Setting up a business - Ways to self-employment

Preconditions for starting up a business in Germany

The law of residency (AufenthG) stipulates the preconditions under which a self-employed activity may be taken up and exercised.

Citizens from an EU member state:

“Labour mobility” and “freedom of trade“ apply within the EU member states. Thus, EU citizens may start up companies in any of the member states. In order to do so, they need only inform the registry office.

Citizens from a non- EU country:

In the case of a self-employed activity, there must be an overriding economic interest or a particular local need. This is usually the case if you invest at least € 500,000 and create at least five jobs. If these conditions are not fulfilled, the preconditions are assessed in terms of the viability of the business concept, previous business experience, the level of the investment, the impact on the employment and training situation, and the contribution to innovation and research. To this end, the foreigners authority (Ausländerbehörde) will prepare its decision by contacting the relevant trade authority (Gewerbebehörde), the relevant chamber of industry and commerce, chamber of crafts or other public-law professional body.

Foreigners already resident in Germany who receive a residence permit for a purpose other than that of self-employed activity can have their self-employed activity permitted by the foreigners authority.

If your legal place of residence is not in Germany, you need to submit an application for a “residence permit for the purpose of self-employed commercial activity” (Aufenthaltstitel zum Zweck der selbständigen Gewerbeausübung) to the appropriate foreign mission of the Federal Republic of Germany.

Foreign entrepreneurs from a non-EU country wanting to start up a company or an operation in Germany:

If your place of residence is located outside Germany, you have to apply to the responsible overseas agency (embassy or consulate general) of the Federal Republic of Germany for a visa to exercise a self-employed activity. You will receive a residence permit if there is an overriding economic or a particular regional interest in your stay in Germany. Reviewed will be the economic weight of the plan and its impacts on the labour market as well as on research and innovation.

As a rule, those entrepreneurs investing at least one million euros and creating at least ten jobs receive a residence permit.

Further comprehensive information can be obtained at www.gtai.com/homepage (www).