Investment in Germany
Germany offers several investment pathways, including company registration, property purchase, startups, business acquisition, and entrepreneurship. Each method requires a different level of financial capacity, depending on the type of investment.
To succeed, you’ll need a solid business plan, innovative ideas, and relevant experience in your field. Professional guidance is crucial—consulting with experts can help you navigate the process smoothly.
For personalized advice about immigration to Germany, contact Malekpour Institute for a free consultation, or leave your questions in the comments for a quick response.
Germany for investment
Germany, officially the Federal Republic of Germany, is a developed European nation with 16 states and a population of around 82 million. The capital is Berlin, and major cities include Munich, Frankfurt, and Hamburg. About 92% of the population are German, with 7.7% being foreign nationals.
Bordered by countries like France, Austria, Poland, and Denmark, Germany is centrally located in Europe. With its strong economy, political stability, and strategic location, it offers excellent investment and residency opportunities.
- It is the most important and economically powerful country in the Eurozone.
- A member of the United Nations, the European Union, and NATO
- The country is the fourth largest economy in the world in terms of GDP.
- It has a high social welfare and standard of living, a free education system, and a strong health system.
- It is home to 28 major brands and companies.
- Owning famous automobile companies such as Porsche, Mercedes-Benz, and BMW.
Investment Conditions in Germany
The conditions for immigrating to Germany through investment is somewhat different from that of other European countries. If you are a prospective immigrant to Germany through investment, we recommend that you carefully study the investment immigration conditions and then make decisions based on complete awareness. General conditions for investment in Germany can include the following points.
- Provide a certificate of no criminal record
- Be at least 18 years old
- Proof of financial means
- Employ at least 5 German citizens
- Provide a strong business plan
- Have sufficient business experience
Residency in Germany through Investment
Immigration to Germany through investment is one of the pathways that leads to obtaining residency in Germany. There are various methods of immigration to Germany through investment. The following discusses the different methods of immigration to Germany via investment.
Starting a Business
Residency through investment in Germany can only be obtained by receiving the relevant trade licenses.
Company Registration
There are different types of companies such as limited liability companies and partnerships, and you need to have a minimum capital of €25,000 to register a company.
Investment through Establishing Branches and Representative Offices
This method of residency through investment in Germany is suitable for applicants who have a business or factory in their country and consists of two types: establishing independent and dependent branches.
Types of Investment in Germany
Investing in Germany can be approached through various means, each of which can have different conditions based on the applicant’s circumstances. The best ways to invest in Germany are as follows:
- Property purchase
- Company registration
- Startup
- Business purchase
- Entrepreneurship
- Government bonds purchase
- Financial assets
- Franchisor
- Stock purchase
Investment Visa in Germany through Property Purchase
Purchasing property can certainly be considered the best investment in Germany because it is one of the lowest-risk methods of investment; however, you should know that this purchase alone does not grant residency or a German passport. Additionally, you should consider the property prices in Germany relative to your investment amount.
Unless it is part of an approved business plan, such as buying and selling properties or construction projects. The profitability of this type of investment has been significant in recent years. There are six main reasons to introduce buying property in Germany as the best investment opportunity.
- Property prices in Germany are much lower than in other European countries.
- The real estate market, especially for apartments ranging from 57 to 140 square meters, has become extremely limited.
- Population changes in Germany have resulted in a high demand for properties due to population growth.
- Financing in Germany is generally much more profitable than in any other country in the world. With market loans ranging from 1.15 to 2.50 percent for classic rental apartments or home purchases, you pay less than your income.
- No other country in the world provides the same lucrative opportunity for tax deduction. After buying property in Germany, taxes are very low. You can even reduce this rate by 2% to 80% a year (as a form of depreciation) for 5 to 12 years after purchasing an apartment.
- The real and unique context for classifying purchasing property in Germany as the best investment method is that, according to the latest studies from October 2018, there was a need for an additional 375,000 to 450,000 apartments that should have been built in 2018. Therefore, the market will become even more limited in the coming years. Past issues and shortages, combined with the 100 out of 1,000 refugees who go to Germany each year (reported by the government between 950,000 and 1,300,000 in 2016), have significantly increased the demand for housing.
Investment Visa in Germany through Company Registration
Investment in Germany can lead to residency if done through setting up a business or registering a company. You can either launch a new company or establish a branch of an existing business. To succeed, a strong business plan is essential for approval.
