Starting a company in Germany as a foreigner or non-resident

Who can start a business in Germany?

In theory, anyone can start a company in Germany — regardless of nationality. But the process looks very different depending on where you’re from:

• EU or EFTA (i.e., Switzerland, Norway, Iceland, Liechtenstein) citizen: You enjoy full freedom of establishment. You can live, work, and start a business in Germany without a visa or residence permit.
• Rest of the world (so called third-country nationals 💬Bürger aus Drittstaaten): You need a valid visa or residence permit that explicitly allows self-employment.

📌 Important: If you are physically in Germany on a student, tourist or dependent visa, you cannot start a business unless your residence permit is changed.

 

What type of business is the right one?

In basic terms, international founders should distinguish three different types: Freiberufler, solo proprietorships / civil partnerships with unlimited liability and limited liability companies.

If your profession does not qualify as a liberal profession 💬Freier Beruf, your business will automatically be considered commercial 💬gewerblich. Now you just have to decide what kind of business you want to set up. The two most common legal forms for non-German founders are:

 

Sole Proprietorship

• Easy to register at the local trade office 💬Gewerbeamt
• No notary or minimum capital required
• Full personal liability for business debts
• Ideal for freelancers or solo founders
• Two or more sole proprietors can partner up as a civil law partnership 💬Gesellschaft bürgerlichen Rechts

Read more about sole proprietorships.

 

LLC (e.g., GmbH)

• Requires €25,000 in share capital (only €12,500 paid in at registration)
• Separate legal entity with limited liability
• Preferred by investors and banks
• Requires notarisation, double entry bookkeeping and annual financial statement

💡 The GmbH is Germany’s version of the private limited liability company (LLC), suitable for more formal ventures, startups, or international operations. There is a starter version of the GmbH for founders with little capital, the UG. Learn more about the GmbH.

Shareholder vs. Managing Director

This is where many international founders get confused. If you’re planning to set up an LLC like GmbH or UG, it’s essential to know:

• Shareholders who only invest and are not involved in day-to-day management do not need a visa or residence permit.
• Managing Directors (MDs), however, are considered employees of the company — even if they’re also shareholders — and need a residence permit that allows them to perform this function in Germany. Find our detailed list of requirements below.

📌 Tip: If you’re living outside of Germany and want to form an LLC, you’ll either need to:

• Get a residence permit that allows you to act as MD
• Appoint someone in Germany as MD with full signing authority

 

Visa application

To get a national visa 💬Visum for self-employment or company formation, you must apply through the German Embassy or Consulate in your home country. This long-stay visa costs €75, is valid for three years and includes multiple entries.

There are two main permit paths for business people:

• Self-employed entrepreneur (§ 21 (1) AufenthG)
  For founders who want to start their own business or act as a managing director of a company such as a GmbH.
• Liberal professionals 💬Freiberufler (§ 21 (5) AufenthG)
  Only applies to a very limited number of professions.

💡Keep in mind: The goal is to upgrade your national visa to a residence permit after entering Germany legally.

General requirements

• Passport
• Photographs (please mind the format!)
• Proof of accommodation
• Proof of capital or financing
  • Blocked account
  • Bank statements, other savings
  • Declaration of Commitment 💬Verpflichtungserklärung by a German resident / company
• Retirement plan (if over 45)

 

Additional documents for self-employed people

• Revenue projections / financing plan
• Detailed business plan

Additional documents for Freiberufler

• Professional license such as vocational training, diploma or other qualifications to practice 💬Berufsausübungserlaubnis
• Two letters of intent 💬Absichtserklärung of future clients who plan to pay for your service
• Monthly revenue projections 💬Ertragsvorschau

 

Visa application in 5 steps

1. Fill out the form
2. Get all of the required documents in ordered
3. Schedule an appointment at your domestic German consulate or embassy
4. Submit your application and biometric data in person
5. Receive your visa and travel to Germany

Soon after your arrival, make your way to the Federal Foreign Office to apply for a more permanent residence permit. Read more about the visa application process here.

