Freelancer FAQs

Who should register on this portal?

This AMS freelancer portal is aimed at self-employed persons especially in the pharmaceutical field service or in the medical device field service (in each case practice and/or clinic and/or pharmacy), who – depending on availability – work on a daily rate or hourly rate basis or on a price per call basis – as well as to former non-self-employed sales representatives (m/f/d) from these areas who wish to become self-employed in the aforementioned fields of activity in an appropriate manner.

Can I also register as a pensioner and work on a self-employed basis?

Yes, you can also register as a pensioner and work on a self-employed basis alongside your pension. To do so, you should already have sufficient experience in the pharmaceutical sales force or in the medical device sales force (either in a practice and/or clinic and/or pharmacy), be mobile and feel fit enough to cope physically and mentally with a sales force job.

Please note that pensioners can also be assumed to be so-called bogus self-employed if certain criteria are met and read what is written about this in these FAQs (in the list of links below).

What distinguishes self-employed people from employees?

While salaried employees have fixed employment relationships, set working hours and a fixed monthly income and are subject to their employer’s right to issue instructions, the gainful employment of a self-employed person is much more flexible:

Self-employed people are independent and their own boss. As a rule, they have clients who change more quickly, more freedom to make their own decisions, more self-determined working hours, a rather irregular income, which can, however, be higher than that of employees. They are free to decide which jobs they accept and on what terms, but are always in competition with other self-employed people. They must therefore ensure that their offers remain attractive enough to attract sufficient orders.

Freelancer or trader?

Freelancer

Freelancers are practitioners of the so-called ‘liberal professions’. It is specified which liberal professions they are: A liberal profession – also known as a freelance profession – is an independently practised profession, either scientific, artistic, writing, teaching or educational.
The liberal professions are categorised into 4 groups:

• Healing professions, which include, for example, doctors, dentists, pharmacists and physiotherapists.
• Legal, business and tax consultancy, such as lawyers, notaries, tax consultants and auditors.
• Technical or scientific, such as architects and engineers as well as biologists and computer scientists.
• Cultural, such as writers, editors and directors.

The decisive factor here is not what professional training you have, but only the type of work you do. A biologist in the pharmaceutical sales force, for example, is not working in the natural sciences and is therefore not a freelancer.

This is the only correct definition, even if the term is widely misused on the Internet. However, it is not simply a term that can be used arbitrarily, but a fixed term for a defined legal status.

A freelance activity is not a trade under German law and is therefore not subject to the trade regulations or trade tax.

Tradesman

If you are self-employed and not a freelancer, you are considered a trader. Most self-employed activities are commercial, freelance activities are the exception rather than the rule.

Note: Self-employed pharmaceutical consultants – regardless of whether they work in a practice, clinic or pharmacy – self-employed medical product consultants, self-employed product consultants, self-employed salespeople and sales representatives are all classified as commercial professions, regardless of the individual’s educational background.

What job prospects do I have as a freelancer?

Freelancers occupy niches in the labour market that would be out of the question for employees due to the time constraints of the assignments. However, employers increasingly require flexibility in the services they provide, which they would not be able to realise with permanent staff. This plays into the pockets of freelancers and secures their order situation.

There is another aspect to this: when hiring a freelancer, it is primarily their performance, possibly their experience and their price that count, rather than the person as such, their references or their career. The situation is completely different for non-self-employed people. Because employers retain permanent staff for a longer period of time and integrate them into their own company structure, great importance is also attached to the applicant’s personality, career, references, etc. when selecting personnel.

For this reason, offering your services as a freelancer can be a way out for applicants who find it difficult to get a job on the labour market. Being self-employed instead of unemployed: whether on a permanent basis or as a bridge to the next permanent position – a promising perspective!

What flexibility does self-employment offer in terms of working hours and holidays?

As a self-employed person, you don’t have set working hours or regulated holidays. However, you can organise both at your own discretion.