The cost of company registration in Germany ranges from €1,000 to €4,000, with an initial capital requirement of €25,000 to €30,000.
| Applicant | Requirements |
|---|---|
| Age | 18 to 45 years old |
| German Language Skills | Not mandatory |
| Work Experience | Must be related to the business plan and company |
| Cost | €3,000 to €4,000 |
| Business Plan | Required |
| Initial Capital | €25,000 to €30,000 |
Not all businesses qualify for residency—your investment must contribute positively to the German economy. Additionally, a local bank account is required. Malekpour Institute provides expert support for investment in Germany, including legal guidance and bank account solutions. For safe and effective investment in Germany, consult the institute’s specialists.
Types of Companies in Germany
In Germany, there are various types of corporate structures for investors and entrepreneurs, each with its features. Some of the most important types of companies in Germany include:
- GmbH (Gesellschaft mit beschränkter Haftung) – Limited liability company, the most popular type of company for small and medium-sized businesses with a minimum capital of 25,000 euros.
- UG (Unternehmergesellschaft) – Small limited liability company, known as a simplified version of the GmbH with a lower initial capital (minimum 1 euro).
- AG (Aktiengesellschaft) – Public limited liability company suitable for large businesses with the possibility of offering shares on the stock exchange and with a minimum initial capital of 50,000 euros.
- OHG (Offene Handelsgesellschaft) – General partnership formed between two or more partners with unlimited liability.
- KG (Kommanditgesellschaft) – Mixed non-stock company consisting of one partner with unlimited liability and other partners with limited liability.
- GbR (Gesellschaft bürgerlichen Rechts) – Civil partnership formed between two or more individuals without the need for initial capital and more suitable for freelancers and small businesses.
- GmbH & Co. KG – A combination of GmbH and KG, where a limited liability company (GmbH) operates as a general partner in a KG company.
Investment Visa through Startups
German startups that aim to create innovative solutions or offer new products to assist marketing are always looking for new ideas and plans. The most popular German startups are in the fields of information technology and food-related markets.
To obtain a Startup Visa in Germany, it is essential to understand that financing these startups is a crucial aspect, and thus, foreign and international investors often invest their capital in startups with the hope of significant returns. Therefore, investing in established startups is one of the pathways for immigration through investment to Germany.
Investment Visa through Purchasing Business in Germany
Buying a Business in Germany is a faster and more practical investment option compared to starting a new company. Since it does not require a licensing process, investors can take over an existing, already-operational business and reach profitability sooner. The business transfer is done through a notary, where ownership and share documents are legally updated.
The buyer needs valid ID and verified company documents. One key advantage is that buying a business in Germany can be done remotely through a lawyer—no travel required. This makes it one of the best strategies for investment in Germany.
- Business purchase price
- Notary fees are approximately €1,200 for GmbH and €800 for UG
- Change registration costs €60 to €300
- Business registration costs €15 to €55
Best Investment in Germany through Entrepreneurship
For obtaining a Entrepreneur Visa in Germany, you can proceed in two ways. In the first method, you can obtain residency in Germany through other means, such as studying, working, or marriage, and subsequently set up a business through entrepreneurship.
If your choice as a foreigner for the best investment in Germany that leads to immigration is entrepreneurship, you must ensure and prove the following items for your plan to be approved in the German Chamber of Commerce.
- Provide a strong business plan
- Profitability and contribution to the economy
- Job creation
- Adequate capital for start-up
- Salary provision for German employees
Investment in Germany through Government Bonds
Some investors seek to diversify their investments by purchasing shares and bonds from other nations, including Germany. The federal government in Germany issues various bonds annually, which are fully supported by the German government. Germany, like many European countries, uses the euro, and the German bonds convert to that currency.
- German bonds can be purchased through licensed investment brokers.
- This method cannot lead to obtaining residency.
- Bonds are issued for terms ranging from three months to 30 years.
- Longer-term bonds have higher yields.
To buy bonds, you must follow the procedure below. This method can be considered one of the best investments in Germany in terms of profitability and comprehensive support from the federal government.
- Choose different types of securities
- Write a check to the broker
- Instruct the broker to make the purchase
- Receive a transaction receipt
- Set up an online brokerage account
- Monitor your assets daily.
Investment in Germany through Franchising
Buying franchises is one of the ways to invest in Germany that can lead to obtaining resident status in this country. To purchase a franchise, the applicant must fulfill the following criteria.
- Have an average income of $60,000 or more
- Have a capital of $250,000 or more
- Company management experience
- Brand experience
- Professional skills and passion and motivation
To purchase a franchise, such as Pizza Hut, the applicant should speak the language to manage the employees. A franchise like Pizza Hut also automatically hires staff and provides you with training classes, systems, and decoration arrangements. Such franchises can yield good profits for investors.
