Can You Start a Business While Employed in Germany?

Can You Start a Business While Employed in Germany?

Yes. In many cases, you can remain employed and build a business on the side. In Germany, this is commonly called nebenberufliche Selbstständigkeit—self-employment carried out alongside your main job.

1. Check your employment contract first

Your contract or an applicable collective agreement may require you to inform your employer or obtain approval before starting a paid secondary activity (Nebentätigkeit).

An employer cannot necessarily prohibit every side business. However, legitimate business interests must be protected. The German Federal Ministry for Economic Affairs and Energy’s startup portal explains that employees may generally work independently on the side, while contractual notification or approval requirements still need to be observed.

Official guidance: BMWK Existenzgründungsportal – employer approval and registration

For clarity, notify your employer in writing and request written confirmation when approval is required.

2. Do not compete with your employer

Your side business should remain clearly separate from your employment. Avoid:

• approaching your employer’s customers;
• offering directly competing services;
• using confidential information;
• working on your business during paid working hours; or
• using company equipment, software or materials without permission.

Your side activity must also not reduce your ability to perform your main job. Keeping separate devices, accounts, working hours and client records can help prevent misunderstandings.

3. Register the activity correctly

A side business generally follows the same registration rules as a full-time business.

If your activity is commercial, you will normally register a Gewerbe with the local trade office (Gewerbeamt). If the activity qualifies as a liberal profession (Freier Beruf), you usually register directly with the tax office instead.

In both cases, new founders normally submit the Fragebogen zur steuerlichen Erfassung electronically through ELSTER so the tax office can issue a business tax number and record relevant tax details.

Official resources:

• ELSTER – starting a business or self-employment
• ELSTER – tax registration questionnaire for sole proprietors
• Federal startup portal – steps for starting a business

4. Check your residence permit

EU, EEA and Swiss citizens generally do not need a special residence permit to become self-employed in Germany.

For citizens of other countries, the wording and conditions on the residence permit matter. A permit issued for employment does not always automatically authorise self-employment. Check the permit and contact the responsible Ausländerbehörde before starting the activity when the permission is unclear.

Official guidance: Make it in Germany – residence options for self-employment

5. Inform your health insurer and check pension obligations

Tell your health insurer that you are starting a side activity. The insurer may assess whether your employment remains your main occupation by considering factors such as working time, income and the scale of the business.

Some self-employed occupations may also be subject to statutory pension-insurance obligations. This can apply, for example, to certain teachers, trainers, carers, craftspeople or self-employed people who mainly work for one client. The rules depend on the activity and business structure.

Official guidance: Deutsche Rentenversicherung – information for self-employed people

A practical pre-launch checklist

Before launching your side business, confirm that you have:

1. read the Nebentätigkeit clauses in your employment contract;
2. informed your employer or obtained approval where required;
3. checked that the business does not compete with your employer;
4. clarified whether you are a Gewerbetreibender or Freiberufler;
5. completed the required business and tax registrations;
6. checked your residence permit, if applicable;
7. informed your health insurer; and
8. reviewed whether pension or other professional-insurance rules apply.

TL;DR

• Yes, you can generally start a business while employed in Germany.
• Check your employment contract for notification or approval requirements.
• Do not compete with your employer or use company time, customers, data or equipment.
• A side business must still be registered correctly with the Gewerbeamt and/or Finanzamt.
• Non-EU citizens should confirm that their residence permit allows self-employment.
• Inform your health insurer and check whether pension-insurance obligations apply.
• Get individual advice when your employment, residence or business situation is unclear.

Need help setting up your side business?

Starting alongside employment can be a practical way to test an idea while retaining financial stability—but the setup should be handled correctly from the beginning.

Explore ExpatBusiness.de services or book a consultation

This article provides general information and does not replace individual legal, tax, immigration or social-insurance advice. Requirements can vary by profession, contract, residence status and personal circumstances.