This article explains the common contract structures for interim management in Germany. It is orientation, not legal advice. For any specific engagement, please consult a qualified lawyer – the assessment depends heavily on the individual case and case law continues to develop.
Companies filling a leadership position temporarily in Germany decide, almost in passing, a question with significant consequences: under which contractual relationship does that person work? The answer determines who owes social security contributions, whether an official permit is required, and how long the engagement may run at all. Classified incorrectly, a sensible bridge becomes a back payment.
This matters particularly for companies headquartered outside Germany. The German framework around self-employment is stricter than in many other jurisdictions, and the classification is made by the facts, not by the contract's title.
The three structures
1. Service contract with a self-employed interim manager
The standard case. The legal basis is § 611a of the German Civil Code (BGB): what is owed is the activity, not a specific result. The interim manager is self-employed, bills a day rate and carries their own entrepreneurial risk. This fits the typical interim mandate, where someone fills a function without delivering a separable work product.
2. Works contract (Werkvertrag)
Under § 631 BGB, a defined result is owed – something that can be accepted or rejected on delivery. This suits bounded projects: a system implementation up to go-live, an expert opinion, a restructuring concept. It rarely suits taking over a leadership position, because leadership is hard to describe as an acceptable deliverable. Signing a works contract for what is factually a service changes the label, not the legal position.
3. Temporary employment under the AÜG
Here a provider assigns an employee of its own to a company, which directs that person and integrates them into its own organisation. This requires a permit for temporary employment (Arbeitnehmerüberlassungserlaubnis) from the Federal Employment Agency. Two limits are central: the maximum assignment period of, as a rule, 18 months to the same hirer, and the equal-pay principle, which applies after nine months unless a collective agreement provides otherwise.
This model does occur in interim management, but it is not the norm – it fits operational specialist roles better than managing-director-level mandates.
Bogus self-employment: what actually decides
The most common mistake is assuming the contract label decides. It does not. What matters is how the engagement is actually performed. The test is § 7 of the German Social Code IV (SGB IV): employment is non-independent work, in particular within an employment relationship; indicators are working under instruction and integration into the work organisation of the party giving instructions.
Factors weighed in the assessment include:
- Subjection to instructions regarding time, place and manner of performance
- Integration into the operational organisation – an internal personnel number, appearing as a member of staff, embedding in internal processes
- Entrepreneurial risk – own equipment, own capital, the chance of profit and the risk of loss
- Several clients versus permanent work for only one
- Own pricing and the freedom to decline assignments
No single factor decides on its own. The overall picture is assessed.
The special case of a leadership role
Interim management creates a tension that other freelance engagements do not: someone filling a leadership position is by nature embedded in the organisation – they lead staff, sit in committees, take decisions in the company's name. Those are precisely the features that point towards employment.
For this reason the constellation is examined more closely than a pure project engagement. In practice, self-employment is supported by: a clearly limited mandate period, a mandate defined by outcome rather than an open task description, freedom in the manner of performance, own working equipment, parallel mandates, and a day rate that visibly reflects entrepreneurial risk.
The status determination procedure
Certainty can be applied for. Under § 7a SGB IV, the parties may request a decision on employment status from the clearing office of the German Federal Pension Insurance (Deutsche Rentenversicherung Bund). The procedure is voluntary and takes several weeks to months.
It is worth considering where the mandate runs long, a substantial amount is at stake, or the constellation is borderline – for instance continuous work for a single client over many months.
What incorrect classification triggers
If an auditor subsequently finds an employment relationship, the consequences fall primarily on the engaging company as employer:
- Back payment of total social security contributions – both the employer's and the employee's share. Recourse against the individual is only narrowly possible.
- Late-payment surcharges on the contributions owed.
- Wage tax consequences and possible corrections to input VAT deduction.
- Criminal exposure under § 266a of the German Criminal Code for withholding employee remuneration.
Where temporary employment has taken place without the required permit, an employment relationship with the hirer may come into existence under the AÜG, and a fine may follow.
What belongs in an interim management contract
Regardless of the structure chosen, the following points have proven useful:
- Mandate and target state – what should be achieved, not only what should be done
- Term and extension mechanics with a defined end
- Remuneration: day rate, invoicing cycle, treatment of travel and incidental costs
- Freedom from instruction as to the manner of performance, expressly stated
- Authority to represent – whether and to what extent the person may act externally
- Confidentiality, data protection, IT access
- Rights to work results
- Liability and proof of insurance – professional indemnity at an appropriate level
- Handover: timing, scope, recipient
- Termination provisions
The practical consequence
The contract structure is not a formality to be settled at the end. It follows from the mandate: commissioning a separable result leads to a works contract. Having a function filled temporarily leads to a service contract with a self-employed professional – and the self-employment must then hold up in practice, not just on paper. Integrating a person into your own organisation and directing them means you are in the territory of temporary employment and need the corresponding structure.
We clarify this classification before every mandate, together with you and the expert. More on interim management at consultingheads – or describe your requirement and we will discuss the contractual side as well.
Position as at September 2026. Subject to legislative change and new case law. This text is orientation, not legal advice.
