Starting your own Business in Germany

Welcome to the English version of the BMWK business start-up portal.


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In recent years, numerous successful companies have been set up by founders with a migration background. Those companies are important for Germany as they provide around 600,000 jobs and training for many young people.

You the entrepreneur

What do you need to consider when starting out in business? Try to find out exactly why you want to be self-employed and whether you really have what it takes to be an entrepreneur. Take the time to discuss matters, for instance, with chamber consultants, with friends who are self-employed and with family members.

Language barries

A good command of German is still important in many areas for anyone starting up in business here in Germany. How else can you use all of the information that is so important when preparing to go into business? How can you get to know your market if you are not able to understand information provided in German? Check whether your command of German is sufficient and, if not, attend a German course. There are various ways to learn German and improve your proficiency. More information is available here.

Personal Qualifications

The key to the success of your going into business is mostly your skills and what you have learnt, i.e. your professional qualifications and ability. Check whether your qualifications are recognised in Germany. To find out more, go to: Recognition in Germany.

Commercial skills

Being an expert who has a good idea or new product will not automatically make you a good entrepreneur. That's why you should make use of the courses and training programmes for people starting out in business which are on offer, for instance, from the Chambers of Industry and Commerce (Industrie- und Handelskammern IHK) and the Chambers of Skilled Crafts (Handwerkskammern HWK).

Arbeit und Wirtschaft: Starting a business – General formalities

Types of new Business

Self-employed people are either business people (Gewerbetreibende) or members of the liberal professions (Freie Berufe). Different rules apply to these two categories.


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Business people

A business (Gewerbe) is (almost) every kind of self-employed activity that allows you to earn money. For instance, traders, caterers, craftspeople or producers of goods are business people. On the other hand, people who work on a self-employed basis in one of the liberal professions, agriculture or forestry are not classed as business people.

You should also make note of the following:

  • Contact the Chamber of Industry and Commerce (Industrie- und Handelskammer IHK) or the Chamber of Skilled Crafts (Handwerkskammer HWK) to find out whether you need a permit or licence or if you need to sit an exam in your specialist skill.
  • If you are planning an activity in the skilled crafts or a related sector, you will need to be registered in the Trades Register or in the register of activities similar to skilled crafts at the Chamber of Skilled Crafts.
  • Once you have all the required documents, register your company with the Trade Office in the city where you want to start your business. The Trade Office will inform all the other relevant authorities (e.g. Tax Office, accident insurance fund, local court).
  • Membership in the Chamber of Industry and Commerce or the Chamber of Skilled Crafts is mandatory.

Liberal professions

It is not always easy to know which profession really belongs to the liberal professions (Freie Berufe). The liberal professions include, for instance:

  • Healthcare professions: doctors, dentists, vets, non-medical practitioners, physiotherapists
  • Legal, tax and business advisory professions: attorneys, patent attorneys, notaries, accountants, tax consultants or business consultants
  • Scientific/technical professions: surveyors, engineers, architects
  • Linguistic and information-transmitting professions: journalists, image-based reporters, interpreters, translators

If you are not certain whether your activity is one of the liberal professions, we advise that you contact the Institute on Liberal Professions (Institut für Freie Berufe) or the Tax Office.

You should also make note of the following:

  • The activity is what counts, not the qualification. An architect running a construction company or a lawyer heading up a temping agency will not normally be considered to be a member of the liberal professions.
  • Ultimately, the Tax Office decides whether your activity is classed as a liberal profession or a commercial activity.
  • Freelancers do not register with the Trade Office, just with the Tax Office which provides them with their tax number.
  • Members of the liberal professions do not pay trade tax.
  • Some liberal professions require membership in their respective chambers. Also, a number of liberal professions have to observe special rules of their profession. To find out if the qualifications which you acquired in your home country meet with these requirements, please go to: Recognition in Germany.

Arbeit und Wirtschaft: Starting a sideline business

Requirements under Residency Law

The preconditions that apply when starting up a business in Germany also depend on your nationality.