Of course, every agreed project task requires a certain amount of work. It is also not possible, for example, to schedule necessary customer visits on Sundays and public holidays because it suits you at that time, but they must essentially take place during the business hours of the customers to be visited. Beyond this, however, you can organise your working hours as you see fit and as you are able. For example, it is conceivable to allow yourself a little more time off on other days in return for additional work. There is no rigid working time concept for self-employed people, as is usual for non-self-employed people. For the self-employed, holiday means time off work. You decide when and for how long you have holiday, mainly by setting time intervals between your assignments. Some holidays can also arise unintentionally, for example if you are unable to secure a seamless follow-up order. This is also part of being self-employed. It is true that you do not earn any money during such time off. However, your income as a freelancer during your assignments is usually higher than that of a non-self-employed person. What counts for freelancers in the end is their annual income, regardless of how regularly or irregularly it accrues to them.

What are the advantages of registering on the AMS Freelancer Portal?

In principle, freelancers look for their clients themselves. However, such constant customer acquisition can be time-consuming and arduous. Especially when you are working at full capacity with a contract job, you have to invest additional time and look for follow-up jobs – if you don’t want to be left empty-handed after completing the current project. This is a dilemma that self-employed people can easily find themselves in. What could be more convenient than having others look for you? That’s exactly what AMS does.
By registering on the AMS portal, you benefit from AMS’s continuous customer acquisition activities and our existing network of customer contacts. As a freelancer, you would have to go to great lengths to build up such a network in the first place. And – not only freelancers register in this portal, but also client companies that have a current or regular need for freelancers. This also increases your chances of being commissioned by AMS for client assignments. Your business advantage is thus combined with a business advantage for AMS. Achieving more together. That’s what AMS offers you. And how do you get this advantage? Simply by registering in our portal. Be there instead of being left out. That’s what matters for freelancers.

Is there a charge for registration?

No. Registration is free of charge. All associated services from AMS are also free of charge. Our economic advantage lies in our co-operation in winning joint projects. Our success is also your success.

How do you become self-employed?

Liberal professions

If you want to practise a ‘liberal profession’, all you need to do is notify your tax office – in writing, if possible. As a rule, you will receive your own tax number for this activity. The tax office will also inform the relevant Chamber of Industry and Commerce, of which you will also be a compulsory member as a self-employed person. It is not necessary to register with the local trade office because practising a ‘liberal profession’ is not considered a trade.

Commercial activity

As a rule, the self-employed activities on this portal will be of a commercial nature. In order to become self-employed as a trader, you must apply for or register the intended trade with the local trade office before you are allowed to start.
Trades requiring a licence
In Germany, there is freedom of trade, which means that no special licence is required to carry out most trades. However, a special licence is required in some sectors. These include, for example, the operation of a pharmacy, temporary employment, banking and financial services, property development/construction management, security services, retail trade, financial investment brokerage, catering and hotel business, wholesale trade, goods transport, skilled trades, hospitals, brokerage, passenger transport, expert activities, insurance consultancy and brokerage, property management. This exemplary list does not claim to be exhaustive. To be on the safe side, you should therefore consult the relevant trade office if in doubt.
When applying for a business requiring a licence, various documents must be submitted, such as a police clearance certificate, an extract from the central trade register, a clearance certificate from the tax office, etc. Ask your local trade licensing office about this or find out more on their website.

Trades that do not require a licence

Most of the self-employed activities for which you can be commissioned via this portal do not require a licence. These include self-employed pharmaceutical consultants – whether working in a practice, clinic or pharmacy – self-employed medical device consultants, self-employed product consultants and, in some cases, self-employed sales representatives and commercial agents. For the latter two, however, there are also exceptions requiring a licence depending on the product groups (see above).
A trade that does not require a licence only needs to be registered with the local trade office. The business registration must also take place before commencing commercial activity. The business must be registered on a form available from the trade office, which can also be downloaded from their website. There you will also find information about the registration fees and any documents that need to be submitted. The registration counter-confirmed by the trade office serves as proof that the business has been registered. This document is also known as a ‘trade licence’. It is issued to you immediately after registration.
The trade office will then inform all other relevant authorities, such as the tax office and the Chamber of Industry and Commerce, about the business you have registered. They will then approach you of their own accord with their concerns (e.g. estimate of revenue development). So all you have to do is wait and see.

Taxes and duties as a freelancer

All income of a self-employed person is gross income. As a self-employed person, you pay all taxes and duties on this income yourself.

Taxes

If you do not have to make any advance tax payments – i.e. especially during the start-up period as a self-employed person and if you only have a low income – tax payments are only due in the following year after the tax return. You should keep this in mind and build up sufficient reserves from your income to be able to pay taxes later.