 

Residence permit

After entering Germany, your goal is to obtain a special residence permit 💬Aufenthaltserlaubnis. If you’re a non-EU or EFTA citizen, the first step is checking your eligibility for a residence permit for the purpose of self-employment 💬Aufenthaltserlaubnis zur selbstständigen Tätigkeit.

Requirements for entrepreneur permit (§ 21 (1))

To be approved, your business idea and business model will be evaluated. These are the requirements:

• Fulfils an economic interest or regional demand
• is expected to have a positive effect on the local economy
• is financially viable, backed by your own funds or credit
• Includes adequate retirement provisions if you’re over the age of 45

📌 Tip: German immigration authorities often work with the local chamber of commerce or economic development agencies to evaluate your business idea.

Requirements for managing directors

This is not a well-know fact but there is a set of requirements that only applies to applicants who want to become an MD.

General requirements

• Proof of residence
• Proof of training and qualifications, e.g., professional experience, certificates or diplomas including certified translations
• Proof of German language skills level B1

Self-employed MDs

• Detailed CV
• Depending on the German state 💬Bundesland you may need additional paperwork

Employed MDs

• Visa including work permit
• Employment contract including salary amount
• Employment insurance
• Depending on the German state 💬Bundesland you may need additional paperwork

Read more about other types of residence permits. Looking ahead, the ultimate goal is to obtain a permanent settlement permit after residing at least 5 years in Germany.

 

Special conditions for non-EU citizens

Starting a company from abroad involves more than just permits. These practical challenges often slow things down:

Opening a Bank Account

German banks follow strict KYC (Know Your Customer) rules. As a non-resident, you may face delays, especially if you’re not form a EU member state. Most banks will request a physical presence or a video identification process. Learn more.

Remote notarisation (corporations only)

While remote incorporation is technically possible, most notaries require physical presence. If you cannot attend, you must issue a notarised power of attorney Vollmacht abroad, translated and apostilled. Learn more.

Certified translations and legalisations

Documents such as passports, certificate of registration, and powers of attorney must be:

• Translated by a sworn translator
• Legalised with an apostille or consular authentication

📌 Tip: Speak to your chosen German notary before collecting your documents. This saves time and prevents rejection.

Time Frame

• Embassy processing: 6–12 weeks, depending on location
• Local immigration office 💬Ausländerbehörde: 2–4 additional weeks

📌 Tip: Always check with your local consulate for updated processing times and forms. Some regions have special checklists and procedures.

 

Business Plan and Financial Proof

The business plan is the cornerstone of your visa application. It must clearly demonstrate that your business is both economically viable and beneficial to the German market. Immigration authorities will evaluate whether your concept meets a regional demand, contributes to innovation, or creates local jobs.

In addition to your business model, you must provide a detailed financial forecast outlining expected costs, revenue, and funding sources. This includes proof of available capital, investment commitments, or access to credit. A strong business plan — ideally prepared with expert guidance — greatly increases your chances of approval.

What to Include

• Company name and legal form
• Market analysis
• Marketing and sales strategy
• Financial forecasts (3-year P&L and liquidity plan)
• Number of jobs created or preserved
• Capital structure and funding plan

📌 Tip: Avoid vague statements. Immigration officers want numbers and clear projections, not just ideas.

 

Step-by-step: Self-employment in Germany

You’ve secured all the paperwork to get started? Great! Once you’re in Germany (or have a legal representative), the steps to set up your company vary depending on the business you plan to set up:

If you choose a sole proprietorship or qualify as a Freiberufler, the process is much more straight-forward. However, all options have these steps in common.

