Corporate immigration in Germany – Lexology

General framework

Legislation

What primary and secondary legislation governs immigration in your jurisdiction?

The legal framework for foreigners can be found mainly in the Residence Act, the Freedom of Movement Act, the Ordinance on Residence and the Employment Regulation. These laws and provisions are interpreted through the Implementing Regulation on the Employment of Foreigners and the Implementing Regulation on the Employment Regulation, which are both published by the Federal Employment Office.

The German regulations are affected by European laws and EU directives, which are implemented in German national law (eg, the EU directive on the EU Blue Card has been implemented into German national law).

International agreements

Has your jurisdiction concluded any international agreements affecting immigration (eg, free trade agreements or free movement accords)?

The freedom of movement agreement within the EU applies in Germany.

There are many international agreements in effect that may have an impact on immigration. The agreement that is most used in practice is the General Agreement on Trade in Services, which forms a legal basis for obtaining permission to work on secondment in Germany.

Regulatory authorities

Which government authorities regulate immigration and what is the extent of their enforcement powers? Can the decisions of these authorities be appealed?

Decisions on individual immigration matters are made by local immigration authorities, employment authorities, German embassies and consulates and the Ministry of Foreign Affairs.

Most decisions of these authorities can be appealed in a formal process. However, the usual practice would be to have informal correspondence with the respective authority to discuss reasons for rejection, submit further supporting documents to argue the case and ideally reach a positive outcome.

Government policy

In broad terms what is your government’s policy towards business immigration?

Since 2005, the German government has taken the approach to seek the immigration of highly skilled and talented people. Since summer 2011, the immigration requirements for highly qualified occupations, such as engineers, medical doctors and IT specialists have been lowered. The German government has announced that it will regularly check which industries and practice areas have a lack of skilled workers and will lower immigration requirements accordingly. The EU Directive for the Blue Card, which enables highly skilled third-country nationals to work in EU countries, was implemented into German immigration law in August 2012. The Blue Card facilitates the access of highly skilled employees to the labour markets of the EU member states.

On the other hand, Germany protects its local labour market by setting barriers for the immigration of (unskilled) workers without academic qualifications and sets minimum wage requirements for work authorisations.

Further, new immigration regulations entered into force in Germany in July 2013 in order to sustainably eliminate the lack of qualified personnel. Among other amendments, foreigners with special professional education who do not have a university degree can also receive a German work permit if certain requirements are fulfilled. In the same year, the immigration process in Germany was changed significantly and the role of German embassies and German consulates abroad became more important. German local immigration authorities are no longer involved in the approval process for working visas unless the applicant has previously been to Germany for working purposes, applies for a self-employment visa, or in the case of some family reunion visas.

In the second half of 2017, the intra-corporate transfer (ICT) card for secondments was introduced. This new legal basis adds some flexibility for short- and long-term working stays in additional EU member states.

Short-term transfers

Visas

In what circumstances is a visa necessary for short-term travellers? How are short-term visas obtained?

In principle, non-EU nationals need a visa to enter Germany for short-term travel. Visas are required for business trips, transit or to enter Germany for working activities, internships and training.

The visa can be applied for at the German embassy or consulate in the country of the applicant’s citizenship or in any other country where the applicant has the legal right to reside (a business visa is not sufficient). Since 2010, the visa application procedure has been standardised for all Schengen countries.

The Schengen visa for business and tourism purposes is issued as a Type C visa for both single and multiple entries. The length can be from 90 days up to several months, but always restricted to a maximum of 90-day stays within 180 calendar days. The processing time for visa applications can take from two to 10 days and sometimes up to three months, depending on the type of visa. Owing to the high workload at the German embassies and consulates in certain countries, it can take several weeks to get an appointment for a visa application.

Some nationals are exempt from the visa requirement for short-term business travel to Germany (up to 90 days within 180 calendar days). The list of exempt nationals is reviewed on an annual basis and can be checked on the website of the German Ministry of Foreign Affairs.

Restrictions

What are the main restrictions on a business visitor?

