Investment Guide to Germany Issue 2013 Business Location Location Business Germany Foreword
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Investment Guide to Germany Issue 2013 Business Location Location Business Germany Foreword Dear Reader, Germany is one of the world’s favorite foreign direct As a global agency that acts locally, Germany Trade & investment destinations – reputable international Invest has considerable experience in helping inter- studies consistently confirm Germany’s status as national companies set up business in Germany. one of the world’s most attractive investment lo- cations. It’s not hard to see why. Our comprehensive range of advisory, business in- formation, and project support services help smooth Germany remains the fourth largest economy in the path for easier international investment. Our new the world. Home to Europe’s best-performing and Investment Guide provides an easy orientation point largest economy, Germany generates around one for your future business activities in Europe’s most fifth of total European GDP. Global technology lea- dynamic economy. dership and a highly diversified industry sector are giving rise to all number of market opportunities in The German market was never closer. And setting up numerous industry sectors. business in Germany never easier. We believe that the country’s business and industry Talk to us today to find out how we can help infrastructure and technology and innovation leader- youry business. ship provide the complete “smart” business answer for international investors looking to do business in Europe. That’s why it gives me particular pleasure to pre- DDr.r. JürgenJürgen Friedrich sent you with the new edition of the Investment Guide to Germany. This practical and easy-to-use hand- book guides you step-by-step through the business and company formation process in Germany. Anno Dittmer Anno © Photo: Photo: 4 Investment Guide to Germany 2013 Germany Trade & Invest www.gtai.com 5 Contents 01 Coming to Germany 05 Company Taxation 10-11 Residence Titles 50-52 Corporate Income Tax and Personal Income Tax 11-14 Residence Titles for Differing Business Activities 53-54 Trade Tax 14-17 Residence Titles for Employed Persons 54-55 Value-added Tax 56-57 Tax Declaration 02 Types of Company 20-21 Corporations 06 Labor Market 21-22 Partnerships 60 Finding Suitable Staff 22-25 Branch Offices 26-27 Types of Company Overview 61-63 Flexible Employment Models 64-65 Terms of Employment 03 Company Registration 66-67 Termination of Employment 30-32 Commercial Register 68-70 The German Social Security System 32-33 Trade Office 34 Chambers of Industry and Commerce 07 Legal Framework and Chambers of Crafts 74-75 Business Law 75-76 Basic Information on Litigation 04 Incentives 76-78 Intellectual Property 38-40 Incentives Overview 40-42 Investment Incentives: Cash Grants 42-43 Interest-reduced Loans 08 Addresses 43 Public Guarantees 80 Shareholders 44-45 Labor-related Incentives 80-81 German Economy Partner 46-47 Research and Development Project Incentives 82-84 Federal States Partner 85 Imprint 6 Investment Guide to Germany 2013 Germany Trade & Invest www.gtai.com 7 Coming to Germany 1 Germany distinguishes between different kinds of residence titles for specific purposes subject to the length of stay and intended (business) activity in Germany. These include Schengen and national visas, residence and settlement permits. An easy-to-acquire Schengen visa (business-visa) is sufficient for conducting most business and adminis- trative activities which need to be organized prior to locating to Germany. Robert Wilson www.fotolia.de – © Source: Source: Coming to Germany Residence Titles Application and Issue Nationals of certain If a visa is required for entering Germany, an ap- countries do not Germany distinguishes between three different 1 propriate application must generally be made pri- require a Schengen kinds of residence titles: or to entering Germany at the responsible German visa for short-term J Visas (Schengen and national) embassy or German consulate. The corresponding stays in Germany. embassy or consulate will issue the required visa The Federal Foreign J Residence permit in the applicant‘s home country within a few weeks. Office is able to J Settlement permit Application costs EUR 60 regardless of international provide detailed location. information. A visa authorizes the holder to enter and stay in auswaertiges-amt.de Germany for a temporary period (up to 90 days per It is possible to download visa application forms for six-month period from initial date of arrival). A re- free from the website of the German Federal Foreign sidence or settlement permit authorizes the holder Office (Auswärtiges Amt). Applications for a Schengen to stay for the long term (more than 90 days per six- visa can be sent directly to the Federal Foreign Office month period) or to work on a self-employed basis online via an electronic application acquisition sys- or as an employee in Germany. tem. Certain exceptions Who Requires a Residence Title? Residence Titles for Differing exist for citizens of EU citizens and citizens of the states of Iceland, Nor- the new EU states of way, Liechtenstein, and