Hiring a managing director for a work visa at your own GmbH: Is that possible?

In the current debate surrounding the skilled worker shortage and the digitalization of migration administration, a picture of total freedom and entrepreneurship is often painted. However, for highly qualified migrants who want to launch their businesses as managing directors in Germany, the legal reality is often paradoxical: the supposed "independence" of self-employment frequently turns into an obstacle course in the visa application process . While politicians invoke a welcoming culture, practice shows that obtaining a work visa for employees is generally viewed much more favorably and simply than a visa for the self-employed. We repeatedly observe that clients try to force their way into self-employment, but fail to recognize that this only leads them to more arduous bureaucratic hurdles.

The 50 percent hurdle: The boundary between work visa and bureaucratic complexity

To benefit from the advantages of a work visa, classification as an employee under Section 7 of the German Social Code, Book IV (SGB IV) is mandatory. The level of shareholding plays a crucial role in this classification. According to established case law of the Federal Social Court (BSG), a managing shareholder is only considered an employee if they hold less than 50% of the shares and do not possess a comprehensive blocking minority. A shareholding of less than 50% is therefore the legal prerequisite for even being able to apply for a work visa. Anyone exceeding this threshold loses their employee status and automatically falls into the category of self-employed individuals – with significant consequences for the complexity of the visa application process .

Why we view self-employment critically in the visa process

From the perspective of highly skilled international talent, time is the most valuable resource. However, obtaining a visa for self-employment under Section 21 of the German Residence Act (AufenthG) is subject to extremely high hurdles: applicants must demonstrate an overriding economic interest, specific regional needs, and secured financing. This process is often lengthy, and the outcome is uncertain. In contrast, a work visa (often in conjunction with an EU Blue Card) is significantly faster to obtain when employed as a managing director, with less discretion on the part of the authorities. We therefore strongly advocate the strategy of structuring the company in such a way as to establish dependent employment , as this represents the safest and most efficient path to a residence permit.

The trap of legal power: Why the statutes remain crucial

Although employment is advantageous, it must be legally sound. The Federal Employment Agency (BA) and the pension insurance provider carefully examine whether " de facto self-employment " exists despite a minority shareholding. For example, if you hold 25% of the shares but can still make all decisions independently due to special rights in the articles of association, the BA will reject the classification as dependent employment. This would also invalidate your work visa. It is therefore essential that the company's legal authority is genuinely limited. Contractual agreements in the employment contract alone are insufficient; the crucial factor is that you, as managing director, remain subject to instructions, which is typically the case with a shareholding of less than 50% and no blocking minority.

The status determination procedure as insurance for your visa

To have absolute certainty for the visa application , a status determination procedure according to Section 7a of the German Social Code, Book IV (SGB IV) , with the German Pension Insurance can be advisable. Even though this procedure is considered lengthy, it provides the official document confirming: "This managing director is an employee." With this status in place, the path to a work visa is clear. While we criticize the slowness of these processes, we see them as a necessary evil to avoid the significantly more complicated hurdle of a self-employed visa.

Conclusion: Strategic minority stake for maximum success

In summary, those seeking a quick and secure visa for Germany should choose a business structure that allows for employment as managing director . This necessarily requires a shareholding of less than 50% to be considered an employee under Section 7 of the German Social Code, Book IV (SGB IV). Self-employment should be avoided if possible due to the enormous bureaucratic complexity of the visa application process. Therefore, consciously opting for a minority stake is not a relinquishment of power, but rather a wise strategic decision for a secure future in Germany.

How we at VisaGuard can help you

As the law firm VisaGuard, we help you avoid legal pitfalls from the outset. We advise you on structuring your company shares to ensure you correctly comply with the critical threshold of less than 50%, thus creating the basis for a straightforward work visa. We review your articles of association and contracts for compliance with current Federal Social Court (BSG) case law and guide you through the entire visa application process. With our expertise, we ensure that your status as an employed managing director is recognized by all authorities, so nothing stands in the way of your quick start in Germany.

→ Book an appointment now and receive a response within 48 hours