Setting up a business in
Germany: Do I need
10 August 2023
Germany is a popular destination of choice for international entrepreneurs and businesspeople looking to set up and run their own company in Europe.
The EU country offers many advantages for self-employed professionals including a dynamic economy, strong laws to protect intellectual property, government support and funding for business owners, and a diverse society with more than 10 million non-German nationals living in peaceful co-existence with locals.
In Germany, skilled professionals with strong business ideas are in demand, and the government offers various visa options for third country nationals looking to set up a business and contribute to the economy.
If you are considering Germany as a place to grow your business, you may need to apply for a visa which grants you permission to work in a self-employed capacity.
Do I need a visa to set up a business in Germany?
Whether you need a visa to set up a business in Germany depends on your nationality.
Citizens from the European Union, Iceland, Liechtenstein, Norway and Switzerland benefit from free movement meaning they do not require a visa or a residence permit to set up a business in Germany.
Citizens from other states will need a residence permit for the purpose of self-employment (Aufenthaltserlaubnis zur Ausübung einer selbständigen Tätigkeit).
If you are already in Germany and you hold a valid residence permit for another purpose or a visa which was granted explicitly for the purpose of self-employment, and if you have already planned your business and laid down your business plan in writing, you can apply for a residence permit for the purpose of self-employment at the Foreigners’ Authority.
If you are still residing in your home country, you will need to apply for permission to enter Germany to set up your business. In this case, you will need to apply for a visa for the purpose of self-employed occupation at your local competent German mission.
The German mission abroad will send your visa application to the Foreigners’ Authority at your future place of residence in Germany. Processing your application will usually take two to four months. If your application is successful, you will be granted an entry visa which is usually valid for a period of three months. Once you have arrived in Germany, it will need to be converted into a residence permit by the immigration authority.
You will not require an entry visa if you are a citizen of Australia, Canada, Israel, Japan, the Republic of Korea, New Zealand, the UK or the USA. Citizens of these states can enter Germany without a visa and will then have to apply for a residence permit within three months of arrival.
What are the visa options for setting up a business?
In Germany, there are two ways of setting up your own business. You can either:
- Work as a freelancer (Freiberufler), or;
- Set up a business as a self-employed entrepreneur (Gewerbe).
More information on which type of business is most suitable for you can be found here.
The type of business you choose to set up will determine the type of visa you will need to apply for.
Visa for freelance business
If you would like to work in a freelance capacity as a Freiberufler, you will have to apply for a “residence permit for the purpose of freelance employment” (Aufenthaltserlaubnis zur Ausübung einer freiberuflichen Tätigkeit) at the competent authority.
When you apply, you will need to prove that:
- You will be able to finance your undertaking.
- You will be able to make a living for yourself.
- You have the necessary permission to practice in your profession, where needed.
- You have adequate pension provisions (if you are over 45).
If your business idea is successful and you are able to make a living for yourself and your family as a result of your business, you can have your residence permit extended, which is initially limited to a maximum of three years. After five years, you can obtain a settlement permit, which will allow you to settle in Germany permanently.
Visa for self-employed business
If you wish to set up a business as a self-employed entrepreneur, you will have to apply for a residence permit for the purpose of self-employment.
To obtain this permit, you will need to fulfil a number of general criteria and submit a convincing business plan that shows:
- There is commercial interest or regional demand for your products or services.
- Your business activity is likely to have a positive impact on the German economy.
- You have secured financing for your business by way of capital or a loan commitment.
If you have graduated from a German university, or if you have a residence permit for the purpose of research and you would like to set up a business related to your academic degree or your research activities, you do not need to fulfil the above requirements.
Anyone applying for a residence permit for the purpose of self-employment who is older than 45 will need to prove that they have adequate pension provisions.
If your business idea is successful and you are able to make a living for yourself and your family, you can have your residence permit extended, which is initially limited to a maximum of three years. After only three years, you can obtain a settlement permit, which will allow you to settle in Germany permanently.
How much does it cost?
When you apply for a German visa, residence permit, settlement permit or an extension of any of these documents, you will usually need to pay an application fee. The amount you must pay will depend on your location as well as the duration and purpose of your stay.
A residence permit will cost you a maximum of €100 while a settlement permit will cost €147 at most. As a rule, the fee for visas is €80. For more information on German immigration fees, please consult the competent foreigner’s authority or mission abroad.
Support with German immigration
Smith Stone Walters is delighted to announce that we have recently expanded our international reach and opened a new office in Germany.
Our Frankfurt based team are on hand to locally facilitate all German inbound immigration work with the highest level of service.
To find out more about the services we can offer, please call 0208 461 6660 or email firstname.lastname@example.org.
Disclaimer: In accordance with the German law governing legal advice and services (RDG, section 2 subsection 1) our services do not include any legal advice.