Part-time self-employment in Germany

One of the frequently asked questions of our clients is whether it is possible to be self-employed part-time at the same time as having a blue card residency in Germany. We have already covered the topic of blue card and part-time self-employment in Germany. In this article from Wise Business Group, we discuss this in more detail from the German labor law aspect.

Blue card residence and self-employment in Germany

One of the motivations for entering Germany for many friends who contact us is certainly financial independence and self-employment as soon as possible.

In previous articles, we have discussed that if the German Blue Card holder is married or has a reliable person inside Germany, they can register a company for themselves simultaneously. While having any shares amount in that company, they can hand over the company’s executive management to their spouse or trusted friend in Germany until they obtain a permanent residence permit. In this case, the blue card holder can officially work part-time in this company.

Suppose the German Blue card holder is single or does not have a reliable person in Germany. In that case, they can still engage in economic activity part-time by registering a side business (Nebentätigkeit) at the trade office (Gewerbeamt) in their city in Germany. Here, attention to the importance of two points is mandatory.

Two critical points about blue card and part-time self-employment in Germany

The first point:

The holder of the German blue card receives a sheet called Zusatzblatt along with their residence card. In this sheet, there are more explanations about the conditions and limitations of employment and self-employment of the Blue Card holder. In most cities, it is written in this sheet that the holder of the blue card can be self-employed part-time. However, since the scope of decision-making in this matter depends on the immigration office of the target city in Germany, be sure to read this sheet carefully before taking any action and use the advice of an immigration lawyer. Some cities can also create more or less restrictions for the applicant.

The second point:

Pay attention to the clauses of your employment contract. In some employment contracts, the employer restricts employees from starting a business. In some cases, the employer prevents the start of activity in the same field of work. Also, they may altogether prohibits any type of self-employment activity due to the effect on the work efficiency of the employee.

Part-time self-employment in Germany

Assume you check all the cases correctly. Now, we will look deeper at self-employment while having a work contract in Germany.

Part-time self-employment is very common in Germany. The KfW Start-up Monitor 2023 shows that there were 605,000 start-ups in Germany in the year before that. More than half, or 439,000, started their businesses part-time. Anyone self-employed on a part-time basis in addition to their permanent job will enjoy a reliable source of income from their primary job while realizing their business idea in Germany.

However, founders of a part-time business in Germany should know that they are subject to the same conditions as full-time business founders. Therefore, to be successful in Germany as a part-time self-employed person along with a work contract, you should pay attention to the following points.

What are the advantages and disadvantages of a part-time business?

Not everyone can or wants to give up their safe day job when they have a brilliant business idea. After all, steady work as an employee offers a secure income—and as a self-employed founder, who can estimate or guarantee how the company will develop?

Part-time self-employment in Germany provides an attractive alternative here, as you keep your main job and run your company on the side. It is nevertheless reasonable to know the advantages and disadvantages of doing so.

Advantages of part-time self-employment in Germany

Part-time self-employment in Germany has the following advantages:

• The regular income from your main job through the employer creates security and eliminates the psychological pressure of generating income and success in business.
• You can test your business idea in peace and later turn it into full-time self-employment.
• Thanks to regular income, financing your part-time self-employment is individually controllable, which minimizes financial failure (risk).
• You can invest fewer hours compared to starting a full-time business.
• A part-time activity can become your main job during your unemployment.
• If you successfully become self-employed part-time, you will increase your overall income.

Disadvantages

However, part-time self-employment in Germany also has its drawbacks:

• Starting a business, even as a side job, takes a lot of energy and time. Your hobbies should come second. Consider whether you have enough free time and energy to succeed as a part-time self-employed person.
• Customers, business partners, and suppliers often rate part-time self-employment as a negative margin. Since they may doubt your commitment and professionalism in providing services or products.
• Your main job (employment) limits your time management. You are less able to respond to customer requests during high-traffic times.

Tip: Your part-time self-employment job also has a considerable impact on success. For example, consulting work alongside your main job in Germany is easier to manage than a retail store.

Which points to consider when registering your part-time business in Germany?

