Different from other countries there is no investor visa category in Germany in a sense that the investor would get monies from the state. However, when an investor is willing to invest 500.000,- € and to employ more than 5 employees it might be easier to get a residence title for taking up gainful employment (= work permit). It has to be differentiated between the question of entry and residence (hereafter I.) and the question of whether a work permit will be granted (hereafter II.).

I.          Entry and Residence

The question of entry and residence is mostly a matter of or is mostly influenced by EU law. With regard to entry and residence it has to be differentiated between nationals of the European Union respectively the European Economic Area, nationals from all other privileged countries and so-called third-country nationals.

1.         EU nationals

As far as entry and residence are concerned there are no limitations: According to Art. 18 EC Treaty any EU national is entitled to enter any member state and to stay there at will. In particular they do not require visa. EU-nationals, i.e. the nationals of presently 25 member states (Belgium, Denmark, Germany, Finland, France, Greek, Great Britain, Ireland, Italy, Luxemburg, the Netherlands, Austria, Portugal, Sweden and Spain plus the following accession states: Estonia, Latvia, Lithuania, Malta, Poland, Slovenia, Czech Republic, Slovakia, Hungary and Republic of Cyprus) - as well as the members of their family - therefore do only have to keep their passports or any accepted alternative documents with them and to produce such document on request to the responsible public officials. Moreover, any EU citizen will be entitled to get a so called certificate of residency right which would be given to them officially by the responsible foreigner’s office. Further, they will have to keep their passports with them whilst crossing the border and to show it to public officials if they are asked to do so, cf. Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States (“Freedom of Movement Directive”) for further details.

Having said that, these rights were laid down in the directive; its content had to be transferred to national law. In Germany, to give an example, this has been done as follows:  Since January 1, 2005 the EU nationals of the member states specified above only have to fulfill the obligation to register with the responsible resident’s registry office (“Meldebehörde”) within the registration periods that are stipulated in the applicable statute of the respective German Federal State (approx. 7 to 14 days after taking residency). The resident’s registry office will submit any information and supporting documents to the responsible resident’s registry office. The latter may also request that the preconditions for the right to free movement of workers are proven as probable within an appropriate period of time. The information required to establish the probability can be submitted to the responsible registry office when registration is made and shall be presented there - if required – by showing the original document besides a certified translation.

2.         EEA/Swiss nationals

On a par with EU nationals are the nationals of the states of the European Economic Area (Iceland, Lichtenstein, Norway); they also enjoy the freedom of movement and are solely obligated to get registered.

Moreover, also Swiss nationals are entitled to move freely throughout the European Union and are also on a par with EU nationals.

3.         Nationals of central and eastern European member states

The same applies for nationals of central European and eastern European member states which have become part of the European Union with effect from May 1, 2004 (Estonia, Latvia, Lithuania, Malta, Poland, Slovenia, Czech Republic, Slovakia, Hungary and Republic of Cyprus) respectively with effect to January 1, 2007 (Bulgaria, Romania) - the so called “new” member states. As far as entry and residence are concerned there are no limitations: According to Art. 18 EU Treaty any EU national is entitled to enter any member state and to stay there at will. This also applies to nationals of the new member states. In particular they do not require visa, are entitled to get a so called certificate of residency right and have to keep their passports with them whilst crossing the border and to show it to public officials if asked to do so.

4.         Privileged nationals

Finally, although not that far going, there are also privileges for certain (mostly industrial) states; their citizens enjoy a privilege with regard to entry and residence. Due to a so called positive list nationals of certain countries (e.g. Argentina; Brazil; Canada; Israel; Japan; USA) are exempted from the general obligation to apply for a visa before crossing the external borders of the European Union if they are not going to stay for more than 90 days. As this privilege is laid down in a EU regulation (“Council Regulation (EC) No 539/2001 of 15 March 2001 listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement”), nationals from the listed countries benefit from it when going to any of the EU member states.

5.         Third country nationals

All other citizens, e.g. citizens that neither have EU or EEA nationality nor the nationality of a privileged country do require visa. They have to apply for such visa before entering any EU member country. According to EU laws and regulations these so-called third-country nationals do not benefit from any privilege with regard to entry and residence. However, this is subject to multilateral and bilateral agreements dealing with such privileges on a “lower” than European level between the countries.

