Emigration in view: Freelancers dread German bureaucracy

According to a survey by the Freelancermap portal, bureaucratic regulations such as bogus self-employment, but also a high tax burden, are increasingly driving freelancers to turn their backs on Germany. According to the survey, 10 percent of the freelancers surveyed have already emigrated from Germany. 54 percent would at least consider it and 14 percent are already making concrete preparations for emigration. Only 22 percent would not even consider leaving Germany. According to Freelancermap, over 500 freelancers from various sectors were surveyed.

According to the press release, the respondents complained about over-regulation. Countries such as Portugal offered better prospects, including less stress with social security systems and lower taxes. In a study conducted by Freelancermap in April, freelancers also expressed their desire for the German state to reduce bureaucracy (69%) and abolish the legal status of bogus self-employment (61%).

"The lack of legal certainty in particular reduces the willingness of many companies to work with freelancers despite their acute need," commented Freelancermap CEO Thomas Maas on the result. "The fear of having to pay social security contributions retroactively for several years after a tax audit is too great." According to Andreas Lutz, Chairman of the Association of Founders and Self-Employed Persons in Germany, this is particularly problematic for IT freelancers. According to Lutz, the number of contracts for IT freelancers has halved lately: "This means that contracts are being terminated and awarded to self-employed people abroad."

Status determination procedure: Passport A38 reloaded?

A study conducted in June by the Institute of the German Economy (Institut der deutschen Wirtschaft, IW), which is close to employers, had previously shown a similar sentiment: 35% of the freelancers surveyed would consider moving abroad and 27% would consider ending their self-employment. Younger, well-educated freelancers with high profits, many of them IT freelancers, were the most likely to consider such drastic steps.

One bureaucratic hurdle in particular is decisive for leaving Germany: the so-called status determination procedure. This procedure is used by German pension insurance to check whether a person is bogusly self-employed or not. A reform in 2022 was supposed to simplify the procedure, but critics point to ongoing legal uncertainties and a lack of reference to the reality of work, particularly for IT freelancers.

Almost 60% of the self-employed people surveyed by the IW who had gone through a status determination procedure stated that they had to put in considerably more effort to obtain new orders. Around a third had even lost orders because of this. 58 percent had felt overwhelmed by the procedure

(axk)