Germany at a Glance
Doing Business in GermanyFotolia
Germany has a comprehensive social security system.
Before you can start doing business in Germany, whether you are an employee or entrepreneur, you need to sort out your paperwork, licenses, qualifications, and possibly a number of other rules and regulations. This article has all the information you need to get a basic idea of what is required. For more details, plus additional information on German business culture and the job search, please see our section on Jobs and Business in Germany.
Work Permits and Employment Visa
In addition to a residence permit, a work permit is required. The application for said work permit will be completed at the Ausländerbehörde, the German Foreigners’ Office. If you have an employment visa, getting a work permit is usually just an inconvenient formality. However, it is important to note that an employment visa (and, indeed, any kind of visa for a stay longer than three months) needs to be applied for before entering the country. In most cases, you also need a confirmed job offer to get the visa. If you are not sent to Germany on an intra-company transfer, you might want to look into job websites such as Stellenangebote.net (German only).
Here things may get a little more complicated. If you do not yet have a job, you will need to convince government officials that you have employment qualifications much desired in Germany. Due to the fact that Germany has a relatively high unemployment rate, depending on the city (former East Germany’s rate is much higher than, say, that in Bavaria), the preference is given to German applicants or EU nationals for most jobs. More information on visa requirements (including employment visa) can be found in our article on moving to Germany.
Setting up a Business
Due to the possible employment restrictions mentioned above, setting up your own business in Germany is a valid option. This is by no means a simple task, though. If you are planning to establish your own company, you must prove to the German Foreigners’ Office that you will be arriving with an initial capital of at least 250,000 Euros. In addition, you have to show that you are planning on making at least five jobs available to Germans.
Basically, your business should have a positive effect on the German economy. Also make sure that your qualifications from university or previous employers are accredited in Germany.
If a quarter million is too much for you to spare, you can still be self-employed, without opening a business. You would then be characterized as a Freiberufler, of which there are three categories. Each has different rules:
- Free professionals (e.g. doctors or lawyers) need to officially become a member of a professional association (e.g. the Medical Association of Germany). This allows them to practice their profession after accrediting their qualifications. For a few professions, there are no such associations and they need to register with a local authority. For instance, alternative practitioners of homeopathic medicine (Heilpraktiker) need to register with the public health office before they can start accepting patients. Some others (e.g. business consultants) do not need any registration at all.
- Those practicing a trade (e.g. a butcher or artisan) need the approval of the respective trade association (Handwerkskammer). They also need a license from the local trade office (Gewerbeamt).
- Visas and work permits for freelancers (e.g. artists or writers), which fall under a completely different category, are usually the easiest to receive.
If you are self-employed, you will need to pay higher taxes and higher health insurance premiums. At any rate, it is highly recommended to use the services of an attorney, as the entire process may seem overwhelming, confusing and could be quite hairy. A good site for checking whether you qualify for self-employment and how to go about setting up your own business is the Federal Ministry of Economics and Technology.