Residence Permit in Germany
Business Immigrants applying for a German Residence Permit
The ability to reside long-term and work or set up a business in Germany depends on your nationality. If you are from a country within the European Union, Switzerland, Liechtenstein, Norway, or Iceland, you are welcome to start your business without a visa or residence permit.
For citizens from countries not listed above (third countries), you will need a residence permit.
Residence permit for self-employed and foreign professionals from non-EU countries:
If you are planning to start a business or pursue self-employment in Germany, or if you are a foreign professional and are seeking a residence permit in Germany, you should consider the following:
I. Getting a residence permit
In order to get a residence permit (or Aufenthaltstitel in German), you must submit an application to the competent authority, which depends on whether you are currently abroad or you are already a legal resident of Germany.
If you are still living abroad, you must contact the German embassy or the German consulate general in your respective country, in accordance with § 71 Para. 2 of the Residence Act (Aufenthaltsgesetz, AufenthG). Local jurisdiction depends on your habitual residence (where you legally reside for most of the year).
If you are already a legal resident of Germany and plan to engage in self-employment, which is currently not permitted to you by virtue of ancillary provisions to the residence permit, an application is required. This must be addressed to the competent immigration authority (Ausländerbehörde) at your place of residence.
II. Residence permit for self-employment, § 21 of the Residence Act
Self-employed activities include all activities carried out by an entrepreneur in their own name, in their own permanent establishment, on their own account, and at their own risk. Self-employment must always be distinguished from an employment relationship.
1. General provisions on the right of residence
Citizens from third countries (neither the EU nor the EEA) who wish to pursue self-employment in Germany require a residence permit according to § 21 of the Residence Act. The residence permit for the purpose of self-employment is issued as a temporary residence permit for a maximum of 3 years, according to § 21 (4) of the Residence Act, provided that certain conditions are met. Subsequently, you can apply for a permanent resident permit (Niederlassungserlaubnis) in accordance with § 21 (IV) of the Residence Act if you have successfully implemented your business idea and furthermore fulfil the provisions for a secure livelihood. § 9 of the Residence Act regulates the requirements for a residence permit.
2. Assessment criteria for the issuance of a residence permit
The legal basis for issuing a residence permit is § 21 (1) of the Residence Act. Under that provision, a foreign national may be granted a residence permit for their own activities if the following conditions are met:
- there is an economic interest or a regional need,
- the activity can be expected to have a positive impact on the local economy, and
- the financing of the implementation is secured through equity capital or a loan commitment.
The criteria of § 21 of the Residence Act are examined, among other things, according to the:
- viability of the underlying business idea,
- entrepreneurial experience of the foreigner,
- amount of the capital investment,
- impact on the employment and training situation,
- and the contribution to innovation and research.
According to § 21 (3) of the Residence Act, foreign nationals over the age of 45 must prove that they have adequate retirement provisions.
- § 21 of the Residence Act regulates in further paragraphs special provisions for facilitating residence permits, for example when taking up self-employment after university studies.
3. Assessment of the start-up project with the involvement of expert bodies
When examining whether the general requirements of § 21 (1) of the Residence Act are met, the immigration authorities involve the relevant departments for the place of establishment, such as the Chambers of Crafts (Handwerkskammern, or HWK) or Chambers of Industry and Commerce (Industrie- und Handelskammern, or IHK). In the case of commercial activities in Berlin, this is basically the Chamber of Commerce and Industry (IHK) of Berlin. The task of the IHK is to represent the interests of the Berlin economy as a whole, including its members and founders.
After examining the general requirements of the residence permit, the immigration authority asks the IHK to issue a statement on the applicant’s planned business activities. This is not a binding decision, but rather an assessment which serves as a guide for the immigration authority to take the final decision on the granting of a residence permit.