Investment in Germany through Purchasing Shares
To purchase shares in Germany, the applicant needs a brokerage account and capital; if these are available, they can purchase their shares from the German stock portfolio via an ETF. If the designated broker allows access to ETFs for the applicant, they can perform direct buying and selling of shares.
Purchasing shares can vary in type, and buying stocks from German companies is considered a method of investment that can lead to a German investment visa and ultimately to immigration through investment in Germany.
- Brokerage Account
- Capital
- Exchange Fund ETF
Best Investments in Germany
To start a business in Germany and obtain residency through investment, applicants can choose various types of businesses and trades. Below are some of the best options that can be chosen for business setup or buying a business in Germany:
Biotechnology Business
Germany is significantly promoting and developing its biotechnology sector. The government has invested hundreds of millions of dollars in infrastructure, research budgets, and hiring top international scientists. However, entering this industry requires a strong background knowledge and substantial capital.
Fast Food Restaurants
Franchises in Germany have excellent sales. This means that investors can genuinely earn significant profit through businesses like barbeque, pizza, etc. This type of business requires relatively low investment capital and does not need an official academic certification. Hence, this is one of the fields you can enter easily.
Transport Business
Transportation is one of the essentials almost necessary in any economy, which is why demand for transportation services is generally high everywhere. As a foreign investor in Germany, you might establish a transport business whose scope will depend on your investment capacity. If you have limited capital, start a taxi service that transports people on local routes. Over time, you can establish an intercity or interstate transport service.
Food Industry
The food industry is likely the best business to start not only in Germany but also worldwide since there is a global demand for food, which is a fundamental human necessity. Hence, if you are looking to invest in business opportunities in Germany, the food industry is one of the most significant options.
Manufacturing and Retail
The automotive industry is the largest manufacturing sector in Germany, accounting for a sizable share of total industrial production. Despite this high level of production, there are ample opportunities for businesses selling electronic products to consumers. With a little investment, you can focus on a narrow range of automobile production, but depending on your capital, it can also be broader.
Online Marketing and Advertising
With the increasing need for businesses to attract customers and sell their offerings through the internet, demand for professionals and businesses that provide online marketing services is rising. These services include everything from copywriting to search engine optimization.
If you are an experienced copywriter, or a website designer and developer, or a search engine optimization expert, or a social media marketing specialist, etc., you can achieve remarkable success in this field.
Minimum Investment for Residency in Germany
In response to the question of how much the minimum investment for residency in Germany is, it can be said that investment in Germany occurs through various types, each with minimum amounts for investment. Company registration is one of the least expensive types of investment in this country, which, if done with a minimum amount of €25,000, can lead to obtaining a visa and residing in Germany through investment.
However, it should be kept in mind that this amount is only the initial cost, and there will be other expenses that the applicant needs to consider beyond this amount to undertake investment in Germany and immigration through this process.
- Office rent
- One year’s salary of employees
- Equipment purchase cost
- Advertising
Taxes in Germany for Foreign Investors
In Germany, there are various taxes on different financial actions. Investing in various countries is subject to income tax. Applicants wishing to immigrate to Germany through investment can decide by considering the tax rates in this country. Income from investments in Germany is subject to a 25% tax rate, and this tax must also consider additional solidarity costs for investors.
Source: German Tax Office: https://www.bzst.de/
Possibility of Obtaining Loans for Investment in Germany
Investment in Germany can come with the advantage of obtaining loans. Investors can use public subsidized loans for this purpose. Public subsidized loans are provided at interest rates below the current market value. These types of loans are granted by state and organized banks. Another type of loan available for investment in Germany is for investors looking to purchase property in the country. These investors can avail of related loans upon purchasing property.
Required Documents for Investment in Germany
To immigrate to Germany through investment, depending on the type of investment or business purchase, you will need to provide documents that generally include the following:
- Personal and identity information
- Company registration certificate
- Valid passport with more than three months validity
- Copy of passport
- Health insurance
- Pay slip for the last three months or presentation of an employment contract
- Proof of financial means
- Provision of marriage certificate (if married), birth certificate of children (if there are children)
- and death certificate of spouse (if the applicant’s spouse is not alive)
- Quarterly bank account statement
- Provision of travel plan
- Determining place of residence
- Two recent photos
- Visa fee (60 euros)
- Certificate of ownership of the place of employment or presentation of property rental documents
- A valid invitation letter from German business partners
- Invitation letter from the company if investing in company registration
Best Investment Options in Germany
Investment methods in Germany are quite diverse, and based on the investor’s capital, a decision can be made about what kind of investment path to select. Since Germany has one of the largest and most advanced economies globally, many investors from around the world are interested in investing in this country. In this section, we will outline the investment methods in Germany.
