WORK PERMIT IN GERMANY – GmbH
Working in Germany by Establishing a GmbH: "Working in Your Own Company" Session Scope
For foreigners (especially citizens of non-EU/EEA countries) who want to establish a GmbH (Gesellschaft mit beschränkter Haftung) in Germany and “work in their own company,” two separate areas become intertwined: company law (establishment and operation of the GmbH) and immigration law (residence/work rights) . In practice, the most critical mistake is: “I’ve established the company, now I can work.” No—even though establishing a GmbH is often possible, obtaining the appropriate residence permit (Aufenthaltstitel) separately and with the correct structure is necessary to actually work/run the business in Germany . Indeed, while some of the investment/establishment stages can be completed with a short-term entry, this alone does not guarantee long-term residency rights. ( gtai.de )
In this article, behind establishing a GmbH (Gross Domestic Work Company) to obtain a work permit ; the status of "working in one's own company" under immigration law; §21 AufenthG (selbständige Tätigkeit) ; how to strengthen the case; and the most common mistakes.
1) Being a "company partner" and having "residence/work permit" are not the same thing
1.1. Being a partner (Gesellschafter) is often optional, but it does not mean "working"
In Germany, it is generally possible to be a partner (shareholder) in a GmbH under company law; in fact, it is generally emphasized in the IHK (Imperial Court of Germany) resources (ihk.de) that no special permission is required for foreigners to become partners. However, from outside the EU/EEA , actions such as participating in the management of the company, signing contracts on behalf of the company, and managing daily operations fall under the scope of "work/economic activity" in immigration law, and without the appropriate residence title is risky.
1.2. “Working in one's own company” falls under §21 (self-employment) in most cases
If a person is both a partner in a company and the person managing it (e.g., a majority shareholder/manager), in practice they are often an entrepreneur/self-employed rather than a "dependent" employee . Germany Trade & Invest (GTAI) explicitly states that foreign entrepreneurs managing companies in Germany, and especially those who are majority shareholders and also managers in GmbHs, are typically considered "self-employed". (gtai.de)
The Berlin ServicePortal also clearly states under §21 that the session can apply not only to company founders and sole proprietors, but also to directors and legal representatives of capital companies (especially if they bear “entrepreneurial liability”). ( ServicePortal Berlin )
2) Legal framework: §21 AufenthG and basic tests
In Germany, the "main backbone" for establishing a company (commercial enterprise) is often Article 21 of the Aufenthaltsgesetz (). This approach doesn't simply require a business idea to exist "on paper"; economic need, impact, and financing .
2.1. §21 (1) – Three basic criteria for establishing a commercial enterprise / entrepreneurship
The classic formula appears with the same core on both the Federal Foreign Office and local administration portals:
- Economic interest or regional demand
- Expectation of a positive impact on the economy .
- Securing financing with equity or loan commitment (Auswärtiges Amt)
These three elements form the "backbone" of the application. The content is measured by questions such as: Is the business plan realistic? Is there market and customer access? Is the capital sufficient? Is there a contribution to employment? What is the founder's experience? IHK Region Stuttgart explicitly states that the assessment considers factors such as "sustainability of the business idea, entrepreneurial experience, level of capital, employment/apprenticeship impact, contribution to innovation/research." (ihk.de)
2.2. The principle of "Title first, then activity"
The most dangerous breach in practice is starting to "actually work" before obtaining a residence permit. The IHK Region Stuttgart explicitly warns that "a residence permit must be obtained before commencing activities; otherwise, there will be a legally binding violation." (ihk.de)
2.3. Agenda for those over 45: old age security (Altersversorgung)
The Foreign Office's FAQs (Factory Qualifications Questions) clearly state that applicants over 45 years of age may be required to provide proof of "adequate old-age security" in applications under section 21. The BAMF (Federal Office for Migration Management) also points to the need for additional "guaranteed old-age insurance/measures" for those over 45. (bamf.de) Furthermore, the Berlin ServicePortal will release application notes on the assessment of old-age security as of July 1, 2025. (ServicePortal Berlin)
3) Establishing a GmbH: the corporate law aspect (and its connection to the registration file)
To strengthen the residence permit, it must be shown that the GmbH has not only been “established” but also that the organization is sound and consistently structured . This is because the immigration office often looks for the difference between “entrepreneurial responsibility” and a “paper partnership”.
3.1. The core of a GmbH: capital and liability
The classic advantage of a GmbH is limited liability; however, this protection only becomes meaningful in practice upon registration in the commercial register (before registration, at the “GmbH i.Gr.” stage, the risks differ). The IHK Düsseldorf details that a GmbH is a “capital company”; that the minimum capital is 25,000 EUR ; that a single share can be at least 1 EUR; and that in cash incorporation, there are certain payment thresholds before registration in the register. ( ihk.de ) The rule that the minimum capital is 25,000 EUR is also found in GmbHG §5. ( gesetze-im-internet.de )
Impact on the session file: The capital structure must be "real"; the source, transfer, and usage plan must be consistent. The "financial security" criterion (equity/credit) directly intersects with this heading.
3.2. Establishment steps: minimum framework that should be reflected in the file
The Chamber of Commerce in Cologne (IHK Köln) outlines the typical steps in establishing a GmbH/UG (Graphics , Customs, and Logistics Office) in a clear checklist: determining basic data, verifying the company/title and business activity with the IHK, notarization , capital investment , registration with the commercial register ( Gewerbeanmeldung ) , registration with the tax office, Transparenzregister , and further steps. ( ihk.de )
When you translate this list into a session file as a "document set," the following types of documents typically become important:
- Draft or signed Gesellschaftsvertrag (company agreement)
- Notary documents and registration process documents
- Bank account / proof of capital payment
- Commercial register entry (HR-Auszug) or proof of process
- Business registration (activity registration)
- Tax identification number/Finanzamt correspondence (depending on the organization)
4) Which role is used to say "Working in one's own company"? (Geschäftsführer node)
4.1. What does the session administration look for: “unternehmerische Verantwortung”
The Berlin ServicePortal explicitly states that the hearing under §21 may also apply to directors of capital companies , provided they “bear entrepreneurial responsibility.” ( ServicePortal Berlin ) In practice, this implies the following:
- Who makes the company's strategic decisions?
- Is the CEO's authority genuine, or is it merely "strawmanistic"?
- Does it play a critical role in the applicant company's ability to maintain a presence in the market?
- Is he merely a nominal “manager,” or is he at the heart of the operation?
The IHK Region Stuttgart also emphasizes criteria such as holding a share of more than 50% or acting with entrepreneurial responsibility , "for managers of legal entities," stating that mere capital participation is insufficient. ( ihk.de )
4.2. Majority shareholder + director scenario
GTAI explicitly lists those who are the majority shareholder and also the director of a GmbH ( gtai.de ) as examples of self-employed individuals . In this scenario, "working in one's own company" mostly means:
- Entrepreneurship session (§21) +
- company's commercial activity +
- management style where the applicant acts as the director
.
4.3. Minority shareholder or “contract manager” scenario (risky gray area)
If the individual is a minority shareholder in the company and effectively acts as a "dependent employee," the case may fall under the "employment" regime rather than §21 (I won't go into detail here as §21 is the main focus of this article). The main risk here is that applying in the wrong way will both prolong the process and create grounds for refusal. Therefore, the role definition for the goal of "working in one's own company" should be clearly defined from the outset.
5) How can the §21 file be strengthened? (Business plan, evidence, institutional opinion)
5.1. Business plan: not just a "text", but a "proof file"
The IHK Region Stuttgart emphasizes that for the assessment of §21, (especially for new companies) a compact but robust business plan, revenue projection, investment plan, and capital requirements plan can be expected; and for existing companies, financial sustainability documents such as balance sheets/annual closing statements are of great importance. (ihk.de)
In practice, a business plan should answer these questions:
- What specific need are you addressing in Germany ?
- Who is the target customer? What is the sales channel?
- What are competitors and differentiation?
- What is the cash flow like over the next 12–24 months?
- Is the source and timing of the funding clear?
- Is there any proof of market, such as a contract/letter of intent/pre-order ?
- What is the founder's experience and network like?
5.2. IHK/HWK opinion: External validation of the “three criteria” test
The Berlin Serviceportal explicitly states that, in examining these criteria, the immigration authority (LEA) usually consults with the IHK or Handwerkskammer (German Chamber of Commerce ). ( ServicePortal Berlin ) The Stuttgart IHK also notes that in local practice, the immigration office seeks the IHK's opinion. ( ihk.de )
Therefore, in the file:
- field of activity,
- financing,
- market access,
- the employment plan
must be understandable and quantifiable "in the language of the HRC".
5.3. Documents: A set of documents proving you are an "entrepreneur"
IHK Region Stuttgart also lists a sample set of documents for the IHK assessment. This list includes documents that are considered critical, especially for those aiming to operate by establishing a GmbH (Gross Domestic Product)
- Business plan / activity statement and financial documents,
- If available, a summary of the trade registry
- Gewerbeanmeldung,
- company contract
- Proof of capital (equity/debt),
- CV and proof of qualifications,
- Manager's contract and salary information,
- lease agreements,
- Proof of employment relationship. (ihk.de)
This ensures that the claim of "I work for my own company" is established not just verbally, but through a triangle of role, contract, and funding.