Switzerland do not require Business Activities Bulgaria and Romania any form of visa, residence or settlement permit to Along with the investor‘s country of origin, the re- who may require a be able to settle or work in Germany. quired residence title depends on the intended busi- work permit until the ness activity in Germany. It is not always necessary end of 2013. Please Citizens of non-EU countries require a Schengen visa to apply for a residence permit if a company is to be refer to our website. for short-term stays in Germany (up to 90 days per established in Germany. However, to manage a com- six-month period starting from the initial date of ar- gtai.com/visa pany on location, a residence permit is generally re- rival). All non-EU citizens require either a residence quired in order to carry out a self-employed or depen- or settlement permit if the duration of the stay ex- dent activity. ceeds 90 days. For this purpose, a national visa is issued for the trip to Germany by the responsible German embassy in the applicant‘s home country or country of residence. This is then converted into a residence permit in Germany by the responsible local immigration authority. 10 Investment Guide to Germany 2013 Germany Trade & Invest www.gtai.com 11 Coming to Germany Establishing a Business On-Site Company Management A Schengen visa is generally sufficient (usually Business operators from non-EU countries and who 1 called a business visa in this context) for most steps manage their company on location in Germany as a required to establish a business in Germany. self-employed person require a residence permit for the purpose of self-employment. This permits a 90-day stay in Germany, during which time all of the key business formation steps can be This is generally issued where: An overview of the carried out. These include: residence permits J an economic interest or a regional need exists required for different J The conclusion and notarization of the regarding business investments of the types of business articles of association intended nature; activity in Germany JApplication for entry in the commercial J positive economic consequences are to be is provided at the register (through a German notary) expected from the investment project and Germany Trade & Invest website. J Trade registration J the financing is secure. gtai.com/coming- J Other preparatory activities during the business The local immigration office (Ausländerbehörde) in- to-germany establishment phase (such as opening a bank dividually assesses to what extent these criteria are account or the conclusion of rental agreements) met. It takes into account the following aspects: J Negotiations and the conclusion of contracts J Viability of the underlying business idea with business partners J Foreign national’s entrepreneurial experience Please note: Establishing a business in Germany J Level of capital investment and availability of capital with a Schengen visa (business visa) is no guarantee for the subsequent issuing of a residence permit. For J Effects on the employment and training situation this reason it is necessary – appropriate to the inten- J Contribution towards innovation and research ded business activities in Germany – to apply for a in Germany residence permit for the purpose of self-employment or regular employee purposes in advance. The local immigration office involves the local trade office as well as the local Chamber of Industry & If the establishment of the company and the stay in Commerce (Industrie- und Handelskammer), the Germany exceeds 90 days it is also necessary to apply Chamber of Skilled Crafts (Handwerkskammer) or for a residence permit in advance. other competent authorities regulating admission to the profession concerned. 12 Investment Guide to Germany 2013 Germany Trade & Invest www.gtai.com 13 Coming to Germany A residence title for the purpose of self-employment Federal Employment Agency Approval is limited to a maximum of three years. If the As a rule, a residence permit for the purpose of ta- 1 investment project is successful (and success and king up employment is only issued for certain pro- sustainability appear to be secure over the long fessional groups (e.g. academics, IT professionals, term), after three years it is possible to issue a (per- managerial employees, and employees with specia- manent) settlement permit. list knowledge), and additionally, only if: J it is possible to demonstrate a specific offer Who is considered self-employed? of employment, and Foreign business operators are considered to be self-employed if they are: J the Federal Employment Agency (Bundesagentur für Arbeit) has issued its formal approval. J Sole traders (including freelance professions) J Partners in a partnership The Federal Employment Agency issues its approval if no suitable German employee or employees from J Managing partners who are not employees other EU member states are available (so-called of the company “priority check”) and the foreign employees are hired J Managing directors or managerial employees at the same terms and conditions of employment as with proxy or full power of attorney who comparable German employees.