Establishing or Buying a Company in Germany
Germany has a large domestic market and a skilled and specialized workforce that can provide a favorable environment for starting or buying a company. Germany also offers access to the European Union market and a supportive government for businesses.
Purchasing Shares of German Companies
German companies are leading in many industries and can offer high profitability to their shareholders. Some well-known German companies include BMW, Siemens, Volkswagen, SAP, and Deutsche Bank.
Investing in Mutual Funds
Mutual funds are a suitable method of diversifying an investment portfolio and reducing risk. Many mutual funds in Germany focus on investing in Germany’s stock indexes, European indexes, or global indexes.
Purchasing Real Estate
The real estate market in Germany is stable and growing and can yield high returns for investors. Some of the attractive areas for property purchases include Berlin, Munich, Hamburg, Frankfurt, and Cologne.
Investment Costs in Germany
Investment costs in Germany depend on the type of business and the size of the project. For example, if you intend to purchase shares of a German company, you should also consider all expenses related to the German company, lawyers, and consultants. These costs can vary from a few thousand to several hundred thousand euros. If you plan to invest by purchasing property in Germany, you should also consider purchasing costs, transfer fees, renovations, taxes, and insurance premiums.
All of these costs can range from 10,000 to several million euros. In general, it is advisable that if you intend to invest in Germany, conduct thorough investigations of the laws, regulations, and conditions for investment in this country and do not overlook the assistance of qualified specialists and consultants in this field.
Best Cities in Germany for Investment
Investment costs in Germany will vary by city. In this section, we will discuss the best cities in Germany for investment and the related investment costs.
Berlin
Berlin, as the capital of Germany, is one of the largest cities in the country and has always shown an upward economic trend. Given Berlin’s favorable location and large population, it can naturally be considered a suitable city for investment. In recent years, this city has been considered an excellent option for foreign investors. As a result, capital growth in this city has surpassed that of other parts of Germany.
Munich
The city of Munich is one of the largest cities in Germany, after Berlin, and serves as the capital of Bavaria, recognized as an industrial and international city in the global community. Munich’s geographical location and recognition as one of the academic cities have always made it a good choice for investment in Germany. As you know, this city has also claimed the highest stock prices in recent years.
Hamburg
The city of Hamburg is known for its infrastructure and strong economic status, and it has always been recognized as a bustling hub for Europe. In this city, even having an apartment or a house can lead to a profitable and secure investment.
Advantages and Disadvantages of Investing in Germany
Here is a table of the advantages and disadvantages of investing in Germany.
| Aspect | Advantages | Disadvantages |
|---|---|---|
| Economic Stability | Germany has a strong and stable economy. | Slow economic growth in the Eurozone can affect Germany’s performance. |
| Infrastructure | Developed infrastructure, including a modern transport network. | Some regions may face infrastructure challenges. |
| Skilled Workforce | Highly skilled and educated labor force. | Labor costs can be relatively high compared to some countries. |
| Innovation | Strong focus on R&D, fostering innovation. | Bureaucratic barriers may slow down innovation processes. |
| Export-Oriented | Major exporter with access to global markets. | Export dependency makes the economy vulnerable to global trends. |
| Legal Framework | Transparent legal system and strong property rights protection. | Complex bureaucracy and regulatory processes may pose challenges. |
| Strategic Location | Strategic position in Europe facilitates trade and business connections. | Language barriers may arise, especially in smaller businesses. |
| Energy Transition | Commitment to renewable energy and sustainability (Energiewende). | Transition costs and occasional energy supply challenges. |
| Quality of Life | High quality of life, attractive to skilled professionals and immigrants. | Cost of living can be high in cities like Munich or Frankfurt. |
| Political Stability | Stable political environment with commitment to the EU. | Political uncertainties and changes may impact business. |
| Financial Hub | Frankfurt is a leading global financial center offering financial services. | Intense competition in the financial sector. |
It is essential to note that the investment outlook can change, and individual circumstances may differ. Conducting thorough research and consulting with financial professionals before making any investment decision is advisable.
