Is it possible to obtain a self-employment visa for real estate and asset management?

A renovated apartment in an old building in Berlin-Mitte, a newly founded limited liability company, plus solid rental income: For many wealthy buyers from the USA , For those living in Great Britain or Canada, the path to a German residence permit seems clear. Anyone who invests, starts a business, and generates revenue should, one would assume, be considered an entrepreneur. This is precisely where one of the most frequent misunderstandings we encounter in our consultations lies. Owning real estate or managing assets does not automatically make someone self-employed under immigration law. We explain when a real estate company meets the requirements of Section 21 of the German Residence Act (AufenthG) and why mere asset management is generally insufficient.

Is it possible to obtain a self-employment visa with a real estate company?

Generally, yes. Section 21 Paragraph 1 of the Residence Act permits the granting of a A residence permit for self-employment is granted if there is an economic interest or regional need, the activity is expected to have a positive impact on the economy, and financing is secured. The law does not exclude any sector – including the real estate industry.

The The Berlin State Office for Immigration ( LEA ) has clearly formulated its position on this matter in its procedural guidelines (VAB A.21.0): “The managing director of a real estate company can also fulfill the legal requirements of Section 21 of the Residence Act. However, the mere possession or acquisition of real estate does not constitute the exercise of a self-employed activity.” This establishes the basic rule. What matters is not the assets, but the entrepreneurial activity.

What constitutes a "real estate company" under immigration law?

The VAB (Association of German Residence Permits) do not define the term. However, the systematic structure and purpose of Section 21 of the Residence Act (AufenthG) make clear what is important. It refers to a company that operates economically on the free market, provides services to third parties, and thereby contributes to value creation in Germany. Those who only... Managing an apartment or a rental property does not meet this requirement.

Typical activities that can exceed this threshold include project development, property development, commercial renovation and sale of properties, real estate brokerage, and property management for third-party owners. For some of these activities, a business license according to Section 34c of the German Trade Regulation Act (GewO) is also required. This should be planned for early on, as the authorities regularly request it.

As a guideline for the distinction, tax law jurisprudence on commercial real estate trading can serve. According to the so-called three-property rule of the Federal Fiscal Court, anyone who acquires and resells more than three properties within five years is generally considered to be engaged in commercial activity. This is not binding for residency law. However, it illustrates what else should be considered. Immigration authorities and chambers of commerce pay attention to sustainability, market participation, and activities that go beyond simply holding assets.

Why is asset management not considered self-employment?

Here, the expert bodies involved in the proceedings pursuant to Section 21 Paragraph 1 Sentence 3 of the Residence Act (AufenthG) draw a clear line. The Hamburg Chamber of Commerce, in its statements, clearly bases its position on Section 14 of the German Fiscal Code (AO) . According to Section 14 Sentence 1 AO, a commercial business operation is an independent, ongoing activity that generates income or other economic benefits and goes beyond the scope of mere asset management . Asset management, according to Section 14 Sentence 3 AO, generally exists when assets are merely used, for example, by investing capital assets to earn interest or by renting or leasing real estate.

In practical terms, this means: Renting out your own Holding apartments , a stock portfolio, or managing investments through a pure holding company remains asset management. This applies even if the sums involved are substantial. A family office that exclusively manages its own assets is not considered asset management. Providing services to family members also falls into this category. The situation can be different if a multi-family office provides services to external clients, employs staff, and operates in the market. However, managing external financial portfolios generally requires authorization from BaFin (the German Federal Financial Supervisory Authority). This hurdle is significant in terms of both time and regulatory requirements.

Doesn't a limited liability company (GmbH) automatically make asset management a business?

We hear this question often, and the concern is understandable. For tax purposes, according to Section 8 Paragraph 2 of the German Corporation Tax Act (KStG), the income of a GmbH (limited liability company) is always considered income from a trade or business, and according to Section 2 Paragraph 2 of the German Trade Tax Act (GewStG), its activities are always and fully considered a trade or business. Therefore, even an asset-managing GmbH is considered a "trade" for tax purposes.

This tax fiction does not, however, extend to residency rights . LEA and the participating chambers focus on the economic substance of the activity, not the legal form. A limited liability company (GmbH) whose sole purpose is holding and renting out its own property remains, under immigration law, an asset management company, and neither commercial register entry nor business registration changes that. This applies particularly to clients from the In the USA , where an LLC is commonplace for holding real estate, this difference is often underestimated.

How to check LEA and chambers handle applications in practice?

From hundreds of cases, we know the points at which such applications fail. The authorities scrutinize the business plan very closely, focusing on the source of revenue. If the projected income consists primarily of rent from the applicant's own properties, a critical inquiry or a negative statement from the chamber almost always follows. Revenue from services provided to third parties, such as brokerage commissions, management fees, or development margins, is more convincing.

In addition, there are indicators that aren't on any checklist but are regularly queried. These include the company's own business premises, planned workspaces, existing customer relationships or letters of intent, relevant industry experience, and the necessary permits. Furthermore, the approach varies regionally: some authorities accept a mixed model of in-house business and third-party business if the third-party business is clearly the primary focus. Others are hesitant even with a discernible in-house business. The typical consequence of an unclearly formulated plan isn't a quick rejection, but rather a delay of several months due to additional requests for information.

What alternatives do wealthy foreigners have?

Many affected individuals choose one of three paths. They wait and hope for a later opportunity, they submit the application themselves with a generic business plan, or they rely on standard information that doesn't differentiate between tax and immigration law. All three paths carry risks. A rejection based on "mere asset management" once granted will bar any subsequent application.

A more sensible approach is to make an honest decision at the outset. If genuine entrepreneurial activity is planned, we structure the application so that the focus is clearly on market-oriented business. For US citizens, Section 21 Paragraph 2 of the German Residence Act (AufenthG) in conjunction with the German- American Treaty of Friendship, Commerce and Navigation of 1954 can also offer some relief. However, this regulation also requires actual entrepreneurial activity. Those who primarily intend to live off their own assets should not construct a business application. In that case, a different approach is more likely. A residence permit pursuant to Section 7 Paragraph 1 Sentence 3 of the Residence Act may be considered, which can be granted in justified cases for purposes of residence not explicitly regulated. It is at the discretion of the authority and requires a complete history of residence. secure livelihood and a complete Health insurance , however, offers an honest and reliable approach. Also the Family can be involved in both scenarios.

Conclusion

A self-employment visa under Section 21 of the German Residence Act (AufenthG) is possible for real estate companies, but only if the company operates on the open market and provides services to third parties. According to Berlin administrative practice, the mere ownership or acquisition of real estate is expressly insufficient. Asset management as defined in Section 14 of the German Fiscal Code (AO) is also excluded, even if it is organized as a limited liability company (GmbH). Anyone wishing to invest and live in Germany should therefore clarify early on whether their project is entrepreneurial or asset management and choose the appropriate residency pathway accordingly. We support high-net-worth investors, founders, and their families in making this distinction clearly from the outset.