Remote work for foreign employers: When does working from home in Germany become employment requiring a permit?

A legal commentary by lawyer Mirko Vorreuter, specialist lawyer for immigration law

1. Introduction

The world of work has fundamentally changed since the pandemic. More and more employees want to – or have to, for family or personal reasons – work from Germany, even though their employer is based abroad: the Indian software developer whose spouse is moving to Berlin; the American consultant who will be working from Frankfurt for her New York-based company; the Turkish sales representative who is relocating to Munich, even though his employer doesn't have a branch there. In my practice at VISAGUARD.Berlin , I now encounter this situation weekly – and it reveals one of the biggest, yet least discussed, loopholes in German immigration law.

Because however clear the starting point may seem – third-country nationals generally need a residence permit for any employment in Germany that entitles them to pursue that employment, Section 4a of the German Residence Act (AufenthG) – it is unclear whether and how this principle applies when the employer has no connection to Germany whatsoever. The law was clearly not written for this scenario. In this article, I will outline the current state of academic and practical debate, categorize cases, and decide the question according to my legal opinion.

2. The legal starting point

German immigration law does not link the requirement for a permit to the employer's nationality, but rather to the concept of "gainful employment". Section 2, paragraph 2 of the Residence Act defines gainful employment as "self-employment, employment within the meaning of Section 7 of Book Four of the Social Code, and employment as a civil servant." The reference to Section 7 of the German Social Code, Book IV (SGB IV) is crucial: According to this, employment is "non-self-employed work, in particular in an employment relationship" – a definition that refers neither to the employer's place of business nor to their registration in Germany, but solely to the actual performance of the work subject to instructions.

Furthermore, anyone who works as a third-country national without the appropriate permit is committing a serious offense: Section 95, paragraph 1a of the Residence Act criminalizes unauthorized employment. The requirement for a permit is therefore not merely an administrative formality, but a strictly enforced limit – which significantly increases the practical relevance of the following point of contention.

The real crux of the matter lies in Section 39, paragraph 2, sentence 1, number 3 of the German Residence Act (AufenthG) : The approval of the Federal Employment Agency for employment – the basis for virtually all employment permits such as the EU Blue Card ( Section 18g AufenthG ) or skilled worker permits ( Sections 18a, 18b AufenthG ) – requires that "a domestic employment relationship exists." The Federal Employment Agency specifies this in its Technical Instructions on the Residence Act and the Employment Ordinance, stipulating that an employer with a registered office or place of business in Germany is generally required. This is precisely where the scenario of "working from home for a purely foreign employer" typically fails from the outset.

3. The scientific debate: What exactly does the licensing requirement protect against?

The literature – insofar as it addresses this relatively new legal situation – is divided on how the concept of employment should be interpreted in the context of cross-border home office work. Essentially, three positions can be distinguished, each based on a different understanding of the protective purpose of the permit requirement.

• First view (territorial principle): The decisive factor is solely the physical location where the work is performed. Anyone working from within Germany is considered to be engaged in gainful employment "within Germany"—regardless of where their contractual partner is located. This view is based on the territorially neutral wording of Section 7 of the German Social Code, Book IV (SGB IV), and on the regulatory nature of immigration law: The state fundamentally wants to know and be able to control who is gainfully employed within its territory.

• Second view (market perspective): The purpose of the licensing requirement is primarily to protect the German labor market from displacement effects – as evidenced, among other things, by the priority review and the requirements for comparable working conditions in Section 39 Paragraph 2 of the Residence Act. If there is no domestic employer at all, the employee does not compete with domestic workers or apprenticeships in any way; a licensing requirement would therefore be pointless.

• Third view (differentiation according to duration/intensity): The mediating view is that only the permanent relocation of the main focus of activity to Germany requires a permit, while short-term, occasional work (the "workation") as a mere preliminary or secondary activity during an otherwise privately motivated stay remains harmless.

In my view, none of these three positions fully addresses the actual reason for the permit requirement: it serves two protective purposes simultaneously, which diverge in our specific case. Firstly, there is the protection of the labor market (there is little to argue against this in the case of a purely foreign employer). Secondly, there is the protection of employees in a broader sense: the German state has a legitimate interest in ensuring that anyone working permanently from its territory is subject to the minimum standards here – minimum wage, working time regulations, social security contributions, and tax obligations – and that this is verifiable. A residence permit with registered employment serves as a monitoring instrument for this purpose. Anyone who takes both purposes seriously cannot answer the question with a blanket yes or no, but must differentiate according to the specific circumstances of each case.

4. Why there is (still) no suitable residence permit

Even those who agree that a permit is required encounter a second, practically even more pressing problem: there is simply no residence permit that is tailored to this situation.

The specialist qualifications under Sections 18a, 18b, and 18g of the German Residence Act (AufenthG) regularly fail due to the aforementioned requirement of a "domestic employment relationship" in Section 39 Paragraph 2 Sentence 1 Number 3 of the German Residence Act. A qualification for self-employment under Section 18a, 18b, and 18g of the German Residence Act is therefore not possible. Section 21 of the Residence Act does not apply because the person concerned is not self-employed, but rather works for an employer under their instructions – moreover, Section 21 Paragraph 1 of the Residence Act requires an "economic interest or a regional need" for the Federal Republic, which is naturally unlikely in the case of work for a foreign company.