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Nationals from an EU member state (or from an EEA country or Switzerland)

Labour mobility and freedom of trade apply within the EU member states as well as the EEA countries and Switzerland. EU citizens who wish to move to a member country do not require a residence permit and may set up a business in any of the member states. However, there are some exceptions. More detailed information regarding this can be found on the website of the Federal Office for Migration and Refugees.

Nationals from a non-EU country

Nationals from a non-EU country wishing to enter Germany in order to engage in a self-employed activity are required to apply to the respective foreign mission of the Federal Republic of Germany for a residence permit for the purpose of self-employed commercial activity.
Under certain circumstances, foreigners who are already resident in Germany and who have received a residence permit for a purpose other than self-employment can engage in self-employed activity. More information about this can be found on the website of the Federal Office for Migration and Refugees.

IHK Berlin: Residence title to start your own company in Germany

Planning your start-up

How can you transform your business idea into reality? This is the question you need to answer in your business plan.


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More importantly, you will also explain what's new and special about your endeavour. You should also emphasize how your products or services benefit customers. You should explain in detail the costs of your product or service and the price at which you intend to offer them.

Make it clear how your product or service is different from that of competitors. State who you think will buy what you have to offer, explain your choice of location and how your product (your service) is to be marketed.

Further information:

Your business plan

The "Unternehmerwerkstatt Deutschland" offers Germany’s first free English digital platform to work on your business and financial plan.

Arbeit und Wirtschaft: Business plan – Written section

Arbeit und Wirtschaft: Business plan – Financial section

Advice and Information

Before setting up your company, you should get as much advice and information as possible. Find out about the support that is provided, sometimes free of charge, by public and private institutions to people starting out in business.

Anlaufstellen und Programme

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Advisory services

Chambers of Industry and Commerce (Industrie- und Handelskammern IHK)

General advice on all matters related to starting up in business (free). The address of your nearest Chamber of Industry and Commerce can be found on the website of the German Association of Chambers of Industry and Commerce (Deutsche Industrie- und Handelskammer).

Chambers of Skilled Crafts (Handwerkskammern HWK)

General advice on all matters related to starting up in business (free). The address of your nearest Chamber of Skilled Crafts can be found on the website of the German Confederation of Skilled Crafts (Zentralverband des Deutschen Handwerks).

Project "Wir gründen in Deutschland"

The website of the project "Wir gründen in Deutschland" provides support to both foreign students and academics in Germany, as well as professionals who live abroad, who want to start a business in Germany. If you have any questions or don't fully understand something, there are people who you can contact – either by telephone or email – to assist you further. The website is available in different languages, e.g. German, English, Ukrainian, Russian, Chinese, Polish and Turkish.


Through the federal government's financial support programmes, KfW supports people starting up in business and especially small and medium-sized enterprises. Go to the KfW website for more information about these business support programmes.

Federal Employment Agency (Bundesagentur für Arbeit)

The Federal Employment Agency provides lots of information about living and working in Germany. Further information can be found on the website of the Federal Employment Agency.

Institute on Liberal Professions (Institut für freie Berufe)

You would like to start a business, e.g. as a coach, a consultant, lawyer, doctor, engineer, alternative practitioner, artist or journalist? The Institute on Liberal Professions is one of the leading research institutes and consulting institutions for liberal professions in Germany. It offers individual start-up advice, specialized workshops and seminars, accompanied coaching for professionals and a wide range of information for company founders. Further information can be found on the website of the Institute on Liberal Professions.

Network "Integration through Qualification" (iQ)

The Network "Integration through Qualification" (iQ) works to improve employment opportunities for people with a migration background. One objective is to ensure that professional qualifications acquired outside Germany more frequently lead to employment appropriate to one’s level of education, regardless of residence status. Furthermore it provides business start-up information for foreigners with a residence permit. Further information can be found on the website of the Network iQ.

Project "Handbook Germany: Together"

The project "Handbook Germany: Together" offers answers – from A to Z of life in Germany in articles, videos and podcasts, all on the information platform In nine languages the website provides essential tips on work, residence law issues, housing, health and vocational training, child care, studying and much more. For further case-specific questions, there is the community platform Together in Germany.

