When it comes to business immigration, Germany is rightly viewed as one of the top destinations in the world. As the largest economy in Europe and the world’s third-largest export nation after China and the USA, it attracts investors and entrepreneurs from all over the world. And with its highly educated workforce, advantageous location at the heart of Europe, and political, social and legal security, Germany offers excellent conditions for setting up a business.
But starting a business in Germany isn’t as simple as booking a flight and beginning to trade. If you’re from outside the EU, you first need to secure your right to live and work here. For many people, this means obtaining a residence permit for the purpose of self-employment. Here’s what you need to know.
What counts as self-employment in Germany?
If you would like to live in Germany and be self-employed, you should consider getting a Residence Permit for Self-Employed Individuals, pursuant to § 21 of the German Residence Act. For the purposes of this residence permit, self-employed activities include commercial activities such as wholesale and retail, import and export, working as a broker, and even hospitality ownership.
The term also covers freelance activities. So, if you intend to work as an artist, journalist, engineer or architect, you may be granted a self-employment residence permit. Partners and managers of companies such as the KG or the GmbH can also be considered self-employed persons.
If you’re not sure whether you fall under either of these categories, there are a number of resources on the internet and elsewhere that explain exactly how German law defines self-employment.
What are the requirements for the German self-employment visa & Residence permit?
In many cases, a visa is required to enter Germany. For the purposes of self-employment in Germany, you can apply for a national D-Visa at the German embassy in your country of residence. The requirements for obtaining the visa usually correspond to those for the resident permit.
Although it is possible to obtain a residence permit for the purpose of self-employment under simplified conditions, generally there are three requirements that must be met:
- An economic interest or a regional need must apply.
- 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.
When you make an application, the competent authority will verify your compliance with these requirements by means of certain criteria. Primarily, they will examine and consider the viability of your business plan, your entrepreneurial experience and the level of financial investment. Equally important are your project’s effects on the employment and training situation in the area, as well as its contribution to innovation and research in Germany.
If the applicant has successfully completed studies at a German or state-recognised university or a comparable educational institution in Germany or holds a temporary residence permit as a researcher or scientist, not all the above-mentioned requirements need to be met. In this case, however, the acquired qualification must be related to the intended self-employed activity.
Proof of a minimum investment amount or the creation of a certain number of workplaces is not required to obtain a residence permit. Nevertheless, sufficient capital for establishing and managing the business according to the business plan should be available.
Applicants over the age of 45 must also provide proof of adequate pension provision.
What are the benefits of getting a residence permit for self-employment in Germany?
The residence permit for the purpose of self-employment has several advantages. Firstly, no proof of any knowledge of the German language is required and it is not necessary to present specific professional qualifications.
Although the residence permit is generally limited to a period of three years, you do get the prospect of being granted permanently settled status in Germany. In future, you may be granted a settlement permit, if you are able to show that the planned activity has been carried out successfully and that you have an adequate income to secure your subsistence. After six years, self-employed individuals can obtain German citizenship, under certain conditions.
Additionally, if you have a spouse or any dependent children, your status as a self-employed individual grants them the right to family reunification visas.
The procedure for obtaining a residence permit for self-employment
Since any application for a residence permit is subjected to detailed examination by the competent authority, it is advisable to spend some time thoroughly preparing.
First, you should draft your business plan, as well as a capital requirement and financing plan. Later, your business plan will be examined by the regional Chamber of Industry and Commerce, before you submit your D-Visa application to the German embassy in your country of residence. After obtaining your visa and entering Germany, you can register at your local immigration authority. You only apply for your residence permit, by submitting all the necessary documents, once you have arrived in Germany.