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Post-Masters student starting up business in Stuttgart- what are the prerequisites?
Thread poster: Kasia Altman
Nov 7, 2008

Dear Proz colleagues,

I am currently a student but will be finishing my Masters in Legal Translation in December. Currently living in Seoul, South Korea I will be moving to Stuttgart, Germany next June with my husband, who been offered a position there. As you can imagine, moving to a country where one of my source languages is spoken is extremely exciting, but the harsh reality of the various matters to be settled before I can begin work is setting in. I have been browsing various German government sites, but some first-hand advice would be welcome and appreciated.

My questions are this: what exactly will I need to do in order to legally set myself up in order to work? I assume I’ll need a tax number (or pay taxes in the US instead?) and to be registered with the local business register (and what kind of a business is a freelancer? I’m not exactly going to be a GmbH), but do I need some proof of my credentials? Is a brand new Masters diploma going to cut it in that area? In addition, I have Polish and American citizenship, and I’m not sure under which citizenship to register with- my visa/ residency permit will be in the American passport (as per the US government) and I know Poles still need special permission to live in Germany; I don’t think I need to get two kinds of residency permits for two kinds of passports, do I? It seems silly.

I’m feeling a bit overwhelmed and granted I have several months to get ready before I want to be up and running (tentatively next Autumn) but I’m unfortunately the opposite of a procrastinator! I have started working on my website and have so far uploaded the interim version, and I'm not concerned about finding clients, just the official aspects of such an endeavor. I would be extremely appreciative of any advice anyone could give to a beginner like me. Any advisers in this matter will also be offered Kaffee and home-made Kuchen as a special incentive- though it will have to be in Stuttgart next Summer!

Thank you in advance for any links and advice, Kasia Altman


[Edited at 2008-11-07 05:07]


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RobinB  Identity Verified
Germany
Local time: 17:52
German to English
Not so difficult really Nov 7, 2008

Kasia,

You'll no doubt get more detailed replies, but here are a couple of very brief comments/questions:

I am currently a student but will be finishing my Masters in Legal Translation in December.


Where are you doing this (purely out of interest, not a leading question)?

My questions are this: what exactly will I need to do in order to legally set myself up in order to work?


To work as a freelance translator, basically all you need to do is register with your local tax office (Finanzamt). That's all there is to it. As a freelance professional (Freiberuflerin), you do *not* have to register with the local authorities, and in particular you do *not* need a Gewerbeschein (and don't let yourself be persuaded otherwise by ignorant local officials).

Otherwise, no proof of credentials is needed, as the profession of translator is open to anybody in Germany.

In addition, I have Polish and American citizenship, and I’m not sure under which citizenship to register with- my visa/ residency permit will be in the American passport (as per the US government) and I know Poles still need special permission to live in Germany; I don’t think I need to get two kinds of residency permits for two kinds of passports, do I? It seems silly.


Register under your Polish passport only. The restrictions on Poles apply only to employment relationships, not to self-employment (especially self-employment where no registration is required). You have freedom of movement and establishment throughout the EU, so use it!

It's all really easy in Germany, certainly compared with most other countries. In fact, you can start working as a freelance translator and then register with the Finanzamt after a month or so. This may seem unbelievable, given the stifling bureaucracy in other areas of life here in Germany, but it's true.

So relax...

Robin


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Kasia Altman

TOPIC STARTER
Thanks to Robin, biggest sigh of relief heard on the Korean Peninsula today.. Nov 7, 2008

Dear Robin,

Your clear and straightforward explanation has really helped me to set my mind at ease (and relax). I will follow your suggestions to a T; I just wasn't expecting such simplicity, especially after having lived in Italy and going through hoops to get things settled (not as a freelancer though).

My Masters is actually a Distance Masters at the University of Genoa, and my languages were EN DE IT. It's been going on all year and I'm actually leaving right after Thanksgiving Day to get to Italy and get over the jet lag before the final exams take place on December 5th. It's been a great experience, though it was extremely hard work. A lot of research was also required and I feel fortunate that we students didn't have our hands held and led around like sheep (no offense to sheep, I like them!), so I at least learned to think and deduce things for myself.

I thank you once again for your kindness in responding. If you happen to be near Stuttgart next summer, the Kuchen offer still stands!