Make it in Germany – Working in Germany: the official website for qualified professionals

The federal government’s portal "Make it in Germany" offers a wide range of information on the subject of immigration. There, migrants can find, for exmaple, information on the topics of visas for starting a business, looking for work, recognition, etc. The portal also contains (initial) references to information sources/advice centers on the subject of starting a business.

Business advice

Business consultants can offer in-depth advice on business management matters (concept, marketing, organisation, controlling, etc.). Addresses can be found on the following websites:

Tax advice

Tax consultants provide assistance on issues relating to tax law, business management, and in choosing the correct legal structure. The addresses of tax consultants can be found on the websites of the German Federal Chamber of Tax Consultants or the German Association of Tax Advisors.

Legal advice

Lawyers and notaries provide assistance, for example, in matters related to legal structure and contract issues (legal structure, purchase contract, etc.). The addresses of lawyers and notaries can be found here:

Professional associations

A number of professional associations, e.g. the German Association of Consulting Engineers, German Association of Journalists, etc. offer various forms of support, such as start-up advice, publications and profession-related information.


How much money do you need for your start-up? Many people starting out in business calculate with too tight a budget and then run out of money halfway through either because business didn't go as well as they had hoped for or due to some other unexpected event. You should always include a buffer in your financial planning.

Neu gründen oder übernehmen - viele Wege, ein Ziel

© Getty Images/Maskot

Equity requirement?

How much money can you invest in your project? If you are setting up a small office or a small company, you may even be able to finance it by yourself. In most cases, however, you will need to borrow money. And this is usually not possible without equity. After all, nobody should rely entirely on third-party financing and you will not be able to find anyone who will lend you money if you yourself are not willing to invest a reasonable amount of your own money in your project. If you do not have enough money to get your business up and running, you should look for other sources of finance as soon as possible. As a rule, start-up financing is made up of a government assistance loan, a bank loan and the founder's equity.

What about collateral?

Every investor will, of course, want security in case the borrower is not able to pay back the loan. In the case of bank loans, collateral is required. This can be cars, securities or real estate. Even public loans may also require that a certain percentage be secured by collateral. However, when it comes to collateral, there are some things you should remember. Using the home in which you live as collateral could be a problem. The same applies to life insurance policies for when you retire.

Support and subsidy programmes

The federal government, federal states and the European Union offer support programmes to assist people starting out in business. This support usually comes in the form of loans. Public loans typically come with low interest rates, long terms and often with a redemption-free period before you begin repaying the loan. Financing programmes are for example the My Micro-loan (Mein Mikrokredit) (information only available in German) or the financing porgramms of the KfW.

Furthermore the EXIST Business Start-up Grant supports students, graduates and scientists from universities and research institutes who want to turn their business idea into a business plan. The start-up projects should be innovative technology or knowledge based projects with significant unique features and good commercial prospects of success.

More information and advice can be found at:

  • BMWK support database (information only available in German)
  • Financing hotline of the BMWK
    tel +49 30 18 615 8000
    Monday to Friday from 8am to 6pm
  • KfW information centre
    tel +49 800 539 9001 (toll free in Germany)
    Monday to Friday from 8am to 6pm

Arbeit und Wirtschaft: Finance, support and subsidies

Formalities and public authorities

Before you launch your new company, you will need to deal with a few formalities.


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Trade Office (Gewerbeamt)

People who want to set up a trade business are required to register their project with the Trade Office (Gewerbeamt) in the municipality in which the business is to be established.

To do this, you will need:

  • A valid ID document or passport
  • Depending on the activity (e.g. catering), a permit or approval
  • A crafts card if you are planning to set up a business in the skilled crafts sector
  • A trade card for activities similar to those in the skilled crafts sector
  • A residence permit that also allows you to pursue a self-employed commercial activity
  • Between ten and forty euros for the registration fee
  • A police clearance certificate or information from the Central Commercial Register may be required.

You should describe the commercial activity in as much detail as possible. There are also rules that apply to the description of your company. Business registrations usually take just a few days to be processed. Freelancers do not have to register with the Trade Office, but contact their Tax Office directly.