A business visitor is restricted to a stay of a maximum of 90 days within 180 calendar days in Schengen countries. When counting the 90 days, all days spent in Schengen states, including weekends, are taken into consideration. Half days or even a few hours in transit count as one day.

The main restriction on a business visitor is the limited scope of activities one can perform during a business trip. On a business visit, one may attend trade fairs, visit a customer to market a product, to negotiate a contract, conduct meetings, etc. German immigration law does not offer a detailed definition of permitted activities during a business trip and, therefore, it is sometimes difficult to assess whether certain activities are allowed on a business visitor status.

Gainful employment, execution of a project and certain forms of training are not allowed on a business visitor status. The nature of the activity is decisive in determining the correct visa category. Business trips are often mistakenly used for employment activities that legally require work authorisation. This is considered illegal employment in Germany and can have serious legal consequences for both employer and employee. For the employer, this can be exclusion from public procurement procedures, exclusion from obtaining subsidies, limitations on employing foreigners for a certain period of time and, for the employee, the consequences can be deportation, fines and restrictions on re-entering Germany or the Schengen states.

Short-term training

Is work authorisation or immigration permission needed to give or receive short-term training?

In principle, immigration permission is required for training. Training regulations apply for employees of international companies coming to Germany to be trained, as well as for employees coming to Germany as trainers. Training details and, in particular, a training plan (among other documents), must be submitted along with the visa application for the stay in Germany.

Individuals who travel to Germany to give or receive training are exempt from obtaining work permission if they are employees of an international company and the training is at an entity of the same company and their stay does not exceed 90 days within a 12-month period.

Some nationals (from Australia, Canada, Israel, Japan, Korea, New Zealand and the US) are also exempted from the visa requirement and may take part in training for this short time frame without a visa.

All requirements for training must be accounted for in the event of an investigation by the immigration authorities. Therefore, it is recommended to discuss the training requirements up front with the competent immigration authority or German consulate.

Transit

Are transit visas required to travel through your country? How are these obtained? Are they only required for certain nationals?

All nationals who need a visa to visit Germany as a tourist or business visitor also need a visa to transit Germany, although exceptions do apply; for example, exceptions are made for foreign nationals in possession of one of the following: a valid Schengen visa, a valid residence permit from a member state of the Schengen area or a valid visa for Bulgaria, Canada, Croatia, Cyprus, Ireland, Japan, Romania, the United Kingdom or the United States. See the Federal Foreign Office’s website for more information. A transit visa can be obtained at the German embassy or consulate in the country where the applicant legally resides. Details regarding how to apply for the visa can be found on the website of the German consulate for the respective country.

Visa waivers and fast-track entry

Are any visa waiver or fast-track entry programmes available?

Germany does not offer a fast-track programme or expedited processing.

For some nationalities, there are entry visa waivers for business or tourist stays in the Schengen area. For a small minority of nationalities (Australia, Canada, Israel, Japan, Korea, New Zealand and the United States), there is an entry visa waiver in place for all types of stay in Germany. However, a work and residence permit is still required for a long-term stay.

Long-term transfers

Categories

What are the main work and business permit categories used by companies to transfer skilled staff?

The main immigration categories are:

• international staff exchange programme within a group of companies;
• ICT;
• mobile ICT card for intra-corporate transfers to Germany of third-country nationals already residing in one EU member state;
• assignments of managerial staff or of employees with special internal knowledge;
• employees that sign a German contract and are paid under German payroll;
• executives;
• EU Blue Card for highly qualified employees;
• internal training; and
• implementation of purchased software or machines.

Procedures

What are the procedures for obtaining these permissions? At what stage can work begin?

The process usually begins by filing a work permit pre-approval at the local employment office in Germany. Once this approval has been issued, the foreign employee must take this original document and other supporting documents and apply for a long-term national visa at the German embassy or consulate in order to enter Germany for work purposes. The visa is issued as a Type D visa with multiple entries and usually for a validity period of 90 days (for stays not exceeding 12 months, there is the option of obtaining the visa for the full duration).