Kasia Altman


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Michele Johnson  Identity Verified
Germany
Local time: 17:52
German to English
+ ...
Not so easy in my experience (US citizen) Nov 7, 2008

RobinB wrote:

To work as a freelance translator, basically all you need to do is register with your local tax office (Finanzamt). That's all there is to it. As a freelance professional (Freiberuflerin), you do *not* have to register with the local authorities, and in particular you do *not* need a Gewerbeschein (and don't let yourself be persuaded otherwise by ignorant local officials).


Are you 100% sure about this Robin? I don't want to scare you Kasia, but my experience as a US citizen was quite different (I can't say anything about the situation for Polish citizens). I would maintain that while you don't need a Gewerbeschein, you do need to register with the local authorities and obtain a residence and work permit. My non-EU husband had (has) a job, we had to register at the Ausländerbehörde, and my options were:

- Familienzusammenführung (keeping the family together), which was the option I went with for quite some time. This visa explicitly denied me work of any kind, both selbständige Arbeit (freelancing) and unselbständige Arbeit (working as an employee). I know a lot of Americans at Siemens who have their visa sponsored by the company and I don't know of a single instance where the spouse is officially allowed any kind of work, either independent or as an employee. In other words a residence permit but no work permit.

- If I wanted my own visa, I would either have to have a job offer from a German company or, for my own business, prove that there was some huge benefit for Germany or the local economy, i.e. creation of 5 jobs, investment of EUR 500,000, etc., which is probably not so realistic in this case.

There are always exceptions of course - it was pretty easy to get permission for teaching English classes for instance. In the end I made a little presentation and convinced them to give me an exception for "freiberufliche Sprachdienstleistungen" until I had been here long enough (5 years?) that I had permanent residency and an automatic, unlimited Arbeitserlaubnis (work permit). I think it is easier for spouses of EU citizens though. And I really don't know the situation for Polish citizens, but I suspect it's easier than for Americans. I do know that the forms ask about *all* citizenships you have, which sort of makes it harder to pick 'n choose at will.

Let me just quote a website for US expats in Germans:
http://www.german-way.com/expat_visa01b.html


Do you want to start a business or engage in self-employment? With the new law, there is (finally the long-missing) explicit regulation on the working migration of self-employed persons to Germany. Generally, you will need to show for a successful application following details:

1. Germany’s higher economic interest or Germany’s special regional need for your project,
2. the expectation of positive effects of your business on the economy,
3. as well as the security of the financing of the intention through equity or a credit promise,
4. no damage to Germany’s overall economic interests is to be expected.


That article starts here http://www.german-way.com/expat_visa01.html and is very informative.


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Kasia Altman

TOPIC STARTER
Thank you Michele Nov 7, 2008

Dear Michele,

Thank you for all the information you provided, I will start looking through the links. My husband (he's American and not EU, but he will be after a few years of marriage to me) works for the armed forces, and I know I am entitled to the (for US citizens) Status of Forces Agreement (SoFA) visa. I definitely prefer to register as a Pole though, and with the list of prereqs you cited, it definitely seems to be a better route to seek.

Your post was extremely informative and I need to digest its content.

I cannot describe how appreciative I am of you taking time out of your day to help me.

Danke schön, Kasia Altman


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KSL Berlin  Identity Verified
Portugal
Local time: 16:52
Member (2003)
German to English
+ ...
Don't worry Nov 7, 2008

Your citizenship in an EU country is your trump here; the experiences of non-EU citizens like myself (also a US citizen) are irrelevant in your case. It will be quite easy. However, before you start working, get yourself a copy of Section 14 of the German Umsatzsteuergesetz, because it contains very important information you will need to know for invoicing. You should also see about registering to get a VAT number as soon as it is convenient to do so. If your earnings are low you might not be required to do so (at least if moonlighting - full time freelancing may require this regardless of your take), but then you won't be able to deduct the 19% VAT from your business-relevant purchases either.

Stuttgart is a nice place, and the local dialect is lovely; I expect you'll enjoy it.


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Michele Johnson  Identity Verified
Germany
Local time: 17:52
German to English
+ ...
smooth sailing with SoFA visa Nov 7, 2008

Katarzyna Altman wrote:
... I know I am entitled to the (for US citizens) Status of Forces Agreement (SoFA) visa.