The Trade Office automatically notifies the following authorities where you must also be registered:

  • Tax Office (Finanzamt),
  • your trade association (Berufsgenossenschaft),
  • the Chamber of Industry and Commerce (Industrie- und Handelskammer IHK) or the Chamber of Skilled Crafts (Handwerkskammer HWK),
  • the local court (Amtsgericht) or registry court (Registergericht), (the commercial register (Handelsregister) is kept there)
  • the trade supervisory office (Gewerbeaufsichtsamt), which is responsible for the occupational health and safety of your employees and customers, checks, for instance, ovens, beverage dispensers, etc..

What you need to know before you go to the Trade Office:

  • What kind of business do I want to start?
  • Do I need a permit (approval, license)?
  • Where will I set up my business?
  • Which legal structure will my business have?

Tax Office (Finanzamt)

As someone setting up a business, you will automatically receive the "Questionnaire for tax registration" (Fragebogen zur steuerlichen Erfassung) from your Tax Office (Finanzamt) after you have registered your business.

As a freelancer starting out in business, you will have to contact the Tax Office yourself. You will have to complete the questionnaire, providing details of your future sales and profits. Please be careful when completing this questionnaire and provide a realistic estimate of your expected sales and profits.

Chamber of Industry and Commerce (Industrie- und Handelskammer IHK)

All domestic companies in Germany (with the exception of the skilled crafts, the liberal professions and farmers) are members of a Chamber of Industry and Commerce (Industrie- und Handelskammer IHK). They offer an extensive range of consultancy services and seminars for members and advise people starting out in business.

For certain professions, the chambers also offer examinations in subjects and skills that are required in order to obtain a licence for a profession, e.g. in the taxi or car rental sector or for the hotel industry.

Membership with the Chamber of Industry and Commerce is required by law and a membership fee is charged. Businesses automatically become a member as soon they have been registered with the Trade Office (with the exception of the liberal professions, skilled crafts, agriculture). The founder then receives a letter from their local Chamber of Industry and Commerce containing all the necessary information regarding membership.

IHK24: Chamber of industry and commerce

Chamber of Skilled Crafts (Handwerkskammer HWK)

If you wish to go into business with a skilled craft that requires a licence, you will need an exemption for your registration in the Trades Register (Handwerksrolle) at the Chamber of Skilled Crafts (Handwerkskammer). You can find an overview of the skilled crafts that require a license as well as detailed information on the Federal Portal.

If you wish to work exclusively across the border (i.e. while having your place of business in your home country), you will not have to be registered in the Trades Register, however, you will require an exception issued by the Chamber of Skilled Crafts.

The chamber must confirm that you meet the relevant preconditions in order to perform the skilled craft in question in Germany. In order to receive such a certificate from the Chamber of Skilled Crafts, you will have to provide proof of the type and duration of the profession carried out by you in your home country.

You are not required to provide proof of work experience if you can provide a certificate of competence that meets with the European guidelines for the recognition of certificates of competence (e.g. a diploma or examination certificate). If you wish to pursue a skilled craft in the health sector, you will always need such a certificate of competence. Work experience alone is not sufficient.

Health insurance (Krankenversicherung)

You should notify your health insurance company (Krankenversicherung) that you are about to become self-employed. They will first check whether this is a full-time activity and your contribution payments will be then calculated on this basis.

Arbeit und Wirtschaft: Social insurance

Pension insurance (Rentenversicherung)

Please note that for some self-employed activities membership in the statutory pension fund is mandatory. This applies, for instance, to skilled craftspeople, midwives, teachers, artists and publishers. To find out which other professions belong to this category, go to: Gesetze-im-Internet.

Commercial Register (Handelsregister)

The Commercial Register (Handelsregister) at the local court (Amtsgericht) provides the public with information regarding the circumstances of the commercial operations registered there. It provides information regarding who is permitted to represent a company and who is liable.

Business people (Gewerbetreibende) and corporations (Kapitalgesellschaften) (e.g. a limited liability company "GmbH") must be registered in the electronic Commercial Register. Normally, this will be carried out by a notary.

Members of the liberal professions (Freie Berufe) and small businesses (Kleingewerbetreibende) are not registered in the Commercial Register. Small businesses operate facilities with very simply structured, limited and transparent business relationships (information is available from the Chambers of Industry and Commerce).

