Starting a Business in Germany: Residence Permit for Non-EU Citizens

If you plan to start a business in Germany to obtain a residence permit, we are your reliable partner. With our comprehensive expertise in immigration and business law, as well as years of experience in the application process, we support you every step of the way. We assist you in applying for your visa and handle all inquiries with the relevant authorities, allowing you to focus on what matters most – your business.

Comprehensive Support with the Application Process

We handle communication with the German embassies and consulates as well as the relevant immigration offices on your behalf. Additionally, we coordinate the necessary steps with other relevant institutions such as the Chamber of Commerce (IHK), the trade office, or the appropriate registry courts involved in setting up your business.

Collaboration with Experts

When establishing your business, we work with experienced tax advisors, notaries, and business experts to create a viable business plan. This professional support ensures a successful start for your business in Germany.

Requirements for Non-EU Citizens

While EU citizens enjoy the right to freedom of establishment in Germany, starting a business for non-EU citizens comes with specific requirements. To establish a business, you will need either:

• a temporary residence permit, or
• a permanent settlement permit.

Who Can Apply for a Residence Permit?

Non-EU citizens can apply for a residence permit for self-employment if they are:

• business founders,
• sole proprietors, or
• managing directors or legal representatives of partnerships or corporations with entrepreneurial responsibilities.

Requirements for a Residence Permit for Business Establishment

A residence permit under § 21 of the Residence Act is granted if the following conditions are met:

• There is an economic interest or a regional need.
• The planned activity has a positive impact on the economy.
• The financing is secured by equity or a loan commitment.

In some cases, a residence permit may also be granted if significant investments are made (e.g., starting at €250,000) and jobs are created. The Chamber of Commerce (IHK) may provide an opinion on this, but the final decision rests with the relevant authority.

Temporary and Permanent Residence Permit

The residence permit for business establishment is initially granted for three years. Upon successful business operation, it can then be converted into a permanent settlement permit. Depending on the business performance, an unlimited residence permit may be issued after 2, 3, or 5 years.

Review of Requirements and Necessary Documents

The review of the requirements for a residence permit is conducted by the responsible German embassy or consulate in the applicant’s home country. The local immigration authority is involved in this process, which in turn consults expert institutions such as the Chamber of Industry and Commerce (IHK), the Chamber of Crafts, as well as other relevant authorities.

Documents to be Submitted

The following documents must be submitted to the embassy or consulate:

1.Business Plan:

• Capital and financing plan
• Revenue forecast for the next three years
• Liquidity plan
• Proof of capital or credit commitments

2.Curriculum Vitae

3.Proof of Qualifications:

• For example, university degrees or professional experience

4.Proof of Cooperation:

• Letters of intent or expressions of interest from potential business partners or customers

5.Managing Director’s Contract (if it is a corporation)

Additional Documents (if available):

• Lease agreement for commercial properties

For GmbH, UG, or AG:

• Certificate of incorporation
• Articles of association
• Commercial register excerpt or notarized registration for the commercial register
• Business registration

Additional Documents for Existing Companies:

• Balance sheets for the last two years
• Operational analysis (BWA) for the last six months
• Profit and loss statement if no balance sheet was prepared
• Tax assessments for the last three years (if available)

The Business Plan

The business plan is a key document for foreign entrepreneurs applying for a residence permit in Germany. It provides a comprehensive description of the business and covers essential areas such as finances, marketing, products, target customers, and potential risks.

Why the Business Plan is Important

A well-structured business plan is crucial to demonstrate to German authorities that the applicant has a clear, realistic, and sustainable business concept. It shows that the entrepreneur has the necessary skills to successfully manage the business while considering the German market.

Moreover, the business plan helps the entrepreneur prepare for the business start-up and daily operations in Germany. A professional business plan can also convince investors and potential business partners to invest in the company or enter into collaborations. This underscores that the business has realistic growth potential and has been thoroughly researched.

Contents of the Business Plan

The business plan should cover the following aspects:

• Entrepreneurial experience and professional qualifications of the applicant,
• Economic interest or regional demand,
• Positive impact on the (regional) economy,
• Contribution to innovation and research,
• Impact on the employment and training situation,
• Amount of capital investment,
• Securing the financing of the company.

Detailed Contents

The Business Idea

• What is the name of your company?
• What products or services do you offer?
• What sets your business apart from others?
• Where will your company be based? In which city or region in Germany?
• Will it mainly operate online or will there be a physical store?
• What legal form will the company take?
• What is the initial capital?

Product/Service

• How is your product or service defined?
• How does it differ from existing market offerings?
• What marketing strategies will you pursue?
• Do you have the necessary licenses and permits?
• Are there copyrights, patents, or trademarks?
• Is the product market-ready or still in development?
• Has the product been tested before entering the German market?

Competition

• Who are your competitors?
• What are your company’s strengths and weaknesses?
• How can you successfully address weaknesses?
• What market gap are you filling?

Customers and Market

• Who is your target audience? Have you conducted a demographic analysis?
• Is there a market for your product or service in your region?
• Is the market dominated by a few large companies?
• What advertising measures do you plan to reach your target audience?

Finances

• What are your short- and medium-term sales forecasts?
• What are the revenue projections for the first year?
• Does your company have sufficient financial resources to avoid liquidity problems?
• What is the total capital requirement?
• How will your company be financed?

Establishing the Business

Starting a business in Germany is a complex process, and creating a business plan is just the beginning. It is necessary to register the company with the relevant authorities, such as the tax office and the trade office, and the Chamber of Industry and Commerce (IHK), and depending on the legal form, a registration in the commercial register may be required.

Choosing the legal form of your company is a crucial foundation for the success of the business. However, it is important to always keep in mind that the optimal legal form at the time may become disadvantageous due to later developments, such as expansion or higher liability risks. Therefore, you should regularly review whether the chosen legal form is still appropriate or whether an adjustment would be necessary.

Contact Us

If you need advice and representation, feel free to contact us at 0221 – 80187670 or send an email to info@mth-partner.de.