In that case, I think you're all set! I'm sure this is not authoritative, but check out this document:
http://www.rfp-steuerberatung.de/pdf_files_tax_advice/areyouamilitaryspouse_end.pdf

Do I need a work permit?
According to Article III of the NATO Status of Forces Agreement (SOFA) dependents of the
US Forces need a valid passport with the Nato Status of Forces certificate/stamp therein.
Article III, Paragraph 3 „Members of a civilian component (for example: AAFES)
and dependents shall be so described in their passport.“
The German Aliens Act (§ 2 para 1 No. 2 AuslG, Art. 7 SA) does not apply to individuals
covered by the SOFA Status.
These people do not need a work permit in accordance with § 284 para 1 No. 3 of the
German Social Security Code.



I'd still recommend talking to a Steuerberater - he or she can help you register with the Finanzamt, get a VAT number if you decide you want one, advise you regarding tax pre-payments if necessary, etc.


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RobinB  Identity Verified
Germany
Local time: 17:52
German to English
The benefits of club membership Nov 7, 2008

Hi Michele,

The hurdles you mention don't apply to Kasia because she's a member of the club (EU citizen), and I can't think of any sensible reason why she should register here in Germany as a U.S citizen. One nationality is enough for the German authorities, and citizenship of an EU member state is what counts. Registration for EU citizens is now dead simple, and they don't even need a paper residence permit any more.

I'm aware of how difficult it can be for non-EU citzens to work here on a self-employed basis, but let's be honest, they're nothing to the barriers in the U.S.!

Robin


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Londonlinguist
United Kingdom
Local time: 16:52
Spanish to English
+ ...
Masters in Translation Nov 7, 2008

Hi, I don't want to hijack your thread but the information you gave about the Masters in Translation (University of Genoa) seems really interesting.
Could you tell me a little bit more about it? I see that it is a distance-learning course, but how much does it cost?
I am grateful for your reply.
Grazie mille.


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Kasia Altman

TOPIC STARTER
Wealth of options! Nov 7, 2008

Dear Mr Lossner,

I actually have a copy of the Steuergesetz here so I will go over it, that is a great idea. I've also been poring over EURES and several other EU websites (http://ec.europa.eu/youreurope/nav/en/citizens/services/eu-guide/working/index_en.html#11344_20) for info. We do hope to stay in Europe indefinitely (looking at Finland in ten years or so, but that is another story!) so it looks like the EU passport will be the golden ticket. I want to do everything the legit way and to work full time (no moonlighting) and I will definitely get the VAT. I want to into EU social security, so when I'm 65 I'll be able to get social security and go live near Santa Claus in Rovaniemi. In the meantime, I'm thrilled to learn that Stuttgart is nice, especially because it is 99% sure that we will be living "on the economy."

Dear Ms. Johnson,

I should have used your last name to address you previously, please excuse the lapse of judgment. That SoFA link you provided pretty much answers more questions than I could have thought up! I do plan to meet with a Steuerberater, as you suggested- I'll probably print out that pdf file and bring it along. I may arrive a bit too prepared, actually!

Dear Robin,
I should have addressed you more properly the first time around! It does seem like that little burgundy passport makes all the difference. You have given me more insight that you can imagine (I am not around many Europeans here in Korea so it's hard to get the "dirt.")

At the expense of sounding completely monotonic, I thank you all for your time/research/willingness to help me.

Did I mention I make some good Kuchen?

Dziękuje (Thank you in Polish), Kasia

[Edited at 2008-11-07 13:59]


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Kasia Altman

TOPIC STARTER
No problem Nov 7, 2008

Londonlinguist wrote:

Hi, I don't want to hijack your thread but the information you gave about the Masters in Translation (University of Genoa) seems really interesting.
Could you tell me a little bit more about it? I see that it is a distance-learning course, but how much does it cost?
I am grateful for your reply.
Grazie mille.


Ciao Londonlinguist,

No problem. First off, here are some links to this year's program:

http://www.perform.unige.it/aree/corsi_2007/traduzione_giuridica/master_traduzione_giuridica_scheda.html