In the case of a Blue Card application, the applicant skips the first step of obtaining work permit pre-approval and proceeds straight to the German embassy or consulate that can approve the visa independently from the local German authorities. Before applying for this visa type, in some cases, if the university degree of the applicant is not listed in Anabin, the degree recognition database, a special recognition process may need to be performed at the Central Education Authority to confirm if the foreign university degree of the applicant is equivalent to a university degree granted in Germany.

Once the foreign employee has entered Germany with the required visa, he or she can immediately start working in Germany, but must complete the post-arrival process within the validity period of the visa. The foreign national must register at the town hall in the city where he or she resides within two weeks of moving into a long-term residence. After registration, the employee must visit the immigration authority to apply for and collect the final residence permit. Since September 2011, this permit is usually issued as an electronic permit, which is a document in a credit card format; however, in some cases, it is stamped directly in the passport.

Exemption processes

Some nationals (from Australia, Canada, Israel, Japan, Korea, New Zealand and the US) are considered favoured nationals and a shorter process applies. They do not need to apply for an entry visa before entering Germany for work purposes. These nationals can travel to Germany on a visa waiver status and apply for work authorisation and a residence permit upon arrival. It is recommended for these individuals that a work permit pre-approval be obtained before arrival in Germany. Nevertheless, once they enter Germany they cannot start working immediately as they first need to register their address at the local town hall and apply for the final residence permit. Only after the local immigration office has issued at least a preliminary confirmation is the applicant allowed to start working. Due to delays at many immigration offices, it is often recommendable for these nationals to apply for an entry visa nevertheless, as this often allows them to start working upon arrival, which is much faster than the non-visa process.

Nationals of EU member states that are subject to the EU freedom of movement regulation do not need a work permit for Germany.

Swiss nationals need a residence card to reside in Germany if their intended duration of stay exceeds 90 days. This can be obtained at the immigration authority in the city where the foreigner resides.

Any individual, regardless of his or her nationality, is subject to the German residence registration regulation.

Period of stay

What are the general maximum (and minimum) periods of stay granted under the main categories for company transfers?

Residence permits with work authorisation are usually issued initially for one to two years and can then be extended.

Applicants for a Blue Card who have an unlimited contract can receive the initial permit issued for up to four years.

International staff exchange permits and ICT cards can only be granted for a maximum of three years. Should a foreign employee on an international staff exchange wish to stay longer in Germany, a local German employment contract will be needed and the permit category must be changed.

Processing time

How long does it typically take to process the main categories?

The normal process to allow the foreigner to begin working in Germany (work permit and visa application) takes, on average, four to 10 weeks. German immigration law does not provide a maximum timeline and it is not possible to obtain a fast-track procedure by paying an extra governmental fee. The timeline in each individual case depends on the category of the permit, nationality of the employee, workload of the officers involved and time slots available at the German consulates or embassies abroad.

Normally, German immigration specialists supporting the visa application can speed up the process by following each step in the process and clarifying issues with the competent authorities in advance.

The application for permanent residence permit takes longer since authorities must perform a background check (eg, whether the foreign national is listed as a criminal or investigations are ongoing based on criminal activities).

For favoured nationals, namely, nationals who do not need a visa to enter Germany for working purposes, the timeline is usually shorter. Normally, it takes three to six weeks. However, waiting times for appointments at the immigration office must also be taken into account.

The immigration process for the EU Blue Card is usually quicker than a regular work permit process as one can skip the work permit pre-approval step.

Staff benefits

Is it necessary to obtain any benefits or facilities for staff to secure a work permit?

Foreign employees entering Germany for working purposes need a private residential address in Germany in order to register themselves there. This can be an apartment, house, furnished business apartment or, in some rare cases, a hotel. A company address is not sufficient. Since November 2015, an additional landlord confirmation issued by the landlord must be submitted for this registration. Not all temporary accommodation premises are willing to sign this document, which can cause a delay in the post-arrival immigration process.

Further, sufficient medical insurance is required. This can be German statutory health insurance or, if the requirements are met from a social security point of view, any other German or international private health insurance with a business licence for Germany can be used. However, the international health insurance needs to have the same coverage as German statutory health insurance and very often, German immigration authorities request the insurance companies to issue a confirmation that German statutory minimum requirements are fulfilled.