Chambers of the liberal professionals

Some members of the liberal professions are required to be members of their respective chamber. These professions include, for instance, doctors, chemists, architects and consulting engineers.

Construction Office (Bauamt)

If you wish to use rooms that were previously used for other purposes as your future business facility, you will need to apply for a change in use from the relevant Construction Office. The planning of rebuilding work and new buildings for commercial purposes must also be co-ordinated in good time with the Construction Office.

Public Health Office (Gesundheitsamt)

Depending on which sector you wish to work in, you may need a permit or a clearance certificate from the Public Health Office (Gesundheitsamt/Fachdienst Gesundheit). In the case of start-ups in catering, you must have attended an instruction course by the Public Health Office or a commissioned doctor. This certificate must be submitted when you register your business and should not be more than three months old.

In the case of start-ups in catering or childcare, the Public Health Office or the trade supervisory office (varies from region to region) will also examine the standards of hygiene at your facilities. You will also need a police clearance certificate and confirmation from the Chamber of Industry and Commerce that you have participated in a seminar on hygiene and the handling of food.

Occupational Accident Insurance Fund (Berufsgenossenschaft)

The Occupational Accident Insurance Fund (Berufsgenossenschaft BG) is the statutory accident insurance fund. Anyone who starts up a company should contact the relevant occupational accident insurance fund to find out if they need to take out insurance with this fund.

Entrepreneurs who do not employ staff are not always required to contribute to this fund. Voluntary insurance with the occupational accident insurance fund can, however, make sense because this will protect you against the consequences of work accidents and occupational diseases. You can find a list of occupational accident insurance funds at: German Social Accident Insurance.

Employment agency (Agentur für Arbeit)

If you are receiving unemployment benefit I and wish to apply for a start-up grant, you will have to contact your employment agency (Agentur für Arbeit). Recipients of unemployment benefit II can contact their local provider of basic benefits for job-seekers (Träger der Grundsicherung für Arbeitsuchende) (job centres) to receive the integration grant for becoming self-employed.

If you were previously employed in Germany and have paid into the social insurance scheme, you can apply to the job centre to continue to be insured in the unemployment insurance scheme [Arbeitslosenversicherung] within the first month of your self-employment.

If you employ people in regular jobs, in so-called 450-euro jobs or as trainees, you will need a company number. You can apply for this 8-digit number at the company number service at the Federal Employment Agency. This number is used to register and de-register employees and to settle contributions to the health, pension and unemployment insurance schemes.

Legal structures

A legal structure is like the solid backbone for your company. You can choose between different legal structures.


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Sole proprietorship (Einzelunternehmen)

If you open a business alone, either as a business person or as a freelancer, this automatically means sole proprietorship. It is easy to establish a sole proprietorship. This is carried out when

  • business people register their commercial activity with the Trade Office
  • freelancers apply to the Tax Office for a tax number

As a sole proprietor you are fully liable with all your assets, including your private assets.

You are required to register your company in the Commercial Register (Handelsregister). By registering in the Commercial Register, you assume all the rights and obligations of a merchant. For more details regarding this matter, please contact the Chamber of Industry and Commerce.

Important: Small businesses with simple and limited business structures as well as freelancers who are members of the liberal professions are not registered in the Commercial Register.

Limited liability company (GmbH) or a provisional company with limited liability (Unternehmergesellschaft (haftungsbeschränkt) UG)

A GmbH or UG company is established by at least one shareholder. The UG company is subject to the law that governs limited liability companies. The articles of association for both the GmbH and the UG company must be notarised. The notary forwards the articles of association to the Commercial Register.

The minimum capital requirement for the GmbH is €25,000; the minimum initial contribution for the UG is €1 at the time of its establishment. The UG company is then required to appropriate 25 percent of its profits to a statutory reserve until the required minimum capital of €25,000 has been generated. The UG company can then be converted to a GmbH company.

In this article you will learn more about the topic.

