The essence of the draft law (it will become a law after publication in the 'Law Gazette') is the creation of a new legal basis for the residence of foreigners in Germany called the 'Blue Card'. It can be issued to foreigners with higher education or comparable qualifications for work in Germany at a specific workplace with an income level that precludes recourse to public assistance. The minimum salary is set at 44,800 euros per year or 3,800 euros per month gross. This salary can be considered achievable for a qualified specialist.
The competent authorities approve a list of shortage occupations. To obtain a Blue Card, a foreign worker in a listed profession only needs to achieve an annual gross income of 34,944 euros. Shortage occupations include, for example, specialists in computer technology, doctors, engineers.
The law will facilitate the issuance of business visas to foreign entrepreneurs and self-employed persons for conducting their own business in Germany. Previously, the law required investments of 250,000 euros and/or the creation of five jobs, which certainly was a high barrier for entrepreneurs. This condition is removed without any replacement. The new law, in the form of a new version of §21 of the Residence Act, regulates business immigration as follows:
A foreigner may be granted a residence permit for the purpose of self-employment if:
1) there is a regional interest or regional need for the stated type of activity; 2) the activity will have a positive impact on the German or regional economy; 3) the financing of the project is guaranteed by own funds and/or reliable credit guarantees.
These are, in fact, all the prerequisites for issuing a business visa. As you can see, the legislator has tried to reduce administrative and bureaucratic barriers, which is positive, although such a broadly outlined legal framework gives the competent local authorities a great deal of discretion when considering applications from foreign interested parties, taking into account local specifics.
Processing of applications for business visas is entrusted to local German immigration authorities. The authorities assess the feasibility and realism of the foreigner's idea, for which they request expert opinions from specialized scientific organizations and professional associations. The authority contacts the agency for an assessment of the regional labor market and a list of shortage occupations or commercial offers. The package of initial documents includes proof of the project's financial viability.
The decision on an application for a 'Blue Card' work visa or a business visa is made by the German embassy in cooperation with the local immigration authority. For obtaining a business visa, the personal prerequisites of the applicant are also important: age, absence of a criminal record, fraudulent bankruptcies, and some other details depending on the circumstances. The personal qualities of the applicant are checked by the German embassy in the applicant's country of residence. The applicant's previous work and entrepreneurial experience is important. If a former taxi driver in Chișinău suddenly wants to become an entrepreneur in Germany, he will have to reliably prove the sincerity of his intentions.
Of course, assessing a business project with international participation is not simple and requires specialized knowledge. German officials and experts often lack this knowledge. Therefore, to avoid mistakes, the immigration authority previously usually relied on the clear figures of investing 250,000 euros in the German economy and creating 5 jobs. All business ideas below this high mark were dismissed by the immigration authority as not profitable for Germany.
These figures, intended as a guideline for the authority, turned into weights and hindered doing business in Germany. Eliminating clear numerical benchmarks will force officials to focus on the merits and assess the foreigner's business idea for its usefulness to the German economy. Of course, previously it was possible to inflate investments to 250,000 euros using accounting tricks and on that basis demand a business visa. Nevertheless, such cases were rare, and for most foreign businessmen planning business activity in Germany, the elimination of threshold limits will significantly facilitate the implementation of their meaningful business projects.
The first partner of the foreign entrepreneur remains the German diplomatic mission. The foreigner must indicate the location of his intended business activity in Germany, then the German diplomatic mission sends the documents to the local immigration authority. After reviewing the initial project and finding it promising, for a detailed review the authority will request a business plan, financing plan and other documents, then send them for review to the local chamber of industry and commerce.
The new rules will facilitate self-employment for start-up entrepreneurs, those who in the initial phase of the project do not yet have sufficient financial resources to create several jobs. Specialists in computer technology will find it easier to establish a personal firm with a single employee (who is also the owner of the firm). These specialists can initially work from home, forgoing unaffordable investments in office space and staff.
Thomas PUE,
German lawyer.