Investment Standards in Germany
Before choosing the best investment in Germany, it’s crucial to evaluate key investment standards such as the country’s political, economic, and judicial environment. A stable government, strong economy, and fair legal system are vital for securing investor rights and ensuring profitability. Germany offers all three—political stability, a sound judiciary, and one of the world’s most advanced economies. These factors make Germany a top destination for safe and profitable investment.
Corruption Control Rate in Germany
This indicator reflects the involvement of the government and individuals associated with government members in matters of the state for personal gain. The range of this factor is from -2.5 to +2.5. The more positive the number, the healthier the judiciary system of that country. In the chart below, you will see the trend of corruption control in Germany.
Risk of Expropriating Assets in Germany
The risk of asset expropriation is defined on a scale from 1 to 7, and the smaller this number, the higher the security of foreign investment. This number indicates how the judiciary reacts when it comes to depriving the investor of their assets through law changes or political conditions. This rate is visible in the chart below.
Economic Indicators Impacting Germany
To choose the best investment in Germany, it is necessary to examine various economic aspects. There are many important factors influencing the economy of Germany, but elements like gross domestic product, inflation rate, bank interest, etc., are particularly relevant for foreign investors and selecting the best investment in Germany. The following will provide a detailed examination of these indicators.
Gross Domestic Product in Germany
GDP growth in Germany is a primary indicator showing the country’s economic growth levels. Generally, this indicator varies from year to year. You can see the trend of this indicator in the chart below.
Tax Rates in Germany
Tax rates are one of the factors that are significant for individuals. The chart below reflects corporate income tax rates in Germany.
Steps to Obtain Residency through Investment in Germany
To obtain residency in Germany through investment, you must follow the steps below:
- Translation of official documents related to the investment method
- Sending documents for approval to the German embassy
- Sending approved documents and a justification plan to the desired lawyer in Germany
- After these items are approved by the registration office, an economic activity permit will be issued.
- Application for residence through an investment permit
Renewing Residency in Germany through Investment
If the applicant complies with the following criteria, they can renew their investment residency in Germany after the residency period expires.
- Pay your annual tax on time without delay.
- Proof of ability to pay your employees’ salaries and insurance for the next year.
- Proof of profitability of the business set up in Germany
- Proof of correctness of work according to the submitted business plan
Permanent Residency in Germany through Investment
Obtaining permanent residency in Germany depends on the type of investment, the profitability of the investment, and the amount of capital. The conditions for obtaining permanent residency may change; therefore, before taking any actions, it is necessary to consult with distinguished and experienced advisors to be fully informed of all aspects.
German Citizenship through Investment
If the applicant has obtained permanent residency, they can acquire German citizenship, which is possible after 8 years of residency in Germany and following the necessary steps. All these matters apply to all family members (spouse and children up to 18 years old).
Frequently Asked Questions regarding Investment in Germany
- What is the best way to invest in Germany?
One of the best methods for investment in Germany is to present a business plan for company registration.
- Can one obtain residency by purchasing property in Germany?
No.
- Can one obtain residency in Germany through investing in franchises?
No. To invest in franchises, you initially need to obtain residency through other methods.
- Can one obtain a German passport through investment?
Directly, you cannot obtain a German passport through investment, but after several years of residence in Germany, you can apply for a passport.
- What is the minimum investment required in Germany?
Company registration is considered the least expensive route, requiring a minimum investment of €25,000 for residency in Germany.
- What are the methods of investment in Germany?
Business acquisition, entrepreneurship, stock purchase, business creation, company registration, and property purchase are methods of investment in Germany.
- How does immigration to Germany through investment work?
Initially, to immigrate to Germany via investment, you need to choose your immigration path, prepare the required expenses and documents, and finally apply for a visa.
- What are the conditions to obtain an investment visa?
Having the required investment conditions, capital, and financial capacity are among the main conditions for obtaining a German investment visa.
- How long does it take to obtain an investment visa in Germany?
The duration of obtaining a German investment visa depends on the investment method, but it generally takes 7 to 10 months.
Conclusion:
Germany, as the fourth-largest economy in the world, offers excellent potential for investors. Whether your goal is profit, residency, or business ownership, investment in Germany can be tailored to your needs. From real estate—driven by population growth and attracting investors from Asia, Russia, and the U.S.—to entrepreneurship and self-employment, there are various paths available. However, some methods, like property investment, do not lead to residency.
To succeed in investment in Germany, especially through entrepreneurship, you need a strong business idea, the ability to hire local workers, and solid experience. For personalized advice and to explore the best investment options in Germany or across Europe, contact Malekpour Institute.
