A guide to contracting in Germany

Contracting in Germany

11th April 2018

For the next installation in our worldwide guide, we visit Germany.  The country has a lot to offer, with 16 national parks for hiking enthusiasts and an impressive food and drink market for culinary lovers. And for professionals thinking of contracting in Germany, current signs are all pointing towards positivity with growth forecasts reaching 2.6 percent for this year.

A tech hub

Looking specifically at the sectors that contractors are most likely to find rich with opportunities, the tech field is certainly one to keep an eye on. There’s a lot of investment in technology in Germany at the moment, with Google recently announcing that it is donating €1 million to the Technical University of Munich as part of its partnership to drive research and innovation in AI, machine learning and robotics.

And with the recent approved ban on diesel cars in city centres, it is perhaps fair to say that demand for expert energy professionals will increase in the very near future as the country strives to meet its clean air targets.

Contracting in Germany: the legalities

As with many European locations, contractors will find that compliance, tax and visa requirements in Germany aren’t too dissimilar to other EU countries. However, there has been a recent amendment to labour leasing laws that you will need to be aware of.

At the moment there are two key routes to gaining work in the country: the self-employed contract model, or the German Temporary Employment Act which is known as the “AUG model”. In order to clampdown on the misclassification of workers, authorities now require contract professionals to be formally assigned under one of these models before the assignment begins. This has, understandably, led to a rise in administrative demands and due diligence requirements for all parties involved. Particularly as the tests for self-employed status are stringent and demand the individual actually is self-employed!

These new rules also state that temp workers can only be leased to a company for a maximum of 18 months, and there must be a direct employment relationship between you and the intermediary if this route is chosen. There’s also been a retraction of the ‘parachute mechanism’ which previously allowed a supplier with a valid AUG license to move a contract model worker across to their AUG model following a reclassification status.

It is also important to bear in mind that securing an AUG license is both complex and lengthy, so will need to be arranged as soon as possible. You will find that forms will need to be completed in German and English, so ensure you have the resources to hand to achieve this.

Use an expert

Of course, the sure-fire way to ensure that you remain fully compliant when contracting in Germany is to get on-board with an expert contractor management organisation. We not only offer compliance peace of mind, but we also remove the hassle of administration and chasing payments, freeing up your time to focus on the job at hand.

Contact the team today:


Live chat with one of our expert staff

Like our LinkedIn page

Follow us on Twitter

Get in touch on Facebook

Contact Us