The immigration of self-employed persons is basically permanent. However, in order to enjoy the permanent right of residence - the so-called “Niederlassungserlaubnis”- the entrepreneur must be able to prove to the competent authorities, among other things, that he or she has successfully realised the planned activity.

But when can one actually assume that the business idea has been successfully realised?

In its decision of 22.10.2020 (17 B 1148/20), the Münster Higher Administrative Court (Oberverwaltungsgericht Münster) stated that it cannot be assumed that the business idea has been successfully realised if the applicant already lacks 

  • the concrete information about the expertise, 
  • the respective documentation and 
  • the public - legal approvals and permits.

In the specific case, the business purpose was as follows when it was founded:

"Export and import of goods of all kinds, the establishment and operation of hotel and accommodation facilities, the development of technical processes as well as the manufacture and distribution of oil products of any kind for machines, internal combustion engines and similar technology".

However, when applying for a permanent residence permit, the applicant stated that he had earned his living by transporting cattle over long distances from Lower Saxony to Syria.

Not only that this activity was in no way evident either from the corporate purpose mentioned at the beginning or from the company`s expansion. 

Furthermore, the applicant was not able to present a coherent, revised business concept concerning the export of cattle. The entrepreneur also failed to convince the court by plausibly explaining the origin of the animals, the logistical process of the export business and the compliance with the respective legal provisions. Finally, there was also a lack of any evidence, such as sufficiently meaningful purchase contracts.

For these reasons, the applicant would not only be denied a permanent residence permit, but also the extension of the temporary residence permit. No positive prognosis decision in favour of the applicant could be established.

Already at the beginning of taking up business in Germany, the investing entrepreneurs must therefore be aware that they must be able to (re)present their business idea in a plausible manner for each renewal of the residence title, but especially for the procedure to obtain the permanent residence permit.

However, according to the administrative regulations, it must be taken into account that due to the special features of entrepreneurial activity, greater fluctuations in income are conceivable for entrepreneurs than for employees.

By the way:

The third-country national entrepreneur is not entitled to the (first-time) granting of a residence permit for the purpose of self-employment. 

Rather, the authority must take the following criteria into account in its discretionary decision:

  • Viability of the underlying business idea
  • Entrepreneurial experience of the foreigner
  • Amount of the capital investment
  • Effects on the employment and training situation
  • Contribution to innovation and research

If the third-country national intends to start a business as a freelancer or as a graduate of a German university, privileges may apply under certain circumstances. The above-mentioned criteria do not necessarily have to be met in these cases.

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