A further requirement is that the foreign employee’s remuneration is equivalent to that of a comparable German employee in the same or in a similar job position. The amount of a comparable German employee’s salary must be noted on most application forms.

Assessment criteria

Do the immigration authorities follow objective criteria, or do they exercise discretion according to subjective criteria?

German immigration authorities follow the requirements stipulated in the immigration law and the in-house government rules, which aim to provide officers with details on how to apply the various immigration categories. Some terms in German immigration law have not been defined very precisely, which gives certain room for interpretation. Immigration authorities exercise their decisions not only by objective criteria but also by exercising their own discretion. In particular, atypical cases allow flexibility and discretion in favour of the applicant and it is always worth discussing a case professionally with the competent authority. The discretion of the authorities is quite often exercised in favour of applicants and employers who are important for the labour market in the region.

Nevertheless, this discretion must always follow justifiable arguments based on the immigration regulations, and ends when a decision would be unlawful or arbitrary.

High net worth individuals and investors

Is there a special route for high net worth individuals or investors?

There are special rules for individuals performing self-employed activities in the German market. When applying for work authorisation, they must regularly submit a business plan and financials. In addition, the authority checks whether the intended activity is important for and has positive effects on the business development of the region. The immigration authority will most likely involve the chamber of commerce for its assessment. Under current German immigration law, there is no provision for fast-track applications in these cases.

Currently there is no special visa category for investors or wealthy retirees who wish to reside in Germany for their own benefit.

Is there a special route (including fast track) for high net worth individuals for a residence permission route into your jurisdiction?

See question 16.

Highly skilled individuals

Is there a special route for highly skilled individuals?

Highly skilled scientists or researchers can apply for a permanent residence permit immediately. This permanent residence permit contains unlimited work authorisation.

The Blue Card for highly skilled individuals can be granted to employees with a local German employment contract, a recognised university degree and on meeting a minimum salary level. In 2019, the minimum annual gross salary for a Blue Card application was €53,600. A lower minimum salary (€41,808 in 2019) is sufficient for some specified scarce professions, such as IT specialists, engineers and medical doctors, to compensate for the lack of specialists on the German labour market. The minimum salary requirement is adapted each year by the German government.

A Blue Card holder in Germany qualifies for a German permanent residence permit more quickly than a holder of other German permits.

The German Blue Card does not automatically permit working in other EU countries. The same in reverse applies for a Blue Card issued by another EU country.

Ancestry and descent

Is there a special route for foreign nationals based on ancestry or descent?

There is a residence permit category available for former German nationals, which allows individuals who held, but lost (for whatever reason), German citizenship to apply for residency in Germany.

Minimum salary

Is there a minimum salary requirement for the main categories for company transfers?

There is a minimum salary requirement for all work authorisation categories in Germany. In principle, the foreign national must earn a salary that is equivalent to a comparable German local employee in the German company where the foreigner intends to work. Therefore, the minimum salary is determined on a case-by-case basis for each company and position. The comparable amount must be provided on the application form.

The total gross remuneration of the foreign employee can be composed of base salary and assignment benefits (eg, assignment allowance, housing allowance, per diems) in order to achieve the comparable German salary. It is to be noted, however, that only allowances being paid out as a lump sum for the assignee to use as he or she pleases can be considered. For example, per diems paid out upon submission of receipts or housing or car rental paid directly by the company are not accepted. In some cases, the authorities exercise even stricter regulations requesting that the allowances not be linked to a specific purpose on the payroll.

In some industries (eg, the construction industry, professional cleaning, security), the minimum wage of the German collective bargaining agreements for these industries must sometimes be observed for foreign employees working in Germany even if the employment contracts of the foreign employees are not governed by German law.

Resident labour market test

Is there a quota system or resident labour market test?

In some cases, there is a labour market check to find out whether a German or EU national is available for the job. For most German work permit categories, the authorities can make a discretionary decision on whether a labour market check is required. A labour market check is not required for international staff exchange, other assignment cases and many other immigration categories.

