Non-European Citizen studying in Germany: Starting a Business?

Question

I am currently a Non-European Citizen (from Honduras) living and studying my master’s degree in Germany. I currently attend my last semester of university and I am also a working student. I expect my studies to finish in 6 months and after that my visa will change to a job-seeking visa or I will get a job. Presently, I want to do a business project via a crowdfunding platform. However, I am not very familiar with crowdfunding tax laws in Germany. In the event that the campaign is successful or not, I want to setup a company. Due to this, I am interested in knowing more about how to setup my own company here mainly for selling tangible goods via e-commerce. I intend to have this as a side business, and NOT to be self-employed full-time. I would appreciate if you could give me some consultation on my case or point me to someone who can advise me.

Answer

Thank you for your inquiry and your interest in setting up a business in Germany. Make it in Germany provides international professionals with information on working and living in Germany.

Regarding your residential status please consider the following:

Setting up a business while studying:
Before starting your own business, you should clarify if your residence status allows you to do so. As a foreign student in Germany, coming from a Non-EU country, you hold a residence permit for the purpose of studying according to §16 Residence Act. With that permit you are allowed to work 120 full or 240 half days per year without approval by the competent authority, the Federal Employment Agency. Taking up a self-employed activity while studying in Germany is also possible under the Residence Act (§ 21 (6) Aufenthaltsgesetz). However, the self-employed activity needs to be authorized by the foreigners’ authority (“Ausländerbehörde”) separately. The work must not hinder the success of the study. If you want to start a full-time self-employed activity, you will hardly get an approval. (Source: BMI, BAMF, DAAD)

Setting up a business after graduation:
As a graduate of a Germany university, you can run a business or work as an independent professional:
Setting up your own business: In order to set up your own business in Germany, you need a residence permit allowing you to exercise a self-employed activity (“selbstständige Tätigkeit”) (Section 21 Act on the residence - AufenthG). You can apply for this at your local foreigners’ authority. Find out more here.

Working as an independent professional: If you want to be self-employed in one of the liberal professions (“freie Berufe”), please apply for a residence permit that will allow you to exercise this kind of activity (Section 21 Act para. 5 on the residence - AufenthG). To do so, you will usually need to supply your CV, your final examination diploma of your studies, a description of the activity you intend to take up and a financial plan. Find out more here.

For first individual advice regarding visa issues, you can also contact the “Hotline Working and Living in Germany” on the following number +49 30 1815 – 1111. The hotline offers advice in German or English and is free of charge.

Even if you cannot wait to start your business activities, it is important to take your time and prepare adequately. For example, focus on drawing up a schedule. Setting up a business plan for your enterprise will help as well. Moreover, you will also need to consider personal coverage, taxes, laws and contracts that might be important for you while setting up a business.

Besides, there are many public information centres, which will advise you as you set up your own business. On the Startup Portal, under “advice and information”, you will find contact data of regional and national information centres for entrepreneurs with migrant background. A general contact list is available on the Startup Portal. Similarly, the Authority Finder also tells you about your nearest information centre. Especially the Chambers of Industry and Commerce (IHK) and the Chambers of Crafts (HWK) support new founders with information, consultancy and a range of seminars on founding your own business.

More step by step information regarding setting up a business in Germany are available on the website "Make it in Germany".

We wish you all the best for your future plans.

* Please note:
The information presented here is a general service offering. Only the German missions and the foreigners’ authorities are responsible for the issuance of visa or residence permits. For further questions, please contact the respective authority.

Reference: Justina Godesberg
Projekt „Make it in Germany“
Institut der deutschen Wirtschaft Köln e.V.
September 2020

Notice of the editor: