New Residency Law

Changes since January 2005

Starting with this year the “ Ausländergesetz (Law on Foreigners)” went out of force for the benefit of “ Aufenthaltsgesetz (Residence Law)”.

As the names already show a new policy seems to have arrived – after more than three seemingly endless years of discussing, renegotiating, and standstill. This article will highlight the main changes for temporary sojourns.

I. General Thoughts

The new law has now only three permits for residing in Germany: Visa, Residence Permit, and Settlement Permit. Already this brings much clarification and really shows a governmental policy to welcome and not ward off foreigners. Until now there were numerous and easily confusable permits.

Following the wish to simplify the bureaucracy a one-stop government office has been established. Practically seen, this brings the pleasant advantage of only having to visit one office for residence and work permits and not two, as previously. Permits for both residence and work, anyhow, will not be decided upon by the respective agencies themselves but granted or refused only by the Ausländeramt . Another exciting detail is that every residency permit must specifically either permit or forbid (self-) employment. The law favors granting permission to highly and medium qualified professionals. Persons with low or no vocational training are not welcome.

The rules for obtaining and prolonging residency depend very much on the reason you are here. Such reasons can be family, profession, investment, retirement, education in school, standard or technical universities, or language study. The law, however, sets up almost so many exceptions to rules that foreigners are generally as welcome as they were before.

A visa is now only issued for transit reasons or temporary sojourn and does not qualify you for permanent residence. You will receive a visa if you are often in and out of Germany or if you plan to remain for longer than three months. A typical person for this would be an executive consulting with German or international clients on a project.

A Residence Permit allows you to stay in Germany and qualify for permanent residence, which is granted in the form of a Settlement Permission. A general rule of thumb regarding Residence Permits, is that the more highly qualified you are, and the more advantageous it is for Germany for you to be here, the easier it will be for you from the beginning. The best and brightest will practically receive "red carpet treatment", and specialists will easily find employment in positions which are unfilled after public offerings for current residents. Applicants seeking residents who are only qualified for menial jobs will find it difficult, if not impossible, to secure a residence permit, as there is currently high unemployment within the current population which is not well-educated. The pecking order for employment gives Germans the highest privilege, followed by citizens of the other European Union countries, followed then by preferred-partner (aka "buddy") countries, such as Australia, Japan, New Zealand, Switzerland, USA.

II. The Employee's Situation

The residency for employment is subject to approval of Federal Labor Office. This office will grant you an employment permit if there are no negative effects for employment of privileged persons and you will be employed in accordance with German standards. “German standards” means here in such working conditions and with an equal payment rate as Germans would have.

As you might imagine, highly qualified professionals are those which will help Germany play a major role in global competition. Such persons are generally (university) teachers, scientists with specialized knowledge, or academic assistants in outstanding professions. (?standing out positions.?) Other specialists and executive officers with special experience (who typically receive salaries above € 75.000) are also most welcome.

Your spouse and/or kids can join you in moving to Germany if they will not be relying on social welfare. Your spouse will be able to immediately start on a job or work independently (self-employed). The spouse’s permission to stay will be extended as long as the cohabitation exits. Your better half and/or your children will be allowed to subsequently follow you if you have lived here on a residence permit for at least five years or if you have obtained a Settlement Permit.

So you want your kiddies to follow you to Germany? Do you really have enough room for them in your apartment? Do you and your spouse have sole right of custody and care? Oh, you only have a temporary visa? Sorry, that does not work to have your dependants follow you. But once you have a job to maintain them all then nothing should hinder their entry.

The most outstanding change for (especially permanent) residency is integration. The previous statute made no mention of the word “integration”. This not only emphasizes a prominent wish of the German government but also places a demand on the foreigner to integrate into German society, and for the German government to promote this.

Integration not only means language courses but also courses on history, culture, and legal procedures. In other words, you will have to learn that Germans were never germs but once a wild tribe in what is now Central Europe, that a Berliner is not always a Berliner but sometimes a Pfannkuchen , how Germans cheat (the Finanzamt ) and not get caught. Such courses will be organized by the government and are mandatory for Settlement Permission. These courses are really important! This can have negative effects on renewal of your residence permit if you are obligated to participate in one and failed to visit.. Be aware, the Foreigners Authority will be informed if you constantly miss classes.

Who has to visit an integration course? Those who cannot communicate at a basic level and have received a residence permit for employment reasons for the first time. Otherwise if you have special integration needs. What that means will have to be clarified one day in court.

You are entitled to visit an integration course if you received a Residence Permit for the first time for employment purposes, or for the purpose of subsequent immigration by dependents.

III. The Situation for Business People

The German economy desperately needs more business! The requirements to enter to set up a business vary and are not always easy. (sentence omitted) To obtain permission to live and work here you must show three things: 1) there is a superior economical interest or special regional need for your business; 2) your activity will have positive results for the economy; and 3) financing of your venture is secured by either equity or credit guarantees. If any one of these three requirements is not fulfilled then do not expect to receive a permit.

The path with red carpet treatment is the legal assumption that you meet all three criteria, provided that you can show that you will be investing one million Euros and immediately wanting to hire at least ten persons. For most persons this sounds extreme. The red carpet treatment will be to receive immediately permanent residency for the business person and his or her family (Settlement Permission). This is a fantastic achievement.

Not to meet the one million € requirement does mean this is the end of the story. You will then have to present a detailed business plan showing who you are, what you want to do, where your money will be coming from and going to, who your customers are, etc. Practically seen, if you show that you are moving a running business to Germany you will be welcomed. If you will only be able to show that you will hardly be making it then forget the idea of venturing into Germany. The most important part of your application will be the business plan! This plan will not be studied by the Foreigners Authority but the Commerce Department of the state you are planning to enter. If you wish to obtain professional help, I can help acquire a 40% subsidy from the German government for consultations on your business plan. How to improve chances of obtaining permission? Realistically show that you will be soon hiring persons, requiring services from other enterprises, buying a lot of goods and especially paying taxes.

In which field would it be good to open a business? This is a very good question. Each case will be individually evaluated. The general rule is simple: the greater the need for tax paying businesses the more likely to obtain a residence permit. But do not forget that you will have to cut through the red tape! An example: Persons older than 45 must show that they have sufficient coverage for old-age pension. It therefore might be a good idea to get professional advice.

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This article has been provided by our partner Rechtsanwalt Alexander Baron von Engelhardt , legal expert for foreigners in Germany. For further information, go to www.vonengelhardt.com .

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