A quota system does not exist in Germany. Only the category of international staff exchange is restricted in number. Under this category, a German company can only apply for as many work authorisations for foreigners as they have German-based employees assigned abroad (in summary: for every German-based employee sent out of Germany, one foreigner is allowed in).

Shortage occupations

Is there a special route for shortage occupations?

The Blue Card offers an easier process for local hires in occupations that are considered scarce in Germany. These are IT specialists, engineers, medical doctors, mathematicians and natural scientists. If all prerequisites are fulfilled (ie, local German employment contract, recognised degree), these individuals can get a Blue Card by meeting a lower annual salary (€41,808 in 2019) than required in the regular Blue Card procedure.

Other eligibility requirements

Are there any other main eligibility requirements to qualify for work permission in your jurisdiction?

If a foreigner intends to apply for a German work permit on the basis of an assignment under an ICT card, he or she must already be employed with the home country company for at least six months to qualify.

For many permit types, such as the Blue Card, it is not sufficient to simply have a university degree; the university and degree type must be listed in the degree recognition database, Anabin.

Third-party contractors

What is the process for third-party contractors to obtain work permission?

A contractor can obtain work permission in Germany if the contractor proves that he or she is an independent contractor (no deemed employment or illegal labour lending), and provides the contract regulations and sufficient medical insurance. The immigration authority checks the public interest of the market in the region and additional criteria before granting the permission.

Recognition of foreign qualifications

Is an equivalency assessment or recognition of skills and qualifications required to obtain immigration permission?

In most cases, an academic background is required to obtain a work permit in Germany and degree certificates from a university are required. Already recognised qualifications can be found at www.anabin.kmk.org. Alternatively, an official recognition process can be initiated, which can take from two weeks to three months. For certain applications, such as the Blue Card, a fully recognised degree is essential.

Extensions and variations

Short-term to long-term status

Can a short-term visa be converted in-country into longer-term authorisations? If so, what is the process?

Apart from a few exceptions, a short-term business or visitor visa cannot be converted in country into a longer-term authorisation to stay in Germany. The foreign national must first leave Germany and apply for a new visa for the longer stay at the German embassy or consulate abroad. In any other cases where conversion into a long-term authorisation is desired (eg, rare emergency or hardship), the competent immigration authorities must be involved and requirements must be discussed individually since these cases are not explicitly foreseen by law and are at the absolute discretion of the immigration authority.

Long-term extension

Can long-term immigration permission be extended?

Yes, it can be extended (see question 12). The extension can be applied for within Germany. The foreign national does not need to leave Germany.

Exit and re-entry

What are the rules on and implications of exit and re-entry for work permits?

The German residence permit allows exit and re-entry at any time. Once a foreigner has left Germany for more than six months (12 months for the holder of a Blue Card or of an EU residence card), the residence permit and work authorisation automatically expires even if it states a longer expiry date. Sometimes, an agreement can be made with the immigration authority before leaving Germany in order to avoid the expiry of the permit. Additionally, the German work and residence permit immediately expires if the foreigner leaves Germany for a permanent reason. Foreigners have the obligation to notify the immigration authority about the termination of their employment or about any changes in their personal status (eg, divorce, if the permit is a dependant permit).

Permanent residency and citizenship

How can immigrants qualify for permanent residency or citizenship?

For permanent residency, see also question 18. In principle, after eight years of working and living in Germany, a foreign national can apply for German citizenship. For permanent residency, the applicant must prove that he or she has sufficient income, has paid social security for a minimum of five years, speaks sufficient German and has knowledge of German society, culture, politics, history and economics. The holders of a Blue Card have quicker access to a permanent residence permit. An application for a permanent residence permit can be made after 33 months of paying into the German social security plan and providing proof of A1 level German skills, or after only 21 months with social security payments and B1 level language skills. Further, foreign nationals who have studied in Germany will also be privileged and can apply for a permanent residence permit after two years of employment in Germany with contributions to German mandatory pension scheme.

End of employment

Must immigration permission be cancelled at the end of employment in your jurisdiction?

If employment is terminated early, the immigration authority should be notified. In all cases, the foreign national must de-register at the town hall when he or she leaves Germany. The town hall automatically communicates the departure to the immigration office.

