Foreigners‘ Law: Residence permit for self-employment and freelance activity according to § 21 of the Residence Act (AufenthG).

Residence Permit for Self-Employment: Legal Basis and Requirements

The issuance of a residence permit for engaging in self-employment for foreigners is governed by § 21 of the Residence Act (AufenthG). This regulation establishes the legal framework for foreigners who wish to start a business or take up freelance work in Germany. A residence permit may be granted if certain conditions are met:

Economic interest or regional need: There must be interest from the German economy or a specific need in the respective region for the activity.There must be an interest on the part of the German economy or a specific need in the respective region for the activity.

Positive economic impact: The activity should offer prospects of positively influencing the economy, such as creating jobs or promoting regional economic growth.The activity should offer the prospect of having a positive impact on the economy, for example by creating jobs or promoting regional economic growth.

Financial security: The project must be secured either through personal capital or a loan commitment. This ensures that the venture is sustainable and not likely to fail in the short term.The realisation of the project must be secured by equity or a loan commitment. This ensures that the project is sustainable and does not fail within a short period of time.

Criteria for the Decision: What Does the Authority Consider?

The decision to issue a residence permit for self-employment is at the discretion of the competent foreign nationals‘ authority. They carefully examine whether the above conditions are met. A key criterion is whether the self-employed activity serves a higher economic interest. This is typically the case when:

• • • Significant investments are made, such as capital investments amounting to several hundred thousand euros. for example in the form of capital investments totalling several hundred thousand euros.
    • Jobs are created or secured, which can be particularly crucial in economically weak regions. This can be particularly crucial in economically weak regions.
    • Long-term market opportunities for domestic companies are improved through the activity, such as through the export of goods or technological innovations. domestic companies are improved by the activity, for example through the export of goods or technological innovations.

Key Factors in Granting the Residence Permit: What Matters?

Various aspects play a decisive role in the issuance of the residence permit for self-employment. The most important criteria include:

• • • Viability of the business idea: The business idea must be well-thought-out and feasible. A detailed business plan demonstrating the potential of the enterprise and its market prospects is essential.The business idea must be well thought out and realisable. A detailed business plan outlining the potential of the company and its market prospects is essential.
    • CapitalisationCapitalization: The amount of available capital for implementing the business project is crucial. The higher the capital, the greater the likelihood that the project will be assessed as successful.
    • Applicant’s experience: Entrepreneurial experience, expertise, and a proven network in the relevant market area are often seen as positive indicators.Entrepreneurial experience, expertise and a demonstrable network in the relevant market sector are often seen as positive indicators.
    • Economic impactEconomic impact: The potential effects on the labor market, particularly in terms of training and employment opportunities, are examined by the authorities. Contributions to innovation and research, especially in high-tech industries, can also be decisive.
    • Sustainability and innovation: Sustainable business models and innovations, especially in areas such as environmental protection, energy efficiency, or digitalization, can tip the scales for a positive decision.Sustainable business models and innovations in the areas of environmental protection, energy efficiency or digitalisation in particular can be decisive for a positive decision.

Special Provisions for Turkish Nationals: Exception from § 21 AufenthG

For Turkish nationals, a special regulation applies. Due to Article 41(1) of the Additional Protocol to the Association Agreement between the European Economic Community (EEC) and Turkey dated September 12, 1963, § 21 AufenthG does not apply to them. This provision protects Turkish nationals from new restrictions within the framework of the association between Turkey and the European Union and guarantees them certain privileges during the transition phase of the association.

Facilitations for University Graduates and Researchers: Easier Pathways to Self-Employment

Foreigners who have successfully completed their studies at a state or state-recognized university in Germany may obtain a residence permit for self-employment under § 21(2a) AufenthG, subject to certain conditions. The same applies to researchers and scientists who already hold a residence permit in Germany. A key requirement is that the self-employed activity is related to the knowledge acquired during their studies or research. This particularly facilitates the transition to self-employment for well-educated professionals and encourages the use of their expertise in the German labor market.

Residence Permit for Freelancers: Special Regulations and Requirements

Freelancers who wish to engage in self-employment can also apply for a residence permit under § 21 AufenthG. However, unlike commercial entrepreneurs, they generally face different requirements. Since freelance activities are often not associated with large capital investments or job creation, freelancers primarily need to demonstrate the viability of their business idea and the economic benefit to the region. Typical freelancers include doctors, lawyers, tax advisors, artists, or journalists who can benefit from these special provisions based on their qualifications and experience.

Pension Provisions for Applicants Over 45: What Needs to Be Considered?

For applicants over the age of 45 who apply for a residence permit for self-employment under § 21 AufenthG, there is an additional requirement: they must provide proof of adequate pension provisions. This rule ensures that the applicant is financially secure in old age and will not rely on social benefits. The definition of „adequate“ is at the discretion of the authorities and is usually based on the individual’s lifestyle and plans.

It should be noted that this requirement does not apply to Turkish nationals.

Limitation of the Residence Permit and the Possibility of a Settlement Permit

The residence permit for self-employment is generally limited to a maximum of three years. During this period, the applicant must demonstrate that their self-employed activity is successful and that they are capable of supporting themselves independently. After three years, there is an option to apply for a settlement permit. The prerequisites for this are the continuation and success of the activity, as well as the permanent securing of the applicant’s livelihood and that of their family members. Settlement permit to apply for a licence. The prerequisite for this is that the activity is continued and remains successful. The livelihood of the applicant and their family members must also be permanently secured.

Long-Term Perspective and Integration: Success Factors for a Permanent Residence Permit

In addition to legal and economic requirements, the long-term perspective of the self-employed activity plays an important role. A well-developed business plan and a strategy for market expansion are essential. Integration is also increasingly viewed as a key success factor. Applicants who integrate into German society and contribute economically and socially enhance their chances of obtaining permanent residency. This can be supported through participation in integration courses, local networks, and the employment of German workers. Integration is increasingly seen as an important success factor. Applicants who integrate into German society and contribute economically and socially increase their chances of obtaining a permanent residence permit. This can be supported through participation in integration courses, local networks and the employment of German workers.

In summary, § 21 AufenthG provides a diverse framework for granting residence permits for self-employment. Thorough planning, sustainable business models, and consideration of economic and social factors significantly increase the chances of success.

If you need assistance with starting a business in Germany, we are happy to advise you.