II.         Taking up gainful employment as a self-employed person

There are several possibilities for investors to take-up gainful employment as a self-employed person.

1.         National law: Self-employment

For self-employment the preconditions specified above do not apply; however § 21 Residence Act includes certain restrictions for the grant of residence permits with a view to self-employment. In the sense of this Act, residence permits may only be granted if:

-           there is a higher economic interest or a certain local requirement;

-           the activity is expected to have positive effects on the economy and

-           the financing of the implementation is assured by equity or promised credit.

The preconditions mentioned under no 1 and 2 shall be regarded as compiled if at least an amount of 500.000,- € is invested and 5 jobs are created. Furthermore, the following criteria is given, inter alia, for the assessment of the preconditions: carrying capacity of the business idea; entrepreneurial experiences of the foreigner; amount of the capital investment. In order to be in the position to assess the foreign office regularly asks for an experts’ statement with a competent authority, e.g. with the local Chamber of Industry and Commerce. In case the investment amount considerably differs from the adopted regulation and/or if no or only few jobs are created a certain regional requirement may only be on hand if without the admission of the foreigner - with respect to the foreigner’s intended field of activities – an existing or foreseeable shortage in the respective region cannot be rectified. Notwithstanding the abovementioned preconditions, foreigners who are older than 45 years shall only be granted residence permit if a sufficient pension provision is available. Finally there is a separate treatment for freelancers.

The residence permit is granted for no longer than three years. Upon the expiry of the three years period a permanent residence permit can be granted if the foreigner has been able to successfully implement the intended activity and if the means of subsistence are assured by sufficient income for the foreigner and his/her relatives who are living in familiar community with him/her.

2.         EU law: Van der Elst - Visa

Furthermore, there might be a possibility for third country nationals to come to Germany without having to apply for a residence title for the purpose of gainful employment but only if certain conditions as provided in § 15 Employment Regulation (“Beschäftigungsverordnung”) are met. This is due to the so-called “Van der Elst - Visa” which is based on the case law of the European Court of Justice rendered with regard to Art. 49 EU Treaty.

Ҥ 15 Service delivery

For the grant of a residence title to persons who are orderly employed in the residence country of a company that is based in a member state of the European Union or in a contracting state of the treaty on the European Economic Area and shall be relocated to the Federal Republic in order to perform services no approval is required.”

The regulation implements the case-law of the European Court of Justice which stipulates that a temporary relocation for the purpose of cross-border services is generally protected for employees who are third-country nationals as a result of the freedom of services pursuant to Article 49 et. seq. EC Treaty (starting with the legal matter C-43, 93 – “Vander Elst”  of the European Court of Justice). The amendment - which became effective on July 11, 2007 - was required as a consequence of the judgement given by the European Court of Justice in the legal matter C-244/04. For a visa application the agencies abroad are checking whether the preconditions stipulated in the case-law guidelines of the European Court of Justice are fulfilled in the individual case. Different from the previous regulation there is no need to have had a previous employment for a certain time in the country where the employee has been employed before the assignment (such regulation being regarded as non-compliant with the EU laws and regulations by the European Court of Justice back in January 2006). However, the visa scheme is only applicable if there is an employment between the third country national and the service provider having its seat in another EU country and if the assignment is going to last for a certain period of time. In case of any uncertainties whether or not this scheme does work it is recommended to involve the competent authorities upfront in order to get a clearance certificate.

Please note that this visa category should exist in more or less the same manner in every member country of the EU which means that this is an EU wide option; however, this should be checked with a local counsel.

3.         Bilateral agreements

Finally, a residence permit for the purpose of self-employment may also be granted by the foreign office according to § 21 par. 2 Residence Act if there are privileges due to bilateral conventions, like for Japan and the USA.

III.        Outlook

Currently, there is indeed no classical investor visa category in Germany. However, if certain conditions are met the investor will be in a position to get a work permit without having to pass a job market test and other conditions. Compared to other countries this investor visa category is not very competitive. Hence, in practice, many investors complain about this. However, it remains to be seen if the law will change in the future.

Disclaimer:

We always try our best to provide accurate and updated information herein. Nevertheless, lacks of clarity or little mistakes can not be excluded entirely. Therefore, we do not guarantee for the up-to-dateness, accuracy and/or completeness of the information provided which cannot replace a legal consultation which is required for the particular case.