Employee restrictions

Are there any specific restrictions on a holder of employment permission?

All employment permissions that are issued for the first time are restricted to a certain employer, job position and have a time limitation. Any job change or promotion affects the permission and a change of the employment permission must be applied for at the immigration authority. After two years of employment, a work permit usually ceases to be bound to a certain employer and a change of employer can take place without any additional communication with the authorities.

The permanent residence permit is not bound by restrictions. The foreign national can change employer and jobs without informing the authorities.

Dependants

Eligibility

Who qualifies as a dependant?

Immigration regulations for dependants only apply to married spouses, registered same-sex partners and children under the age of 18 years.

For all other dependants, namely, children older than 18, parents and unmarried partners, dependant regulations do not apply and visas or residence permits for Germany are only granted in very special circumstances and upon fulfilment of special requirements.

Conditions and restrictions

Are dependants automatically allowed to work or attend school?

Spouses receive the automatic right to work. The residence permits of spouses of non-EU national employees state that they are allowed to work without any limitation. All dependent children over the age of six are allowed to, and, in fact, must, attend school.

Access to social benefits

What social benefits are dependants entitled to?

If the spouse or principal employee pays social security contributions in Germany, the dependants regularly benefit from the German social security system (for instance, medical insurance and pension). In some cases, child allowance can be collected for children registered in Germany.

Other requirements, restrictions and penalties

Criminal convictions

Are prior criminal convictions a barrier to obtaining immigration permission?

A criminal conviction or ongoing investigation can lead to refusal of a visa or residence permit, deportation or restrictions on re-entering Germany. Violation of the Schengen visa rules can also lead to immigration disadvantages, such as future problems with visa applications.

In 2011, stricter compliance requirements for employers were implemented into German immigration law. Permission for work can be refused if an employer has violated German immigration and labour secondment rules. Furthermore, a company subcontracting work to a third party is normally liable for the subcontractor’s immigration compliance.

Penalties for non-compliance

What are the penalties for companies and individuals for non-compliance with immigration law? How are these applied in practice?

The penalties can be deportation of the employee, restrictions on re-entering Germany and monetary fines. The fines for an employer are up to €500,000 per case and up to €5,000 for the employee. The maximum fines are only imposed in extreme cases. In the event of serious violation, the employer can face consequences, such as exclusion from public procurement procedures, exclusion from obtaining subsidies and a prohibition on employing foreigners for a certain period.

Language requirements

Are there any minimum language requirements for migrants?

There are no language requirements for the employee unless he or she is applying for permanent residency. In some cases, for dependant visas (family reunion), spouses need to speak or understand German and must pass a German test before they are allowed to join their spouse in Germany. This requirement is also sometimes made after entry into Germany. Exemptions exist, for example, if the principal employee is an EU national (but not German) or a non-visa national, a holder of an EU Blue Card, the couple plan to stay in Germany for less than one year or the spouse has a university degree.

Medical screening

Is medical screening required to obtain immigration permission?

No.

Secondment

Is there a specific procedure for employees on secondment to a client site in your jurisdiction?

There is a specific procedure for purchased software or machine implementation projects that can be used in individual cases for secondments directly to a client site. Also, a Van der Elst visa that applies to third-country nationals who already have a work permit for another EU country can be used for these purposes if the requirements are fulfilled. However, Germany has strict labour secondment rules that must be observed in each case and that make it more difficult to send employees directly to a client site. Therefore, cases such as this should be assessed thoroughly by a German immigration expert beforehand.

Update and trends

Key developments of the past year

Are there any emerging trends or hot topics in corporate immigration regulation in your jurisdiction?

Key developments of the past year40 Are there any emerging trends or hot topics in corporate immigration regulation in your jurisdiction?

The Law on the Immigration of Skilled Workers (which will most likely be implemented at the beginning of 2020) creates the framework for increased immigration of qualified skilled workers from third countries. The aim is to make Germany more attractive to highly qualified individuals and to encourage specialists to come to Germany to meet the demand for qualified personnel.