1. Secure a business address
   Needed for all legal filings and bank setup. Careful, using a virtual office is highly regulated. Read our guide to get it right without wasting time.
2. Open a business bank account
   It’s not mandatory to open a new one for your sole proprietorship if you already have a German account but it’s always recommended to separate your private and professional finances.
3. Register with the proper authorities
   • Local trade office 💬Gewerbeamt — skip this one if you are a Freiberufler
   • Federal tax office via ELSTER 💬Finanzamt
   • Transparency Register 💬Transparenzregister: For corporations only

📌 If you are starting an LLC, there are a few more steps involved. Check out our handy step-by-step guide.

 

Tax registration and social security obligations

Once the company is operational, here are the key tax and insurance steps:

Tax number and VAT ID

After registering with the Finanzamt, your company will receive:

• A tax number 💬Steuernummer — required for invoicing and banking
• If requested, a VAT ID 💬USt-IdNr. — needed for intra-EU trade

Accounting

• LLCs must follow double-entry bookkeeping
• Annual financial statements and filings are mandatory

 

Social Security

• Freiberufler may be required to contribute to pension schemes
• MDs may be exempt, depending on contract
• Health insurance 💬Krankenversicherung is mandatory for all legal residents

📌 Tip: Hire a tax consultant with experience in international structures. Mistakes are costly and difficult to correct.

 

Language and bureaucracy

Language Barriers

Most government services, forms, and correspondence are in German. Some online portals (like ELSTER) are available only in German.

• Notaries and public offices will expect official documents in German
• Translators or bilingual legal help is highly recommended

 

Bureaucracy

Expect the following:

• Limited digitisation
• Long waits at public offices
• Preference for written (paper) communications

📌 Tip: You don’t have to do it all on your own! Many international founders use a professional formation service to reduce the red tape and handle filings on their behalf. Experienced support to cut through language barriers and endless online searches will often reduce money, time and energy wasted.

 

Non-residents: Forming a company remotely

Let’s say you are a German or EU citizen but live abroad. As a non-resident, it is possible to set up a business without being physically in Germany but there will be a few hurdles.

Notary appointment: Who must attend it?

A notary appointment is mandatory for establishing a corporation, such as a UG. If any shareholder cannot attend, they must issue a power of attorney authorising someone (often the managing director) to act on their behalf.

It is a bit more tricky when it comes to absent MDs since they are required to make an affidavit or statement in lieu of an oath pursuant to Section 8 para. 3 GmbHG. A lawful proxy document has stricter requirements:

• Notarised in the shareholder’s country of residence
• Presented in German, or accompanied by a certified translation
• Carry an apostille or legalisation, depending on the country of origin

📌 Tip: You should keep in mind that authenticating a proxy can add several weeks to your formation timeline. It’s often worth weighing this delay against the convenience of travelling to Germany to sign the documents in person—even if it involves applying for a tourist visa.

Forming a company abroad as a German citizen

If you’re a German national and cannot attend the notary appointment in person, you can still move forward by issuing a power of attorney to a trusted representative in Germany.

Here’s how the process works:

1. Receive the documents from the German notary
   Once the formation documents are prepared, your notary will send them to you by post or email.
2. Visit your local German embassy or consulate
   Bring printed copies of the documents and your ID. Do not sign anything beforehand. You’ll sign them in the presence of a consular officer, who will notarise the signature.
3. Send the original documents back to the notary in Germany
   Only after receiving the authenticated originals can the notary complete the incorporation and submit the registration to the commercial register.

 

Tips for a smoother set-up

✅ Plan at least 3–6 months in advance
Visa and registration processes are time-consuming.

✅ Start with the business plan
It helps define your path and is essential for immigration.

✅ Pick the right bank early
Some digital banks are friendlier to international clients than traditional ones.

✅ Consider the UG form if short on capital
You can convert it to a regular GmbH later.

✅ Don’t cut corners with translations
Incorrect paperwork is a major cause of rejections.

✅ Ask for help if needed
Nothing makes the process harder than being stuck on step 1 or 2.

✅ Make a budget for expert consultants
You may need a lawyer, tax consultant, translations or other services along the way.