Immigration Law: Chinese national seeks residence permit for establishing a restaurant.

Lower Saxony Higher Administrative Court, Decision of August 10, 2018, Case No.: 13 ME 49/18

Case Background: Application for Residence Permit and Career Path

The applicant, a Chinese national born in 1990, entered Germany in 2013 with a visa to work as a specialty chef at a Chinese restaurant in City A. He was granted a temporary residence permit under § 18(4) sentence 1 of the German Residence Act (AufenthG), allowing him to continue this employment until August 6, 2014. The permit was later extended in July 2014 until August 6, 2017.

In February 2017, the applicant applied for a permit to engage in self-employment. Specifically, he planned to lease the restaurant „C.“ in City A with a colleague, Ms. D., and operate it independently from June 1, 2017. The Chamber of Industry and Commerce (IHK) was involved in the decision process by the relevant authorities to assess the prospects of the business venture.

Denial of the Application and Arguments from the Authorities

In August 2017, the immigration authority rejected the application to extend the residence permit for self-employment. The applicant was instructed to leave Germany within one month, with a threat of deportation to China. Additionally, a 24-month entry and residence ban was imposed in the event of deportation. The authority argued that the conditions of § 21(1) of the Residence Act for granting a residence permit for self-employment were not met.

The IHK, as an expert body, expressed doubts about the viability of the business plan. Furthermore, the authority found that the applicant might be attempting to continue his previous employment as a specialty chef under the guise of self-employment. It seemed as though the proposed self-employment was merely a pretext to continue the non-self-employed work in the restaurant.

Another reason for the rejection was the lack of alternative legal grounds for extending the residence permit. The authority saw no basis under § 21 AufenthG or other provisions of the Residence Act to grant the requested residence permit.

Court Proceedings and Decision of the Administrative Court of Braunschweig

The applicant filed a lawsuit against the authority’s decision and also requested interim legal protection. The Administrative Court of Braunschweig ruled in favor of the applicant on January 18, 2018, and ordered the suspension of the deportation order. The court argued that the authority had made a discretionary error in its rejection.

According to the court, the authority should have exercised its discretion under § 21(1) sentence 1 AufenthG. It wrongly assumed that the conditions of § 21(1) sentence 1 Nos. 1 to 3 were not met, without considering that under § 21(6) AufenthG, foreigners holding a residence permit for another purpose may be allowed to engage in self-employment. The applicant had a residence permit under § 18 AufenthG and had applied for a new permit before the previous one expired. Therefore, he fell under § 21(6) AufenthG, meaning the authority should have reviewed the application at its discretion rather than applying the stricter requirements of § 21(1) AufenthG.

Appeal and Decision of the Higher Administrative Court of Hanover

The immigration authority appealed the Administrative Court of Braunschweig’s decision. The Higher Administrative Court of Hanover overturned the lower court’s ruling. In its decision of March 9, 2022, the court stated that the suspension of the applicant’s deportation had been wrongly ordered. The application for extending the residence permit was unfounded.

The Higher Administrative Court found that the applicant did not meet the requirements for extending his residence permit. Specifically, it ruled that there was no economic interest or regional need for the proposed self-employment, as required under § 21(1) AufenthG. Furthermore, the proposed activity did not promise positive effects on the economy, and the applicant lacked entrepreneurial experience.

The court also argued that the applicant did not possess sufficient language skills or knowledge of the German legal and societal systems necessary to successfully run a business. This lack of qualification was particularly concerning since the applicant intended to continue working primarily in the kitchen, while his business partner, Ms. D., would handle the financial and legal aspects. This reinforced the authority’s suspicion that the applicant was merely attempting to continue his previous non-self-employed work under the pretense of self-employment.

Moreover, the court ruled that § 21(6) AufenthG did not apply in this case. This provision only applies to foreigners who already hold a residence permit for another purpose and wish to engage in self-employment while maintaining that purpose. Since the applicant intended to change the purpose of his stay, this regulation was not applicable. There were no other legal grounds for extending the residence permit either.

Finally, the court confirmed the deportation order to China and the 24-month entry ban. There were no legitimate interests of the applicant that would prevent his departure. The applicant had no close ties to Germany, and since he did not meet the requirements for further employment as a specialty chef, another stay was not permissible.

In conclusion, the Higher Administrative Court of Hanover overturned the Administrative Court of Braunschweig’s decision, ruling that the applicant was not entitled to an extension of his residence permit.