What types of tax are due for self-employed sole traders?

• Freelancers pay income tax and VAT. As a small business owner, you can be exempt from the latter up to a certain annual income.
• Tradespeople also pay income tax and VAT. They can also be exempt from the latter as small business owners up to a certain annual income. However, there is an additional tax for tradespeople, namely ‘trade tax’. The latter only applies from a certain annual income. Its amount depends not only on the calculable income, but also on a so-called assessment rate, the amount of which can be set individually by each municipality. Ask your local authority about the applicable rates.

Self-employed persons are obliged to keep proper accounts. A simple income statement is often sufficient for this – also up to a certain income. However, this must also be set up correctly. It is best to leave the bookkeeping in the expert hands of a tax consultant. Then you are on the safe side.

Insurance

As a self-employed person, it is up to you to decide whether and how to insure yourself.
You can take out health insurance with statutory health insurance funds in the self-employment tariff (usually income-dependent) or with private insurers (risk-dependent).

You can make voluntary payments into pension funds or choose a different form of insurance or investment as a pension plan.
Other insurance policies that are recommended or should be considered could be, for example: company accident insurance, occupational disability insurance, company liability insurance or company legal expenses insurance.

Seek advice from your insurance providers.

When are you considered bogus self-employed and how can you avoid it?

Self-employed persons are generally not subject to social security contributions. They are not obliged to pay health, long-term care, unemployment and pension insurance contributions. However, if you are not self-employed, you are obliged to pay social insurance contributions.

This difference is significant for the social insurance funds. If someone pretends to be self-employed but in reality works largely as an employee, the social insurance funds are deprived of the income to which they are entitled. No wonder they don’t like this and try to uncover apparent self-employment wherever possible. If they succeed, the consequences for both the bogus self-employed person and their client are considerable.

The social security contributions owed by both parties must then be paid retroactively for years. This can add up to considerable sums. Fines may also be imposed.
In addition, if the supposed freelancer is discovered to be a bogus self-employed person, he automatically becomes an employee of his client with salary entitlement, protection against dismissal and all the benefits of a perhaps even long-serving employee.
Finally, the offence of tax evasion may also be committed, at least if there was also intent involved.

Everything has very unpleasant consequences for both sides, which should be avoided as far as possible by avoiding bogus self-employment yourself. Often enough, it is not entered into intentionally, but rather unknowingly, negligently or even in the best belief that you have done everything right.

When are you considered to be bogus self-employed?

There is no clear answer to this question. Rather, the overall picture of the respective activity is assessed. If it is only described as self-employed in the contract, this has no significance whatsoever. What counts is how the activity is actually ‘lived’. However, if the (bogus) self-employed person is described in the contract as an employee, worker or salaried employee, this would already be a strong indication of actual bogus self-employment.

Over the decades, there has been a whole range of characteristics that have been used to determine bogus self-employment. The relevant criteria have changed time and again. The criteria listed below may also become outdated at some point. Nevertheless, they provide a good indication of whether you are on the safe side with your type of self-employment or not.

Permanent and decisive

A currently essential criterion for classification as self-employed or bogus self-employed is whether the person concerned
permanently and significantly works for a single client.
client. If both criteria are met, it is highly probable that the person is a bogus self-employed person. However, the terms ‘permanent’ and ‘substantial’ are not specified in more detail. This leaves plenty of room for interpretation.
‘Permanent’ can certainly be assumed if you work permanently for a specific client. If you want to avoid such permanence, you could therefore try to acquire different clients in the current year.
‘Significant’ means that – in the case of several clients – you work predominantly for only one of them or, in the case of only one client, you work exclusively for him alone. However, it remains unclear where to draw the line in the former case of multiple clients. It used to be the case that you should not make more than 5/6 of your annual turnover with a single client (the ‘five-sixths rule’). However, this rule has not been applied for some time now and therefore seems to have lost its significance.

Conclusions

Temporarily working exclusively for a single client is not critical as a result of the above-mentioned rule because it does not fulfil the pseudo-self-employment criterion of permanence.
According to this rule, it is also possible to work for a client on a permanent basis, provided that the work is not carried out primarily for this client at the same time.

