Residence in Germany for entrepreneurs and investors

The self-employment permit under Section 21(1) of the Residence Act (AufenthG) is granted where there is an economic interest or regional need for the business, the activity is expected to have a positive effect on the economy, and its financing is secured through equity or a loan commitment. The immigration authority, which consults local chambers and economic bodies, weighs the viability of the business idea, the applicant's entrepreneurial experience, the capital invested, the effect on employment and training, and the contribution to innovation and research. Germany abolished fixed capital and job thresholds years ago, so there is no published minimum: a well-capitalised, credible plan matters more than a headline figure. Applicants over 45 should normally show adequate provision for old age. Separate, relaxed rules apply to freelance professionals under Section 21(5).

Germany expects the holder to live in the country and run the business there. A residence title generally lapses if its holder leaves for more than six months without approval, and the authorities will look at whether the business is actually operating before extending it. Tax follows residence: a person with a home (Wohnsitz) or habitual abode — normally more than six months' stay — in Germany has unlimited tax liability on worldwide income at progressive rates, with a flat withholding tax on most capital income. Germany has no non-domiciled, remittance-basis or lump-sum regime, and gift and inheritance tax applies to worldwide assets where the donor or heir is resident. Departing residents with substantial shareholdings can face exit taxation, so the structure of an operating company should be designed with both entry and any future exit in mind.

The spouse or registered partner and minor unmarried children can join the entrepreneur through family reunification, provided that living space and the family's livelihood are secured. Spouses are generally expected to show basic German, although several exemptions apply. Parents and adult children have only limited and exceptional routes, and each case needs separate assessment.

If the business has been successfully established after three years, is expected to continue developing and secures the livelihood of the holder and dependants, a settlement permit (Niederlassungserlaubnis) can be granted under Section 21(4) — earlier than the general five-year track. Naturalisation has required five years of lawful residence since the June 2024 reform; the three-year fast track for exceptional integration was repealed with effect from 29 October 2025. Applicants need B1 German, must pass the naturalisation test, support themselves without social benefits and commit to the free democratic basic order. Germany now accepts multiple citizenship, so investors can keep their existing nationality.