Business registration is mandatory for all self-employed persons working full-time or part-time in Germany.

Our team can accompany you in implementing the business idea, obtaining the required permits, registering the business, and starting the self-employment process in Germany. You can contact us via email and WhatsApp.

Combination of self-employment with part-time/full-time employment in Germany

The combination of regular employment and part-time self-employment is not uncommon in Germany, as mentioned at the beginning. However, the income in the main job is usually low, and the number of working hours is correspondingly lower. In order not to be surprised later in Germany and not have to pay additional health insurance premiums, if you have state insurance in Germany, you should ask your state insurance company to determine the status. The state insurance may decide in this case that you are not part-time but full-time self-employed. In this case, you must pay insurance contributions for both part-time employment and self-employment.

State or private insurance in Germany

Pay attention that in Germany, the rate of state insurance (AOK, TK, IKK,…) increases with increasing a person’s income, just like the tax rate. It means that if a person has multiple jobs and has another source of income, they must reflect it in their tax return every year, and the insurance company will subsequently update the tax insurance rate for the next year accordingly. This is not the case with private health insurance. Their rates will be fixed and independent of income. Therefore, as one’s income increases in Germany, private insurance can be relatively more economical for an individual. Of course, you should appropriately analyze factors like the number of family members and the insurance service quality.

Should you inform your employer that you have a part-time job?

Employed employees must inform the employer of their planned part-time self-employment. Even if the employment contract says otherwise, we still recommend to notify.

As long as you adhere to the following rules, there will be no problem:

• Your product or service does not compete with your employer’s product or service.
• The quality of your full-time employment does not suffer because of your part-time job. It means you should show up to work as committed and constructive as before and not be too tired.
• You do not use your employer’s resources or data.

Laws on part-time business in Germany

The following rules apply in Germany for part-time self-employment:

1. Notifying the tax office of the start of a new business in Germany

You must electronically notify the responsible tax office in Germany of the start of agricultural, forestry, commercial, or freelance activities by yourself or your tax advisors without prior request by sending a tax registration questionnaire within one month of the new business establishment date.

You can do it for example, via the portal «My ELSTER – Online Tax Office» in Germany. In future articles, we will explain more about how to use it.

Mein ELSTER – Online Tax office makes it possible to send tax information to the tax authorities without paper, cost, and regardless of time and place.

To use Mein ELSTER, when logging in for the first time, you must initiate a registration process that ends with an individual ELSTER certificate issuance. If the company founders have already received the ELSTER certificate, they can also use it to submit the desired tax registration questionnaire here.

2. Knowing the specific conditions and requirements of the desired business in Germany

Also, you should check before registering whether the activity you want to do is subject to particular requirements in Germany. For example, we can refer to the required licenses, approvals, or master craftsman’s certificates.

For this, you can register at www.elster.de.

In the following article, we will discuss the amount of payable taxes and insurance premiums for someone who is self-employed part-time in addition to their primary job.

You can contact us to receive advice about registering and setting up a business in Germany. We will help you start your part-time or full-time business as soon as possible.

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Part-time self-employment at a glance

Is it possible to be part-time self-employed while having a blue card residence and an employment contract in Germany?

Yes, the blue card holder can register a company in Germany and hand over its executive management to his spouse or trusted person until obtaining a permanent residence permit. They can also work part-time in this company.

If the blue card holder does not have a trusted person in Germany, they can still be self-employed part-time by registering a side business at the Trade Office. In this case, they should pay attention to the requirements of self-employment in the target city, which is included in the Zusatzblatt sheet. Also, their employment contract should not contain clauses that limit or prohibit them from starting a business.

With part-time self-employment in Germany, you can realize your business idea and have a reliable source of income through your primary job. In such a case, it will be easier to finance the new business, and the time investment and mental pressure to generate income will be less. As a result, you can safely test your business idea and increase your income if it is successful.

Before starting the activity, inform your employer that you intend to be self-employed part-time. In addition, you need to register your business, register with the tax office, and obtain the necessary permits and certificates.

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Business in Germany

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