance is not prohibited);
- own responsibility for the results of the services provided;
- technical independence;
- provision of services of a higher level.
Although there is no specific catalog of freiberwlers, an indicative list of liberal professions is still indicated in § 1 PartGG and § 18 EStG. However, the laws are more likely about professions that a priori can receive the status of free, creativity and professionalism of which cannot be questioned.
In general, the German legal, financial and tax practice classifies the following professions as free.
| Medical professions | Law and Economics | Creative professions | Journalism | Educators | Engineering and other professions |
|---|---|---|---|---|---|
| Therapist | Notary | Designer | Journalist | Teacher | Engineer |
| Dentist | Advocate | Dancer | The reporter | Educator | Architect |
| Veterinarian | Patent attorney | Singer | Interpreter | Social educator | Chemist |
| Pharmacist | Musician | Historian | Assistant professor | Biologist | |
| Speech therapist | Other lawyers | Actor | Tutor | Geographer | |
| Orthopedist | Director | Surveyor | |||
| Obstetrician | Accountant | Operator | Pilot | ||
| Masseur | Economist | Photographer | Pilot | ||
| Nutritionist | Tax submit. | Writer | |||
| Nurse | Painter | ||||
| Nurse | Consultant | ||||
| Pediatrician | |||||
| Surgeon | |||||
| Naturopath | |||||
| Other doctors |
Legal forms of carrying out activities
In addition to being self-employed, freiberwers can associate with other self-employed people to create professional partnerships and societies. It is allowed to form such associations:
- A society based on a shared office or praxis. The simplest form of combining freiberwlers, limited to placement in a common work area, using common equipment or the work of common employees. The purpose of such a combination is to save on labor organization costs. Each of the members of the association carries out his work independently.
- Partner company. A partner company or partnerschaftsgesellschaft (PartnG), created on the basis of a partnership agreement signed by the parties and registered in a special register. Assumes mutual participation of self-employed in the activities of the organization.
- Civil Society (GbR). An association of individuals wishing to conduct joint professional activities within the framework of which they have an agreement.
- Freiberufler-GmbH. A mixed form of self-employment and business, involving the creation of an enterprise in the form of an LLC.
Mandatory requirements for freiberwers
One of the main requirements for the vast majority of liberal professions is membership in a professional chamber. So, all representatives of medicine who want to become freiberuflers must become members of the Medical Chamber, lawyers - the Legal Chamber, notaries - the notary.
The professional chambers are a kind of trade union: they are called upon to defend the professional interests of their members at the political and communal level, while at the same time performing supervisory functions in relation to their professional activities.
Given the fact that a number of liberal professions bear increased public responsibility (doctors, notaries, lawyers), they need more control from the chambers than others, and therefore membership in professional chambers is mandatory for them.
The second mandatory requirement for the majority of self-employed is a special high qualification, which can only be confirmed by documents on higher or other professional education. Such documents must be presented to the leadership of the chamber, only after which the specialist can become its member.
Those freiberuflers, for whom participation in professional Chambers is not mandatory, present such documents at the place of request. In addition, they can become members of the chambers on a voluntary basis. By the way, a number of professions do not provide for a qualification document at all, for example, a writer, business consultant or a photographer.
Restrictions on advertising
Among other things, for the liberal professions, German law defines some restrictions in terms of advertising their own activities. The use of advertising for a freiberfler is permissible only if it directly affects his activities, for example, when he opens a private practice, goes on vacation, liquidates his own practice for other reasons.
Presentation of your business through commercial advertising should not distort the perception of potential clients about it. For example, doctors' ads may contain only substantive information about the practice's activities and its functions, without explicit advertising information (for example, regarding discounts, promotions or prices).
In addition, the distribution of information letters for a limited circle of clients is considered permissible: for lawyers, for example, this is information about changes in legislation.
In any case, it is recommended to consult a specific professional chamber regarding advertising, since for violation of these requirements liability is provided: a warning and a fine.
Features of registration and payment of taxes
A prerequisite for the work of freiberuflers is their registration as a freelancer in the Finanzamt at their place of residence. For such registration, in turn, it is mandatory to obtain permission to work independently in your professional Chamber.
