Although Germany is considered one of the most welcoming countries in Europe and is the most populous country, it does not have a special program for passive investment and residence permits, like some other countries. Unlike countries that have programs such as the “Golden Visa”, in Germany, you cannot obtain residency by simply purchasing property, stocks, or investing in government funds. However, in recent years, Germany has enacted more flexible laws for immigrants, and according to these laws, foreigners may invest in this country with special methods for the purpose of obtaining a residence permit.
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Overview of Investment in Germany
Although Germany is considered one of the most welcoming countries in Europe and is the most populous country, it does not have a special program for passive investment and residence permits, like some other countries. Unlike countries that have programs such as the “Golden Visa”, in Germany, you cannot obtain residency by simply purchasing property, stocks, or investing in government funds. However, in recent years, Germany has enacted more flexible laws for immigrants, and according to these laws, foreigners may invest in this country with special methods for the purpose of obtaining a residence permit.
To keep its economy dynamic, the German government does not receive direct cash assistance from immigrants, but instead has opened the path of active investment for them. In active investment, applicants must directly synchronize their capital with economic activity in order to inject not only money, but also their work and expertise into the German economy and thus create jobs. For residency in Germany through investment, money is not the only capital, and more of the applicants’ ability to prove the efficiency of the business they create is taken into account. To the extent that even the certain minimum investment has not been approved as a law, but the positive and fruitfulness of the business must be proven to German authorities.
To keep its economy dynamic, the German government does not receive direct cash assistance from immigrants, but instead has opened the path of active investment for them. In active investment, applicants must directly synchronize their capital with economic activity in order to inject not only money, but also their work and expertise into the German economy and thus create jobs. For residency in Germany through investment, money is not the only capital, and more of the applicants’ ability to prove the efficiency of the business they create is taken into account. To the extent that even the certain minimum investment has not been approved as a law, but the positive and fruitfulness of the business must be proven to German authorities.
Investment in Germany and the Laws
Residence permits in Germany fall into 3 categories:
| Permits | Types |
| Visa | Schengen Visa (like tourism, business, etc.), National Visa (like for marriage purpose) |
| Temporary Residence Permit | Specific Purpose (like work, study, reunion, etc.) |
| Permanent Residence Permit | Issued after 5 years of legal residency |
There is no specific law for direct investing in Germany to grant residence permit. Applying for residence permit through investment can include all 3 types of residence permits mentioned above through stages. As we mentioned, the only criterion is not the direct deposit of capital into the bank account of the government or a national investor, so applicants must consider different laws and residence permits depending on their investment and work.
s 21 German Residence Act
There are clauses in the German Residence Act that according to them, applicants will be granted a residence permit if they work in a licensed business in Germany. If we look at clauses s 18a, 18b, 18g, we see that this is directly related to work residence and has no specific link to investment. However, if applicants want to invest in an already established business in Germany and work at the same time, they can enter Germany with a job offer and, having a work permit and a bank account, invest their capital in the existing business in the future. From 2020, the “German preferred applicant” condition has been removed and if non-EU citizens holding a university or vocational degree, they can apply for a residence permit for work without having to prove that there is no qualified German applicant.
َ7 (1) German Residence Act
According to the above laws, we understand that there is no specific provision for temporary residence permits through direct investment. Lawyers do not interpret this silence of the law as a deadlock and turn to other articles. 7 (1) German Residence Act is highly effective in this section and officials, applicants and lawyers always refer to it:
“In reasonable cases, a residence permit could also be issued for a purpose of residence which is not covered by this Act.”
According to the above paragraph, the decision-making authorities have a very high authority to evaluate and grant or refuse a residence application and, so to speak, the fate of applications is examined subjectively instead of objectively.
Investment Requirements through Starting Business
If a business is established in Germany, it meets a number of conditions according to which applicants can obtain a residence permit by starting a business. These requirements are:
Economic profitability: The business must be of clear economic interest and benefit to the economy of a region or the German economy in general.