The following documents must be submitted to the diplomatic mission or immigration office along with the application documents:
- Business plan, including capital and financing plan, earnings forecast for the next three years, and liquidity plan
The business plan must show that there is an economic interest or regional need for the planned activity. This is generally the case if a sustainable improvement in the sales or market opportunities of local companies is recognisable or if the creation or safeguarding of a significant number of jobs (credibly demonstrated) is present. Furthermore, the marketing of environmentally friendly or innovative products, as well as the establishment of a production site, may also justify the existence of the prerequisites.
An economic interest is generally not assumed in the case of retail or service enterprises that are purely oriented towards regional consumption. However, if there is a regional need, for example because without the offer there would be an existing or foreseeable undersupply in the region or the offer has a unique selling point, an exception may be considered.
If you intend to employ other staff in addition to yourself, you will be required to provide detailed information on the number, respective tasks and requirements for the position, as well as the forms of employment (part-time or full-time), salary and the expected period of employment. It is important to note that the actual implementation of the planned jobs may be reviewed after some time.
The earnings forecast (revenue expectations) for the first three years must be explained or presented in a comprehensible manner, e.g. by calculating prices, commissions or fees, and, if possible, supported with evidence. Such proof is not provided solely by submitting a “client list”. Rather, you should submit existing business relationships or (future) customer acquisitions together with existing offers and planned projects as detailed as possible. Furthermore, it is important to present competition and market analyses. These have to describe your competitive environment as well as the concrete demand of your product in a comprehensible way.
In the case of managing directors and other legal representatives of partnerships and corporations, an annual net income of EUR 24,000 must be earned according to the procedures of the Berlin Immigration Authority. Managing directors of a corporation prove the corresponding income through a managing director’s contract.
Managing directors of a corporation (e.g. GmbH, AG, UG) must hold the majority of the shares or at least the same number of shares as the other shareholder(s) in the company. The distribution of the shares must be proven in an appropriate form (e.g. articles of association or list of shareholders).
In addition, in the case of a corporation, entry in the commercial register or at least a notarial registration in the commercial register is required.
- Proof of capital or loan commitments
Furthermore, the need for capital and financing must be known and clarified. Business start-ups often fail due to underestimation of capital requirements and a lack of financing.
- Curriculum vitae (Resume)
A CV should also be included with the application documents. This must show that the applicant has the necessary professional and commercial qualifications to successfully run a business.
- Proof of qualifications
You must also submit proof of qualifications, such as university degrees or professional experience (e.g. job references, letters of recommendation).
- Proof of cooperation
Proof of cooperation is also important. If you do not yet have such evidence, you should submit declarations of intent or expressions of interest from potential or future business partners/customers.
- Managing director’s contract
In the case of corporations, proof of a managing director’s contract must also be provided.
- (Commercial) Lease
If you have already signed a (commercial) lease agreement, you must also present this to the authorities.
- Certificate of incorporation, articles of association, commercial register extract or notarial application to the commercial register, business registration
If your establishment process already permits, you should enclose the certificate of incorporation, the articles of association, and an extract from the commercial register or notarial registration to the commercial register or a business registration.
For existing companies, you must also include the following:
- Balance sheets of the last two years
- Business assessment (Betriebswirtschaftliche Auswertung, or BWA) of the last six months
- Income statement (Einnahme-Überschuss-Rechnung), if no balance sheet is prepared
- Tax assessment notices of the last three years (if available)
III. Residence regulations for (employed) skilled workers from third countries
1. Skilled workers (professionals) with completed training (vocational training or studies)
Pursuant to § 18a or § 18b(1) of the Residence Act, a residence permit may be issued to a skilled worker for the purpose of pursuing a qualified occupation for which the qualification they have acquired qualifies them. The requirements for the visa or residence permit are:
- There is a concrete job offer.
- Approval for employment has been granted by the Federal Employment Agency (Bundesagentur für Arbeit) in accordance with § 39 (2) of the Residence Act.
- In the case of an educational qualification from abroad, the equivalence of vocational training or the comparability of the foreign university qualification must have been established. As a rule, this must be proven by a certificate of recognition issued by the competent recognition authority in Germany.