The deadline for registering with the tax authority is 4 weeks from the start of self-employment. There are no registration fees in 2021. As part of the registration, the freiberfler will have to fill out a questionnaire, assess the expected turnover and the potential for profit.
Like all individuals, freiberuflers are required to file a tax return, on the basis of which they pay the approach tax. Note that the German personal income tax (Einkommensteuertarif) operates at a progressive rate depending on the profit received: from 15 to 42%. Taxable income is reduced by the amount of professional expenses. When calculating the tax, marital status, number of children, unforeseen expenses and other benefits are taken into account. To learn more about this, the article titled "Taxes in Germany" will help.
Insurance premiums for self-employed
Like all individuals and entrepreneurs, individuals in the liberal professions can and sometimes are required to participate in social security programs. Since they work for themselves, they are responsible for making insurance payments. At the moment, such insurance areas are relevant as:
- Pension insurance. Mandatory only for certain professions (orderlies, educators, nurses, artists). Doctors, lawyers, notaries and speech therapists are not subject to compulsory insurance, but they can contribute voluntarily.
- Medical insurance. With the exception of artists and writers, freiberflers are not subject to compulsory insurance. However, they are required to purchase private health insurance.
- Accident insurance. Freiberuflers are insured against accidents related to professional activities in the respective trade unions. This is mandatory only for some professions.
- Unemployment insurance.
- Unemployment insurance is voluntary and for freiberwlers, according to §28a SGBIII, can be obtained from the local employment office.
Liquidation of Freier Beruf
The procedure for liquidating a legal form of activity is as simple as registration. To do this, you need to contact the tax authority again, fill out the appropriate form, submit a declaration and close the practice. In addition to formal procedures, a former freiberfler needs to:
- terminate all previously concluded contracts with clients, contracts for the lease of premises, employment contracts with hired employees, and so on;
- report the closure to insurance funds;
- notify the professional Chamber;
- close bank accounts opened for professional activities;
- preserve all bookkeeping, business correspondence and other archival documents - storage period is 10 years.
From this point on, the former freiberwer should be considered unemployed, and now he can register with the local employment center (Arbeitsamt).
Other forms of doing business in Germany
It should be borne in mind that work in a liberal profession is, albeit a special, but the smallest organizational and legal form of running your own business in Germany. In addition to her, individuals can realize their entrepreneurial ambitions by organizing:
- Personal associations and partnerships. In order to achieve economic goals, individuals and legal entities can participate in them, who will be responsible for the obligations of an organized enterprise not only with the size of the contribution, but also with personal property. The most common forms are: civil partnership (GbR), open trade partnership (OHG), limited partnership (KG).
- Capital societies. We are talking about the creation of enterprises-legal entities based on the pooling of investors' capital. These are more complex organizations, in particular, a limited liability company (GmbH), a joint stock company (AG).
- Private enterprise. Another simple form of business organization for non-freiberwellers is self-employment (Einzelunternehmer).
Business immigration
Germany is interested in proactive people and therefore is ready to attract young entrepreneurs to carry out economic activities on its territory. In particular, according to § 21 of the Act on Residence, Employment and Integration of Foreigners (Aufenthaltsgesetz, AufenthG), the migration authorities are allowed to issue a residence permit in Germany to foreigners wishing to start their own business.
A residence permit is issued to potential entrepreneurs for a period of 3 years, after which, in case of success in economic activity, a settlement permit may be issued. A residence permit can be issued if:
- there is an economic need or interest in the development of the type of activity that the entrepreneur is planning to engage in;
- its activity will bring a positive economic effect;
- the candidate has enough own funds to finance his business.
Conclusion
Liberal professions in Germany are one of the forms of self-employment of highly qualified specialists who provide professional services in the field of medicine, law, consulting, creativity, creativity, engineering and a number of other areas. Freiberuflers work for themselves, although the law does not prohibit them from using hired labor. This form of organization has some advantages - for example, in the field of registration and taxation. But at the same time it has some limitations, for example, in the field of advertising.
