Starting Phase: Setting Up Business

Setting up a business requires several steps. Most of them have to be accomplished in Germany. Thus investors usually need to get a certain visa prior entering Germany.

Schengen Visa (Business Visa)
For most activities in the formation phase of your business, a Schengen Travel Visa (in this context often termed "Business Visa") is sufficient. It enables its holder to stay in Germany for up to 3 months per half year. During this time, certain business activities can be performed, including:

• Conclusion and notarization (where necessary) of the company agreement
• Commercial register application (through a German notary)
• Trade office notification
• Other preparatory activities for setting up a business

Step Two: Entry in the Commercial Register
Step Three: Trade Register Notification

Applicants for a Schengen Business Visa will usually have to present certain documentation, such as:

• Letter of invitation by the German business partner
• Documentation of employment and salary certificate
• A letter from the applicant’s employer confirming the business purpose of the trip
• Proof of a travel health insurance

If the entrepreneur applies for a Schengen Business Visa him- or herself, documents such as a copy of the foreign company’s entry in the foreign commercial register, articles of association, and bank statements from the last three months may be required.

Visa Exemption for Certain Nationals
Nationals from certain countries do not require a visa if they do not stay in Germany longer than three months, do not take up work, and have a valid passport. They can also perform all business activities necessary to set up a business.

For more information on who needs a visa, please refer to our chapter on:
Awarding a Visa

National Visa for More than 3 Months
If business proceedings for setting up a company exceed a period of three months per half year, a national long-term visa is required. This visa allows a person to perform all steps necessary to establish a business in Germany.

However, the expected time effort and documentation requirements for such a visa are more extensive than for a Schengen Travel Visa.

Running the Business on Site

The Residence Permit
A residence permit is required by all foreign nationals from outside the EU, the European Economic Area (EEA) or Switzerland who intend to stay in Germany for more than three months.

The residence permit is

• limited in time and
• issued for a specific purpose, such as taking up work.

Anyone intending to work in Germany has to apply for a residence permit for the purpose of economic activity. There are two different kinds of permits:

1. Residence permit for the purpose of self-employment
2. Residence permit for the purpose of taking up employment

The residence permit for the purpose of economic activity also includes the work permit: Work permit and residence permit are issued in a single document by the responsible visa authority.

Residence Permits for the Purpose of Self-Employment
A residence permit for the purpose of self-employment will usually be granted if

• at least EUR 500,000 are invested
• at least 5 new jobs are created

Where these standard requirements are not met, a residence permit for the purpose of self-employment may nevertheless be granted if

• the underlying business idea is found viable
• the foreign entrepreneur demonstrates sufficient business experience
• the level of capital investment is high enough
• employment and training will have a positive effect on a region’s economic structure
• the investment contributes towards innovation and research & development (R&D)

The responsible visa authority will assess the business idea in close cooperation with competent local bodies and chambers in the area of the planned business, responsible trade and industry authorities, public-sector professional groups, and authorities responsible for regulating the admission to the profession concerned.

Self-employed foreigners aged over 45 are required to prove adequate provision for old age.

A permanent settlement permit may be issued when the residence permit expires after three years if the foreigner has successfully realized the planned activity and his or her livelihood is secured.

The Settlement Permit
A (permanent) settlement permit is issued if a foreigner has been in possession of a residence permit for five years. Further prerequisites include

• knowledge of the German language
• the ability to earn one’s own living
• a lack of previous convictions.

Self-employed foreigners may be granted a settlement permit after only three years if the foreigner has successfully realized the business idea and his or her livelihood is secured.