Immigration Law: Russian citizen wants to live and work in Germany as a construction contractor

Administrative Court of Berlin, Judgment of May 25, 2022 – 12 K 215/21 V

Background of the Case: Application for a Visa for Self-Employment

The plaintiff, a Russian citizen born in 1974, has been living with his family in Mallorca, Spain, since 2018. He is an entrepreneur in the construction and hotel sector and holds a residence permit in Spain due to real estate investments. Since 2019, he has also owned a house in Wuppertal, Germany, where he wishes to live with his family. The plaintiff is the sole shareholder and one of the managing directors of L1 GmbH, based in Duisburg. This company operates in the real estate sector and has already renovated a listed building, the so-called Kupferdreh-Palais in Essen, converting it into a residential building.

In September 2017, the plaintiff applied for a visa for self-employment in Germany at the Consulate General in St. Petersburg. He submitted a statement from the Niederrhein Chamber of Industry and Commerce, predicting positive economic effects from his projects on the regional economy. Additionally, a business plan was submitted, proposing the construction of further real estate projects in Essen, including a multi-family house. The plaintiff argued that his constant presence in Germany was necessary to successfully implement the construction projects.

Rejection of the Visa Application and the Consulate’s Arguments

The Consulate General rejected the plaintiff’s application in May 2018. The reasoning stated that the necessity of the plaintiff’s permanent presence in Germany had not been demonstrated. Furthermore, it was unclear to what extent L1 GmbH was actually involved in the operational business. The planning of the Kupferdreh-Palais had already been done by the previous owner, and the operational business was largely handled by subcontractors. The Consulate saw neither a regional need nor an economic interest in the plaintiff’s activities, as the acquisition and management of real estate did not constitute self-employment within the meaning of the Residence Act.

The plaintiff subsequently filed an appeal against the rejection, arguing that he was not just an investor but the leader of the entire construction project. He had awarded numerous contracts to regional companies and signed contracts on behalf of L1 GmbH. In addition, the plaintiff presented evidence of jobs created and an updated business plan. Despite these arguments, his application was again rejected in May 2021 after a renewed review. It was determined that although L1 GmbH had a construction project, the need for the plaintiff’s permanent presence in Germany was still questionable. Furthermore, it was unclear whether the plaintiff genuinely intended to shift his economic focus to Germany, as he was also active in other countries.

Lawsuit by the Entrepreneur and Court Proceedings

In July 2021, the plaintiff filed a lawsuit with the administrative court to pursue his case further. He again argued that he had already invested substantial equity in his company and was planning further construction projects, including a multi-family house on a plot of land in Ku… Street in Essen. Without his constant presence, these projects could not be realized, as only he could make the necessary decisions. The managing director of his company, Mrs. Zo…, was unable to manage the projects alone. The plaintiff argued that his activities did not merely involve managing existing assets but also the construction and development of new real estate projects, which represented an economic interest for the region.

The court decided on the case in May 2022 without an oral hearing, and the plaintiff, along with managing director Zo…, was heard in a consultation session. It was determined that the plaintiff was engaged in profit-driven activities as managing director of L1 GmbH, which constituted self-employment. However, the plaintiff failed to demonstrate sufficiently that the planned projects were actually feasible or that his permanent presence in Germany was necessary. In particular, it was noted that no progress had been made in implementing the projects for years, and doubts remained regarding the securing of financing.

Court Decision: No Issuance of the Visa

The court dismissed the entrepreneur’s claim. It justified its decision by stating that the substantive requirements for issuing a visa for self-employment under § 21 of the Residence Act were not met. Although the plaintiff’s activities constituted self-employment under the law, the viability of his business ideas had not been proven. The plaintiff had made no progress in implementing his real estate projects for several years, and there were significant doubts as to whether the financing of the construction projects was secure.

The court found that the plaintiff had, in the past, been able to continue his activities under Schengen visas without needing a visa for long-term residence. Moreover, it had not been adequately demonstrated that the plaintiff’s permanent presence in Germany was essential for the realization of the planned projects. In the past, the plaintiff had managed his company from abroad.

The positive statements from the Niederrhein Chamber of Industry and Commerce did not lead to a different outcome either. The court was not bound by these statements and found that the IHK had only referred to older assessments without evaluating the current status of the planned projects. Ultimately, the plaintiff failed to convince the court that his activities in Germany justified an economic interest or regional need.

In summary, the court ruled that the plaintiff was not entitled to the requested visa, as the implementation of his planned projects was uncertain and there were no sufficient reasons that would require his permanent presence in Germany.

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