http://www.farum.unige.it/masterfarum/vademecum2008/giuridico.php

These are two pages for the Legal Translation program; an Economic Translation option is also available. Here is the deal: the course is mostly Italians and you translate into and out of Italian. The available languages are: IT DE SP FR EN and I think Economic Translation is the same. The Spanish group was pretty small, by the way. There are six translations toward each combination (for example six EN>IT and six IT>EN, so I had 24 in total). There is a Corso di Perfezionamento available, it costs less and is half of the translation work, BUT you still get tests in various areas of the law in EACH language, so I had lessons and tests in English, German, and Italian law. The translations require a lot of research and you really have to rely on yourself. The translations are half individual translations and half group ones (a group is five people). We have an online intranet and each subject and group gets its own room to discuss the work, ask questions, etc. There is also a terminology class and "revisione testuale"- or rather various texts are given to you and you are asked to revise them, make changes,etc. You are expected to get specialized dictionaries to help you out, and a high level of your languages is really necessary. All in all I've had a pretty good experience, though I prefer to research and do work alone. I think I paid Euro 2,700 for the course, the corso di perfezionamento is about 1,600 I believe. You must be prepared to go to the final exams in person- so I'm flying in and we've decided to make a three-week long vacation of it. They help you with hotels as well. I hope that helps, the links should also be useful!

I really learned a lot about all things Law, and my research skills have really improved. But one thing to remember: they don't baby the students, so you must solve a lot on your own, and that can be a positive or a negative.


Saluti dall'Estremo Oriente,
Kasia Altman


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RobinB  Identity Verified
Germany
Local time: 17:52
German to English
Forget social security Nov 7, 2008

Katarzyna Altman wrote:
I want to into EU social security, so when I'm 65 I'll be able to get social security and go live near Santa Claus in Rovaniemi.


Hi Kasia,

Firstly, abandon the formalities. It's first names here, at least in English.

Secondly, at the risk of getting bogged down in the details a year before you arrive in Germany, I'd better tell you that you needn't bother thinking about social security and state pensions.

Freelance translators in Germany are not subject to any social security contributions. You can opt in to the state health insurance system if you want to, but you should do your sums first and work out which is going to be more cost-effective: private or state. It may well be the case that private health insurance will be cheaper for you *and* offer more benefits. Something to look at (online) closer to your move to Germany.

As far as pensions are concerned, you can make your own arrangements here if you want to. You can't pay contributions to the state system, but you wouldn't want to anyway, because it's simply not worth it. The problem then is what sort of private provision to make. If you're not going to live and work in Germany until retirement age, it's probably not going to be worthwhile taking out a private pension (these are mainly insurance-based), because the pension contributions will only be (partly) tax-deductible in Germany (portability of private pensions has still to come in the EU, and countries such as Germany have been blocking efforts in that direction for years). And state-supported pensions such as "Rürup pensions" are also attractive only if you intend to work in Germany for decades.

To be perfectly honest, if you want to start saving for retirement while you're in Germany, you're probably better off putting money regularly into something like index tracker and bond funds and just leaving it there, ignoring any ups and downs on the financial markets. Over the long run, say 30 years or so, you'll almost certainly significantly outperform anything that a German private pension could possibly offer you, and you take can it with you wherever you go. You'll lose some tax breaks during the payment phase, but almost certainly profit in the long run.

Good luck with the exams.

Robin


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Kasia Altman

TOPIC STARTER
Excellent information on social security, thank you Robin Nov 8, 2008

RobinB wrote:

Secondly, at the risk of getting bogged down in the details a year before you arrive in Germany, I'd better tell you that you needn't bother thinking about social security and state pensions.

Robin


Dear Robin,

Thank you for your post on social security and state pensions. It really gave me a lot of ideas for the future, though I must admit I haven't really researched this area that much and I've been thinking more of homes and mortgages for the next few years. I really figured that pensions could be moved from country to country and I had no idea it wasn't the case, so I'll keep my eyes and ears open in case of any developments in that sector. With the stock market upheaval and many people having lost their retirements, I figured social security was worth looking into. All this shows is that we all need to educate ourselves on all of the options, I guess. I do like to plan long term, though I suppose I have another 27 years before I retire.

Thank you once again! I definitely feel as though I have been mentored in those little practicalities that need to be dealt with.

Kiitos (this time in Finnish to break the monotony of my thank yous),
Kasia


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Londonlinguist
United Kingdom
Local time: 16:52
Spanish to English
+ ...
Thanks Kasia! Nov 8, 2008

Thanks for the information on the Genoa Master's degree - it looks good although I am unlikely to take it for the time being as I am studying for the DPSI (Diploma in Public Service Interpreting) at the moment and I musn't get too distracted!!
It's amazing how you always find such interesting courses when you can't do them...but thanks again and best of luck for your forthcoming venture setting up as a translator.
I plan to take the plunge myself in the New Year!


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