6) Proof of income and “subsistence” (Lebensunterhalt): Salary or dividends?
In applications under §21, the most sensitive aspect of the case is "securing livelihood". There are two layers to this:
- Company viability (economic sustainability of the business)
- Applicant's personal livelihood (how the company will finance you)
The Foreign Office ( Auswärtiges Amt ) states that if the business idea is successful and provides for the individual and their family, an extension/gradual advancement may be possible, and in some cases, a resident permit can be obtained after 3 years. The BAMF (Federal Office for Migration Management) also states that after a permit granted for up to three years, a resident permit is possible if the business is successfully run and the family's livelihood is secured. ( bamf.de ) GTAI summarizes the same framework as "3 years + expectation of sustainable development + sufficient income". ( gtai.de )
Practical comment:
- Company turnover alone is not enough; your personal income model needs to be clear.
- If a CEO's salary is being planned, its impact on company cash flow and its tax/insurance implications should be considered.
- If dividends are planned, questions arise such as "when will they be distributed / is it realistic to distribute them in the initial years?".
7) Duration, extension and permanent residency: How does the “3-year” threshold work?
7.1. Initial permit period
The limitation of the hearing period granted under §21 to "a maximum of three years" is evident in both the summaries of the legal text and the administrative explanations. (gesetze-im-internet.de)
7.2. Possibility of obtaining a permanent residency permit after 3 years
In some business scenarios, if the business is successful and provides a stable livelihood settlement permit after 3 years is explicitly mentioned in official sources. The Berlin page of the federal administration portal also notes that self-employed individuals can apply for a settlement permit after 3 years (Bundesportal). The foreign affairs office also points to the possibility of a settlement permit after 3 years for commercial businesses such as manual trade/retail (Auswärtiges Amt). (Since specific conditions can vary from state to state and from case to case, the critical factor here is the trio of "success + sustainability + livelihood".)
8) Application process: From outside Germany or from within Germany?
As a general rule, if a person from outside the EU/EEA is going to Germany for a long-term stay, the national visa process; this is then converted to a residence permit in Germany. IHK Region Stuttgart states that, as a rule, the residence permit application (section 21 at the foreign representation before entry ; however, applications can be made from within Germany under specific conditions. (ihk.de)
There's also a practical update on process management specific to Berlin: The Berlin State Office for Migration (LEA) announces that residence applications under §21 can be submitted digitally/online , and this is particularly emphasized as of 04.02.2026. ( Berlin ) The Berlin Serviceportal also includes procedural notes on the extension of the current title under certain conditions, with PDF confirmation after the online application. ( ServicePortal Berlin )
9) An important footnote for Turkish citizens: agreements and the possibility of exceptions
IHK Region Stuttgart states that international agreements (meistbegünstigungs/wohlwollensklauseln) concluded by Germany with certain states may provide for an assessment independent of the conditions of §21(1) in some cases; that Turkey is included in the list and that this will be examined by the competent authority. ( ihk.de ) This should not be read as an automatic right; however, it is a technical point that should not be overlooked in the “case strategy” for Turkish citizens.
10) The most common mistakes (and points that increase the risk of rejection)
- Role ambiguity: Failure to prove that the person is actually performing managerial/management duties while being referred to as a "partner" (or vice versa: being portrayed as a dependent employee and thus falling under §21). (ihk.de)
- Financing ambiguity: Capital is available, but its source/transfer/business plan is unclear; there is no credit commitment; cash flow is unrealistic. (Auswärtiges Amt)
- Lack of market proof: No documents demonstrating a "German connection" have been produced, such as a letter of intent, contract, client list, pilot project, or references.
- Commencing operations without permission: Risk of working/running a business without the appropriate title. (ihk.de)
- Neglecting Altersversorgung (older registration) in cases of 45+ files: Processes prolonged by subsequent additional documentation. (Auswärtiges Amt)
Conclusion
The goal of working in Germany by establishing a GmbH (Gross Domestic Company) doesn't end with simply "setting up the company"; the real issue is correctly defining the status of "working in one's own company" under immigration law and meeting the three-part test of §21 (need-impact-financing) with concrete evidence . As in the Berlin practice, with the right structure, GmbH directors can also be assessed under §21; however, this requires "entrepreneurial responsibility" and a complete case file. ( ServicePortal Berlin )
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