- If a licence to practise a profession is required (in the case of regulated professions), it must be available or promised at the time of application.
- For persons over 45 years of age, proof must be provided of an adequate retirement pension or a gross salary of at least 55% of the annual contribution ceiling in the general pension scheme must be paid.
The residence permit for skilled workers in accordance with § 18a or 18b of the Residence Act is issued for a period of four years. If the employment relationship is limited to a shorter period, the residence permit is issued for that period. If the conditions for issuance continue to be met, the residence permit can be extended or a permanent residence permit may be issued.
2. The EU Blue Card for Academic Professionals
The EU Blue Card pursuant to § 18b (2) of the Residence Act applies exclusively to skilled workers with a university degree recognised as equivalent or a German university degree. To obtain an EU Blue Card, the following requirements must be met:
- There is a concrete job offer for employment that is appropriate to the qualification.
- If a license to practise a profession is required (in the case of the regulated professions), this must be available or promised at the time of application.
- Annual gross salary amounting to at least two-thirds of the annual contribution ceiling in the general pension insurance scheme.
- For employment in certain occupational groups, the required salary limit is lower in the general pension scheme, at least 52% of the annual contribution ceiling. This applies, for example, to medical professionals, specialists in engineering, natural science and mathematics, and IT. In such cases, unlike in the general case, the approval of the Federal Employment Agency is required.
In principle, the EU Blue Card is issued for a maximum of four years. If the conditions for issuance continue to be met, the EU Blue Card can be extended. If the duration of the employment relationship is less than four years, it shall be issued for the duration of the employment contract plus three months.
3. Special case: IT specialists with practical professional knowledge from third countries
There is a special rule for the recruitment of foreign IT specialists, according to which applicants from third countries receive the approval for employment by the Federal Employment Agency in the IT sector, without the need for formal recognition of their qualifications by a competent recognition body in Germany (§ 19 (2) in conjunction with § 6 of the Employment Regulation (BeschV)).
The following requirements must be met:
- The applicant can demonstrate at least three years of professional experience in the IT sector within the last seven years, which corresponds to the qualification level of an academic specialist.
- The applicant should demonstrate the appropriate qualification by successfully participating in theoretical training or relevant IT examinations.
- The gross annual salary must be at least 60% of the annual contribution ceiling in the general pension insurance scheme.
- The applicant has at least B1 level of German knowledge based on the CEFR (Common European Framework of Reference for Languages). In individual cases, proof of German language skills may be waived, e.g. if it is not absolutely necessary for the potential job.
4. International students and graduates of German universities as potential for skilled workers
After successfully completing a degree in Germany, university graduates from third countries are allowed to stay in Germany in order to look for qualified employment. They are granted a residence permit for up to 18 months to look for a job in Germany (§ 20 para. 3 No. 1 Residence Act).
In addition, international students from third countries may obtain a residence permit for another purpose during or even before graduation in Germany, in accordance with § 16b (4) of the Residence Act:
- Taking up employment as a skilled worker (§ 18a; 18b of the Residence Act) or on the basis distinct practical professional knowledge (§ 19c Para. 2 of the Residence Act): Students may be sufficiently qualified to take up a qualified job without completing their domestic studies on the basis of previously acquired degrees or with the knowledge and skills acquired so far. In such cases, the purpose of residence may be changed if there is a concrete job offer. Upon application, the skilled worker will be granted a residence permit to pursue qualified employment.
- Admission of qualified vocational training (§ 16a of the Residence Act): This enables foreign students to switch to dual vocational training, e.g. if there is an offer of a training place, the corresponding residence permit can be issued upon application.
If you are planning on pursuing self-employment in Germany and do not want to go through the application procedure for the residence permit on your own, or simply have any further questions in this regard, we would be happy to help you.
We also support companies in the planning of assignments of foreign skilled workers as well as the specialists themselves who need legal support.