Hi

I am a GC holder came to germany in 2003. I have some question regarding freelancer.

I heard from a company that to do freelancer one cannot have direct contract with that company. We need to have a consultant company and that will communicate (process contract and all papers) with the comapny

for example
freelancer contract--->some consultant--->XYZ AG or GmBh

How can we directly bind the contract with the company (XYZ AG or GmBh). Acccording to german freelancer law we can't have a direct contract. Is it true ?

If we have direct contract then we need to prove that we have some other contract. that means we have to prove that the person is working for two companies.

Kindly explain .....

Well I dont think that such a rule exists.. but usually big companies(AGs, GmbHs employing more than 1000 Employees) do not want to negotiate with each Freelancer they hire.. they usually hire an umbrella company which offers the AG and GmbH a bunch of "freelancers" on a fixed price.. such a deal is less troublesome for the AG and GmbH instead of e.g dealing with 20 Freelancers.. and keeping their contracts up to date etc..

That is why you need a "intermediate" company to work for a bigger company.. this "intermediate" company will take some percentage of your payments ofcourse.. ;)

I am pretty sure that such thing is not enforced by law.. but it is just common practice in the industry because of the reasons I mentioned above..

Regards,

Lacrima

Thanks for your reply !!!

Actually the reason I heard was that any one with the required VISA can practice as a freelancer but he has to prove to the government that he work for two or more companies.

So the consultant will write to the government that the person is working for two companies. One is the target company and the other is the consultant company....

Is it true any one have got such an experience......

i supose if you work few years for one company that they regard it as a nonnecessary freelancing (Scheinselbstständigkeit).
they prefer normal employment in that case (more tax).
but if you have 2 clients (not Vermitler but real clients) they can say nothing if you work direct for them.

DVD,

I dont have another one client and my company is not intersted to pay the extra TAX. so how to proceed ....Only with umbrella company ...Please inform me

I am not sure I can help you.
Do you have visa that allows freelancing?
Are you sure?
GC is not suitable for freelancing!

Thanks DvD for your reply,

I have the required VISA for freelancing (EG).
How to do freelacing with out umbrella company ?
Is there any way to do that..Kindly inform me ..

Hi

A little advice from somebody who has freelanced now for 15 years in 4 different countries ( Canada, USA, Netherlands, Germany ) :

Umbrella companies - NOTHING wrong with using one. You seem to be interested in maximizing your cash-in-hand. A good umbrella company will do this for you - guaranteed.

They will do everything - including hooking you up with the best tax people available. They have many consultants working through them so they would not tolerate sub-professionals in any business arrangement. You will find the service you will get from your tax people is first rate.

It is very easy to view the services of lawyers, accountants, and tax specialists ( an umbrella company has all these for you ) as an unneccesary expense out of your pocket. But in my years of freelancing, every penny I gave to such professionals ( with very few exceptions ) has been money well-spent.

The Umbrella company I use costs me about one day's pay per month. I could not do this work in one day of my time per month - I am a programmer - not a tax guy.

Going out and finding individuals to do this work for me ( i.e. contacting lawyers / accountants directly without an Umbrella company ) is not worth the bother either.

Trust me, in 15 years I have seen it all; Lawyers that take your money and do nothing, accountants that have no right to be practicing, visa people that have no clue.

i supose if you work few years for one company that they regard it as a nonnecessary freelancing (Scheinselbstständigkeit).

three years is a boundary here. if you will work more than three years for one company, it will be considered to be a Scheinselbstständigkeit. but this is not going to happen because company will throw you out, otherwise it's them who will have to pay Rentenversicherungsbeiträge and so on.

the boundary is there in any case, it doesn't matter whether you have a direct contract or a contract with umbrella company

I could not do this work in one day of my time per month - I am a programmer - not a tax guy.

i made my last tax declaration in three hours and i guess that i made it better than any tax consultant could do it. they mainly use patterns and my declaration includes some new ideas

it mainly depends how much free time you have. if you work 10 hours a day and instantly find new contracts, you will surely want help from a tax consultant. but if you do not have anything to do some days, probably it's a good idea to save money and make a declaration yourself.

of course if i had a company with 1000 employees, i couldn't make the thing right 'cause i am not a tax guy. but in case of 1 freelancer the thing is not so difficult ... if one uses software for accounting of course.

Just a question off the topic. If you were a GC holder from 2003. How did you manage a freelancing permit in the first place?

for that you need to speak with auslandamt and after that they will forward to IHK. After that in IHK you need to present a business plan. When they are happy they inform the ausladamt. After that you can change your VISA.

Please note ::: for preparing the business plan dont make it your self (only my advice).

Hi there,

I am in the same situation. Need your help. Can we take this up offline? Can you mail me at kumar_aqua at yahoo dot com? please.

Regards
kumar