Civil law partnership (GbR)

If you are joining forces with one or more partners, you will automatically form a civil law partnership (Gesellschaft bürgerlichen Rechts) (GbR or civil-code company). A civil law partnership can be established both by business people and by freelancers. There are no special formalities that apply to this kind of company. A written agreement is, however, recommended and there is no minimum capital requirement. All of the partners are liable with their private assets for all of the company's debts (e.g. tax debts). Special rules can be agreed to in the articles of association (internal relationship).

Other legal structures:

  • Kommanditgesellschaft (KG)
  • Offene Handelsgesellschaft (OHG)
  • Partnerschaftsgesellschaft (PartG)
  • GmbH & Co. KG

Your choice of legal structure has financial, fiscal and legal implications. You should certainly first contact a consultant at the Chamber of Industry and Commerce or the Chamber of Skilled Crafts and discuss the matter with your tax advisor. Your choice in favour of or against a particular legal structure is never final. If your company's needs change, you can change its legal structure at any time.

Arbeit und Wirtschaft: Choice of legal structure


You should address the topic of taxes even before you start up your company. Before choosing a particular legal structure, you should consult a tax advisor (Steuerberater) in order to find out about the fiscal implications of your decision.


© Getty Images/JLco - Julia Amaral

You should be familiar with these taxes:

VAT (Umsatzsteuer)

VAT (Umsatzsteuer) is payable when you sell goods or services. The standard rate is 19% and a reduced rate of 7% is applicable, for instance, to professions in the arts and the media. You are required to bill your customers VAT and to state this separately in your invoices. You should take note of the information that is required in your invoices. You are then required to pay the VAT which you receive from your customers to the Tax Office as part of your VAT return (Umsatzsteuer-Voranmeldung).

Input tax (Vorsteuer)

You pay input tax on (almost) all company-related purchases. You should ensure that this tax is stated separately on the invoices which you pay. (Note: Invoices do not use the term "input tax" (Vorsteuer), but "VAT" (Umsatzsteuer).) You can then deduct this input tax (Vorsteuer) from the VAT (Umsatzsteuer) which you pay to the Tax Office as part of your VAT return (Umsatzsteuer-Voranmeldung).

Income tax

Anyone who generates or receives income is required to pay income tax (Einkommensteuer).

The income tax rate depends on the personal profit that you generate with your company (less all of your operating expenses). In the first year of your self-employment, the Tax Office will estimate your profit on the basis of the information you provide. The Tax Office will then determine a certain sum which you will have to pay as quarterly advance payments.

If your income is higher than initially expected, you will have to pay tax arrears the following year. If you have to pay both tax arrears and income tax pre-payments at the same time, you may find yourself in some financial difficulty. You should hence contact your tax advisor to find out whether you can expect tax arrears and how much this will be so that you can put aside money to cover this.

Trade tax

You will be required to pay trade tax every quarter to your municipality. Once a year, you or your tax advisor, respectively, will be required to issue a trade tax return and to send this to the Tax Office.

Corporation tax

Corporation tax (Körperschaftsteuer) is payable solely for the profit generated by corporations (Kapitalgesellschaften) (GmbH, AG). You will be required to pay corporation tax every quarter in advance to the Tax Office (Finanzamt) responsible for your company.

Small entrepreneur regulation

There are a number of rules designed to make business easier for small entrepreneurs.

If you fulfil both of the following preconditions, you will not be required to pay VAT (Umsatzsteuer) to the Tax Office (Finanzamt):

  • your turnover (Umsatz) including payable tax did not exceed €17,500 in the previous calendar year and
  • your turnover (Umsatz) plus payable tax is not expected to exceed €50,000 in the current year.

At the time you establish your business, you should realistically estimate the total turnover you expect to generate. In the year of establishment, the expected total turnover for the current calendar year, including VAT, may not exceed €17,500.

Note: Anyone who does not pay turnover tax is not entitled to claim input tax. If you as an entrepreneur have high expenditure on investments and/or deliveries, you should consider waiving the tax exemption for small entrepreneurs. You should discuss this matter with your tax advisor.

Further information: Tax Information Centre

Insurance and personal health and security provisions

Before requesting offers for insurance, you need to know what your main risks are and where real damage can occur.


© Getty Images/Luis Alvarez

Company insurance

Before requesting offers for insurance, you need to know what your main risks are and where real damage can occur.