Minimum capital: There is no minimum capital specified by law for investment, but the higher the investment and the more jobs it creates, the higher the chances. Some say that the chances of a residence permit are higher for investments above 250,000 euros.
Age requirement: People over 45 years of age need to prove that they have a stable income or a pension or retirement salary. This assures the German authorities that if the business faces financial problems due to old age and difficulty in finding employment, the person can cover their living expenses.
Business plan: Applicants must have examined all economic aspects of their idea with concrete data in a professional business plan and prove in the business plan that the proposed business can be beneficial to the German economy and at the same time create other jobs. The amount of capital and the number of jobs created must be clearly written in the business plan.
Investment in Germany and Application Process
Obtaining a residence permit in Germany through investment (starting a business) is a two-step process. First, the investor must prove the necessary conditions for his proposed business and temporarily enter Germany to register it, and then apply for a residence permit. In the first step, a business plan with details and an assessment of income and expenses for the next 3 years must be prepared and submitted to the German authorities.
In addition, documents proving the existence of capital must be submitted. The most important of these are cash in a bank account in the applicant’s name and other non-cash or near-cash assets such as gold, shares, real estate, etc. In the second step, applicants apply for a National D-Visa (Entry Visa), with which they can enter Germany for between 2 and 6 months. This visa is applied for at the German embassy in the country of origin. After entering Germany, applicants must register their address in Germany (Anmeldung) within two weeks and then start the business registration. For example, if the company is registered as a GmbH, the company registration documents are submitted to the commercial office (Gewerbeamt).
After starting the business, applicants can convert their visa into a temporary residence permit. To do this, they book an appointment at the immigration office (Ausländerbehörde) and go with the registration documents and business license. The temporary residence permit may be issued for up to 3 years and can be extended provided that the business is running, making a profit and paying taxes. After 5 years of temporary residence, it is possible to apply for a permanent residence permit.
Investment in Germany and Required Documents
Based on the above, we will mention the most important documents required below. It must be noted that due to the subjective nature of the process, other documents may be required and each officer may request them based on the circumstances of each case:
| Documents | Requirements |
| Passport | Must be valid for at leas 1 year |
| VIDEX Form | Filled application form |
| Proof of Capital | Bank Statements, title deeds, shares, etc. |
| Photos | Biometric photos for not more than 6 months |
| Business Plan | Comprehensive for 3 years planning |
| Commercial Register | Obtained from Gewerbeanmeldung |
| Health Insurance | Must be from a German insurance company |
| Address Proof | Must be a registered address in Germany (Meldebescheinigung( |
| Pension Proof | For over 45 years old |
The advantages and challenges of Investment in Germany
Starting a business and economic activity in Germany for the purpose of obtaining a residence permit has both benefits and challenges that every applicant should consider before making a decision. Below are some of the most important challenges and advantages:
Advantages:
- Economic activity in the largest economy in Europe
- Working in the most populous and dynamic country in Europe
- Efficient judicial and administrative system
- Advanced health and treatment system
- Advanced and modern infrastructure
- Cradle of technology in Europe and the world
Challenges:
- Involvement of personal opinion of case officers
- Difficulty in proving profitability and job creation for 3 consecutive years
- Working in a German-speaking environment
- Bureaucracy of company registration and bureaucracy of obtaining a commercial and trade license
- Requirement to inject labor and capital simultaneously
- Inability to make passive investments for the elderly
- Cultural and linguistic differences
Conclusion
In this article, investing in Germany for the purpose of obtaining a residence permit was examined in detail. Germany does not have a special investment program for granting residence, but it is possible to obtain a residence permit in this country by starting a business. The business idea must be explained in a detailed business plan in terms of profitability and job creation for 3 years, and the availability of capital in the hands of the applicants must be proven. After receiving a national visa, applicants can register their business in Germany in person and then apply to convert the visa to temporary residence. The temporary permit is issued for up to 3 years. If the business remains established for 5 years and the temporary residence permit is extended, after this time, applicants will be eligible for permanent residence. MIE consultants have extensive experience in company registration in Europe and consulting with them will be very beneficial for non-EU applicants.
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