Formalities and Legal Aspects
Formalities and Legal Aspect of Self-Employment - Hamburg Welcome Portal
If you're an international in Hamburg thinking about starting a business or becoming self-employed, you should take care of several important formalities and legal matters first. Find out whether you'll be self-employed or a freelancer, if you need a special residence permit for your activities, how to legally register your company, and much more.
Citizens from European Union (EU) and European Economic Area (EEA) states as well as from Switzerland enjoy unrestricted freedom of movement in Germany and the same rights as Germans. They do not require any residence permit. Non-EU citizens and non-EEA citizens need a special residence permit which entitles the holder to business activities in Hamburg.
The social insurance system guarantees the social security of our society and consists of health insurance, long-term care insurance, accident insurance, unemployment insurance and pension insurance. This social insurance system, however, is primarily designed for employees. Business and shop owners are themselves responsible for their social security. For them, only health insurance and long-term care insurance are mandatory.
Self-employed persons may choose either a statutory health insurance company or a private insurance provider. The contribution rates for statutory health and long-term care insurance are defined by law. On top, there is a small additional contribution every statutory insurance company can determine individually. In case you opt for private health insurance, the amount of contributions depends on the scope of services you have chosen as well as on your age and your state of health at the time the contract is concluded.
Additionally, it is recommended to insure oneself against other entrepreneurial risks (e.g. inability to work caused by an illness or accident) as well as to ensure adequate pension provision.
Freelance Occupation or Commercial Enterprise
In German tax and trade law, a distinction is made between commercial enterprises and freelance activities. Freelancers do not have to register their trade nor pay trade tax. In general, freelancers carry out their services independently, on their own responsibility and on the basis of special qualifications or creative talent in the interest of their clients and the public good. Whether it is a commercial or a freelance activity must be clarified on the basis of each individual case, since various laws are affected and the demarcation cannot be answered in general terms. More information on the demarcation between freelance occupations and a commercial enterprise can be found on the business start-up portal of the Federal Ministry of Economics and Technology. Ultimately, the responsible Tax Office decides whether your activities are classed as freelance or commercial activities.
Registrations, Approvals and Permissions
Depending on the nature of your planned activities, you may need certain permissions before you're legally allowed to start your self-employment. Below are some exemplary criteria intended to give you a first impression, but which are by no means complete or conclusive.
- Business owners must register their business at the trade office (“Gewerbeanmeldung”).
- Any self-employment must be registered with your local tax office. When you register your business as a trade, the tax office will be informed automatically.
- You are obliged to register with a employers' liability insurance association (‘Berufsgenossenschaft’). The professional associations in Germany are accident insurance institutions for companies and their employees. The task of the professional association is to prevent accidents at work, occupational diseases and work-related health hazards.
- Anyone who wants to become self-employed in craft must register with the Chamber of Crafts in Hamburg.
- Depending on the nature and scope of your commercial activity, your business must be entered in the commercial register. The commercial register is a publicly accessible directory and provides key information about a company and is administered by the Chamber of Commerce Hamburg.
- Certain occupational groups have to register at professional chambers. This applies, for example, to architects, tax consultants and lawyers.
- If you want to lay out your goods on the street, you need a special permit from the responsible district office.
- Some businesses may not be carried out without permission (e.g. banking or insurance intermediaries).
To inform yourself about the necessary formalities, you can use the online procedure finder of the Point of Single Contact Hamburg. It is possible to handle the entire process electronically. You can call them or write an e-mail as well as reach them by mail under the following address:
Point of Single Contact in Hamburg
Phone: +49 (0)40 5332 6660-0
Fax: +49 (0)40 5332 6660-9
PO Box: 11 14 49, 20414 Hamburg
If you prefer a face-to-face meeting, you may visit during opening hours:
Mon - Thurs: 8 am - 4:30 pm, Fr.: 10am - 3 pm
Chamber of Commerce Hamburg
Adolphsplatz 1, 20457 Hamburg
Holstenwall 12, 20355 Hamburg
In certain circumstances your business can be funded by the government. Feel free to contact the IFB Business Advice Centre to get information about funding queries. It advises on funding offers from the Senate of Hamburg, the German federal government and the EU.
There are numerous offers of support for people interested in setting up a business in Hamburg. For more information please continue with the article Contact Centres and Business Authorities.