Examples of company insurance

  • Corporate liability insurance (Betriebs-Haftpflichtversicherung):
    to cover claims for damages by third parties, e.g. by customers, suppliers, visitors and employees
  • Professional liability insurance (Berufs-Haftpflichtversicherung):
    For services companies and freelancers. This type of insurance covers the financial consequences of a professional oversight, for instance, incorrect advice, appraisal.
  • Business interruption insurance (Betriebs-Unterbrechungsversicherung):
    to cover running costs, such as wages, salaries, rent and interest, etc. at times when revenues cannot be generated.

Arbeit und Wirtschaft: Company insurance

Personal insurance

Health and disability care insurance

If you are planning on changing from the statutory health insurance scheme to private health insurance, you should first consider the advantages and disadvantages of such a move. If you opt for private health insurance, you will normally not be able to return to the statutory health insurance scheme. The consumer advice centres can advise you in this matter.

Daily sickness allowance

A self-employed person who is unable to work (for instance, due to illness) will usually cease earning. A daily sickness allowance (Krankentagegeld) can offset these losses in income. This type of insurance can be taken out under voluntary statutory health insurance or as private insurance. You should compare insurance companies! Rates can differ considerably. You can also contact the consumer advice centres for assistance.

Occupational disability insurance

Occupational disability insurance provides you with a monthly pension should you find yourself unable to pursue your occupation. When taking out this kind of insurance, please check to see if you should take out separate accident insurance. For more advice in this matter, you should contact the consumer advice centre.

Statutory disability scheme

Unlike private occupational disability insurance (Berufsunfähigkeitsrente), the statutory disability scheme (gesetzliche Erwerbsminderungsrente) of the statutory pension fund will only pay out when the person insured is unable to pursue any kind of work, irrespective of their qualifications or their last job.

Accident insurance

The employers' liability insurance association, i.e. statutory accident insurance scheme, is an important addition to all other forms of insurance. Private accident insurance is another option. Both types of insurance pay out when an accident results in invalidity. Entrepreneurs or freelancers are not normally compulsorily insured, however, they can insure themselves voluntarily with their employers' liability insurance association against the consequences of accidents at work or on the way to and from work. The industrial/commercial employers' liability insurance associations are organised according to sectors. As always, it is important to obtain advice here.

Life insurance

A risks-only life insurance policy is the best way to protect the financial future of your family. This type of insurance becomes payable when the insured party dies. The level and duration of cover can be agreed to individually.

Pension provision

If while working as an employee you already paid into the statutory pension fund you will continue to be entitled to your claims. Self-employed freelancers and business people can continue to pay into the German Pension Insurance scheme and/or can take out private pension insurance. Some self-employed people are obliged to be insured in the statutory pension insurance scheme. This applies, for instance, to skilled craftspeople, midwives, teachers, artists and publishers.


As an entrepreneur, you will continually be concluding contracts, especially purchase agreements (Kaufverträge), service contracts (Werkverträge) and employment contracts (Arbeitsverträge).

Agentur für Arbeit

© Getty Images/Luis Alvarez

You can, for instance, use template contracts or have them adapted to your specific needs by an attorney or notary. Template contracts are, for instance, available on the websites of the Chambers of Industry and Commerce. Have an attorney or a notary check important contracts with regard to your specific case.

Please observe the following points when drawing up contracts:

  • Binding effect
    Contracts must be adhered to. Special attention should therefore be given to contract negotiations. Each party to the contract is responsible for ensuring that they can meet the obligations undertaken.
  • Validity
    Contracts can in principle be concluded orally. This applies, for example, to everyday things like purchasing office supplies or foodstuffs, but also to work contracts and service agreements. Other contracts should be made in writing. This applies, for instance, to many types of contracts made between an entrepreneur and a consumer (e.g. hire purchase business or consumer loan agreements). Land transfers and property encumbrances must be additionally notarised. This also applies to company law contracts of a private limited company. Binding lists showing the form required for the various types of contracts can be obtained from an attorney.

Important: Faxes are not recognised as a written form of contract; emails are only recognised if they bear a digital signature in accordance with the Digital Signature Act.

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