Being bound by instructions

Another important criterion is whether the client issues instructions that must be followed. This would be expressly typical of an employee. However, the boundaries here are also fluid. Of course, a client can issue instructions, e.g. in connection with the project order. If I give my car workshop the order to repair my car, this is such a comparable specification, but certainly not an indication of being bound by instructions – especially since the workshop (like any self-employed person) can reject the order with its conditions. However, if I were to instruct the car mechatronics technicians working on my car how to do something during their day-to-day work, then that would be an instruction. In the pharmaceutical field service, a project order may include visiting a certain number of target persons within a specified period of time and discussing the product/preparation with them in a certain, specified way. Such a requirement is necessary because otherwise the field service assignment would not make any sense. Such a project task can also include the order, number or frequency in which A-, B- and possibly C-classified customers are to be visited. This certainly does not mean that the employee is bound by instructions. Only if instructions are issued during the course of the project that go beyond the project specifications and the person carrying them out follows them can it be assumed that the employee is bound by instructions.
In order to prevent an unwanted impression, it is advisable to specify everything that can be regulated in the project order and to name it there completely, precisely and in detail instead of having it communicated by a contact person of the client (in ‘superior manner’) during the project. In the latter case, the impression of being bound by instructions could easily arise, but certainly not in the case of formal and objectively necessary conditions within the framework of a project order.

Reporting

Reporting obligations, i.e. reports on what has been done, when, how and where, and what has been achieved, are closely linked to the obligation to follow instructions. As with instructions, a distinction must also be made here between project requirements and what goes beyond them. Let’s take the example of the car workshop. As the customer/client, I naturally have the right to find out from the contractor what was ultimately done to the car. This – certainly unproblematic – reporting usually takes place with the invoice. The foreman may also provide me with additional information. However, I would not have the right to know more. In the example of the pharmaceutical field service, there is also indispensable information, the reporting of which should not yet justify bogus self-employment, e.g. the number of calls made as agreed, which target persons were visited and what the results of the discussions with them were. However, it should be carefully checked which information is really necessary for the project and which is not. Omitting the latter helps to prevent the impression of bogus self-employment. For the same reason, it is also helpful to list the type and objective necessity of the reporting aspects in full in the project order and to justify them if necessary. Anything beyond this would then merely serve as an employee-like control and is therefore prohibited for ‘clean’ self-employed persons.

Work equipment

Self-employed persons use their own work equipment. This can include computers, office consumables (e.g. own company paper), a mobile phone or even a car used for business purposes. There are only a few exceptions to this rule, particularly if it is essential to use the client’s equipment in order to complete the project. For example, if a self-employed IT specialist needs to find and rectify a fault in his client’s computer network, there is no other option than to work with the client’s computer network.

Remuneration

The self-employed person’s remuneration usually varies depending on the project, the competitive situation of the self-employed person and their negotiating skills. If, on the other hand, the self-employed person receives regular remuneration at a constant level over long periods of time, this is more likely to indicate employee-like remuneration and thus points to possible bogus self-employment.
Invoices
Self-employed persons issue invoices. They do not receive regular payments at the instigation of their client, as would be the case with employees who are not self-employed. It is not the client who has to work out what the self-employed person receives, but the self-employed person himself. The self-employed person is responsible for proper invoicing. And: no payment without an invoice. Invoicing yourself should therefore be in your own best interest.
There are also various things to consider with invoices.
For example, there are mandatory details that you need to know and provide as a self-employed person. You can download invoice templates from the Internet that contain placeholders for all mandatory information. The type of invoice documentation is also important (GoBD: the ‘Principles for the proper keeping and storage of books, records and documents in electronic form and for data access’). For example, it must not be possible to change the invoice once it has been issued. Open Word or Excel files are not permitted for this purpose. The easiest way is to print it out and send and document it in the traditional way as a paper document. Or you can scan the printout again and send and document it as a PDF file. The document can then no longer be changed. However, simply converting a Word or Excel file into PDF format, e.g. with ‘Save as…’, is not sufficient. The content of PDF files created in this way can be changed very easily using suitable programmes – almost like word processing files

Appearance

A self-employed person also appears as such to the outside world. For example, he uses his own business cards (not those of the client) – if necessary with a note “On behalf of…”. He may run his own website where he advertises his services. A self-employed person uses their own business stationery, possibly with their own logo, and seeks orders in the usual manner in the industry. All of these are additional tips for actually becoming self-employed. The more you can show, the more this speaks against the existence of false self-employment.