Starting a Business in Berlin

18 19 Starting a Business in Berlin A Beginner’s Guide Trader The freedom of economic activity is a fundamental right in Germany; in other words, anyone is entitled to carry out a trade unless exceptions or restrictions have been prescribed or permitted by law. What are the characteristics of a trader? You are a trader if you work: in self-employment; long term, i.e. with the intention of repeating and continuing your activity and of making a profit; and you are working neither in a freelance profession nor in primary production (agriculture and forestry, fisheries, etc.) or the civil service, or in a job that is basically against social mores (e.g. organ trafficking). Businesses requiring certification or a licence Restrictions on the freedom of economic activity exist mainly in areas where either the common good or the health and safety of individuals might be jeopardised. Those wishing to run such a business generally have to obtain a special permit from the authorities in addition to notifying the municipal regulatory agency (Ordnungsamt) in the normal way. The authorities will require regular proof of personal trustworthi- ness and evidence that one’s financial affairs are in order. For some professions, proof of specialist knowledge and compe- tence is required, too. In individual cases, the workplace must also comply with special conditions. During the initial stage of your self-employment, you mainly work for a single customer for a relatively long period of time, as is often the case. This might cause the national insurance authorities to suspect bogus self-employment – a suspicion you will have to rebut. You should therefore notify the clearing house of the German Statutory Pension Insurance Scheme (Deutsche Rentenversicherung Bund) of your status as early and in as much detail as possible, or the consequences for you and your regular customer may cost you dear! German Public Pension Insurance  deutsche- rentenversicherung.de Select language: „English“ EXAMPLE  Freelancer Freelancers are self-employed people working as scientists, academics, artists, novelists, teachers, educationalists, etc. Typical freelancers include doctors, lawyers, tax advisors, business consultants, journalists, artists and academics. Fre- elancers are not governed by the German Trade Regulation Code in their work, so do not have to notify the authorities of their business. A freelancer’s self-employment therefore for- mally begins when he applies for a tax ID number from the relevant tax office. In cases of doubt, the relevant tax office will also decide whether the activity concerned is a freelance occupation or a trade. CHAPTER 2