How investing in Germany can qualify you for permanent residency
Making the right investments can qualify you for permanent residency in Germany: an attractive proposition. However, applicants need to overcome several obstacles to fulfil the criteria. It can also be tricky to get reliable investment advice from experienced sources. In this article, Schlun & Elseven Rechtsanwälte outline the requirements which need to be met when applying for German residency by investment.
Situated at the heart of Europe, Germany offers excellent opportunities for investors from around the world - and becoming a German resident ensures that you can benefit from all that Germany has to offer.
Not only can investing in Germany be very profitable for those who make the right moves, based on reliable advice, but it can also be a means to gain German residency, and later even German citizenship through naturalisation. This page will outline the requirements that need to be fulfilled if you want to gain German residency by investment.
Establishing an investment company in Germany: The visa requirements
Unfortunately, there is no “golden visa” or dedicated citizenship by investment programme in Germany. However, residency by investment is available to those who establish an investment company in Germany. Investing in real estate from abroad is not enough to fulfil the requirements - so applicants must establish a German investment company or invest in an applicable investment project.
For those looking to establish their own company, it is possible to do so under § 21 of the German Residence Act, which allows applicants to gain German residency for “self-employment”. This allows entrepreneurs worldwide to bring their business ideas to Germany and profit from the lucrative German market. However, before coming to Germany, most non-EU applicants will need to successfully apply for a self-employment visa. Your application should outline the following elements:
- Your business idea must fulfil an economic interest or a regional need.
- The activity must be expected to have positive effects on the German economy.
- The financing for realising the business plan must be secured by equity capital or a loan commitment.
To demonstrate that your business will fulfil the above requirements, you need to draft a comprehensive business plan. This business plan should show that your business will employ at least five people, and it needs to be thoroughly prepared, as it will be examined closely by the local Chamber of Commerce and Industry in Germany.
You must also be over the age of 18 and not have a criminal record. If you are over the age of 45, you must be able to prove that you have sufficient provision for old age (e.g. a pension plan). Other than that, there are no significant limitations on who can apply for this type of residency; it is open to entrepreneurs and investors globally. One of the benefits of the German procedure compared to other residency by investment programmes is that there is no language proficiency requirement.
In planning the visa application process, note that it generally takes between four and six months to conclude. Working alongside experienced legal advisors accelerates the process, as they will ensure that there are no significant issues with the application.
Financial investment requirements
When applying for German residency by investment, there is no set minimum figure for the amount you must invest. However, planning to invest at least 350.000 euros is recommended. Such a figure often demonstrates that the business will fulfil the criteria outlined above.
Compared to other European countries, this fee is quite reasonable. Of course, investors looking to the German real estate market and other appropriate projects can plan on much heavier investments.
When investing in Germany, it is beneficial to work alongside expert advisors to get insight into where good-quality investments can be made. Investing significantly in an investment project reflects well on your residence permit application.
Deciding on the business model
If you are establishing your own business, it is crucial that you follow the many requirements of German corporate law and establish the company correctly. These requirements differ according to the form of business you are creating.
A popular company form for residency by investment in the GmbH, equivalent to a limited company elsewhere. A GmbH is a limited liability company and a separate legal entity from the entrepreneur. Opening a GmbH costs more than other business models. On the other hand, since your company will have to cover a regional need and be of economic benefit, GmbHs tend to have more credibility and reliability. This credibility will be to your advantage during the application process.
A GmbH can own assets such as real estate. Setting one up requires at least one shareholder and a start-up share capital of 25.00 euros. Please note that, when setting up a GmbH, at least 25 percent of the cash contribution and the total non-cash contribution (where applicable) must be paid up-front before registration. GmbHs need to be registered with the appropriate commercial registry, and articles of association must also be drawn up.
German residency by investment
If your application is successful, you will be given a German residence permit that is valid for three years, although it can be extended for a longer period. If you seek to extend your residence permit, your business should still be active and in a stable financial situation.
After eight years in Germany, those with German residency can gain German citizenship by naturalisation. Your family - spouse and children under the age of 18 - can be included in your original residence permit application and, eventually, you can become German citizens together.
When you and your family are residents in Germany, you can benefit from the country’s world-class education and healthcare systems, and the German job market. Generally, you can achieve a very high standard of living in Germany. That being said, there is no set minimum amount of time an entrepreneur needs to spend in Germany once they have gained residency to maintain their status - although you do need to check in on your business in Germany. This is advantageous for investors with a global portfolio.
German citizenship through residency by investment
There are many advantages to German citizenship, such as the opportunity to be able to live, work, open businesses and retire in Germany and other European Union countries without visas and residence permits. The German passport is regularly recognised as one of the world’s strongest passports, as it grants the holder visa-free or visa-on-arrival access to almost 190 countries worldwide.
However, there is a general requirement that you give up your previous citizenship when gaining German citizenship. Some countries do not allow their passport holders to give up their citizenship, and other countries do not recognise dual citizenship. German citizenship may be in the best interest of you and your family and it will allow them to fully embrace life in Germany. For further advice on these matters, it is worthwhile to consult with a German immigration lawyer.
The procedure for gaining German residency by investment can be complicated, and seeking advice from experienced professionals is always recommended. The lawyers at Schlun & Elseven are happy to assist you through the entire process. Contact them today to find out how they can help you achieve your investment goals in Germany.