Does the catch-all provision of the Section 7, paragraph 1, sentence 3 of the German Residence Act (AufenthG) states that a residence permit may "also be granted for a purpose of residence not provided for by this Act." Here, I stand by my position expressed in the initial question: Sentence 4 of the same provision explicitly clarifies that such a fallback permit does not "permit the exercise of gainful employment," unless Section 4a, paragraph 1 of the Residence Act applies. Section 7, paragraph 1, sentence 3 of the Residence Act is therefore not a work permit, but rather structurally designed for residence purposes that do not involve gainful employment. Anyone who wants to use it to secure permanent home office arrangements for a foreign employer is arguing against the clear wording of the law.

The result is a genuine regulatory gap: the legislator simply failed to consider the scenario of "permanent home office for a purely foreign employer without a domestic presence." Even the most recent reforms—most recently the law on the further development of skilled worker immigration and the introduction of the opportunity card—have not closed this gap. From a legal policy perspective, improvements would be desirable here, for example, by clarifying that an employment relationship with an employer based abroad is equivalent to the requirements of Section 39 Paragraph 2 Sentence 1 Number 3 of the German Residence Act (AufenthG) if a payroll service provider or Employer of Record (EoR) based in Germany acts as the formal employer.

5. The special case of workation: enforcement deficit instead of legal certainty

For short-term stays – such as a four-week summer visit with family in Germany, during which emails are answered on the side – the question arises differently. Formally, the brevity of the activity does not change its legal classification as gainful employment within the meaning of Section 2 Paragraph 2 of the German Residence Act (AufenthG); the law does not recognize a general de minimis threshold, apart from narrowly defined exceptions such as the activities of business travelers that do not require approval. Section 16 of the Employment Ordinance or the one in § 30 BeschV regulates short-term employment stays – both of which are tailored to classic business appointments, not to regular home office work.

However, the situation is quite different in the enforcement practice of immigration authorities. From my experience as a lawyer, I can confirm that this highly specific situation is hardly ever monitored. It's a classic enforcement deficit – a formal permit requirement with virtually no enforcement. This is unsatisfactory from a rule-of-law perspective, but it doesn't change the continuing legal gray area that clients and employers find themselves in upon closer examination.

6. My view: A solution via case groups

A simple yes/no answer does not do justice to the complexity of the issues at hand. I therefore propose the following categorization, which is based on the intensity of the domestic connection and weighs both protective purposes – labor market protection and employee protection – against each other:

Category 1 – Short-term, non-predominant employment (up to approximately 90 days, stay for other reasons). Here, the purpose of the stay (family visit, vacation) outweighs any work performed on the side. The purpose of labor market protection is not affected; the purpose of employee protection recedes into the background due to the short duration. While a permit requirement formally remains, the practical risk is low given the described enforcement deficit – however, legal certainty is still lacking, which is why I expressly advise against actively promoting this "gray area solution" to clients.

Category 2 – Permanent relocation of the center of activity and life to Germany. Anyone who permanently relocates their habitual residence to Germany and works full-time for their foreign employer fulfills both protective purposes of the permit requirement – in this case, a residence permit with a work permit is mandatory. Since specialized work permits are not an option due to the lack of a domestic employment relationship, in practice the only remaining options are a permit that generally authorizes employment – regardless of the employment relationship (e.g., a settlement permit under Section 9 of the German Residence Act, a family reunification permit with a general work permit) or the contractual interposition of a domestic Employer of Record, which establishes a genuine domestic employment relationship and thus satisfies Section 39 Paragraph 2 Sentence 1 Number 3 of the German Residence Act.

Case Group 3 – Hybrid Situations. In cases of regular but not exclusive remote work (e.g., monthly travel between Germany and the employer's country of residence), it must be examined on a case-by-case basis where the center of one's life lies – similar to the distinction made in social security law for the A1 certificate and in posting law. The closer the case is to Case Group 2, the more likely a legal title is required.

7. Practical advice for clients

Based on my daily experience, I advise a generally cautious and conservative approach. The responsible case workers at immigration offices are usually not fully qualified lawyers, but rather administrative staff tasked with handling a large volume of cases and lacking in-depth knowledge of this peripheral issue. In practice, this leads to applications based on this unclear legal situation being rejected – not based on a sound legal assessment, but rather due to the authorities' uncertainty and risk aversion.

For clients, this means: Wherever possible, they should use a residence permit that already generally allows employment – for example, through family reunification or an existing permanent residence permit – instead of applying for a specialized skilled worker permit, which may be rejected under Section 39 Paragraph 2 Sentence 1 Number 3 of the German Residence Act. I only recommend creative workarounds with great caution; those who want to proceed legally will generally have to resort to the more complex, but viable, solution of using a domestic payroll/EoR service provider.

8. Conclusion

German immigration law offers no satisfactory solution for permanent home office arrangements for the benefit of a foreign employer. While the requirement for a permit exists in principle – the territorially neutral definition of employment in Section 2 Paragraph 2 of the Residence Act (AufenthG) in conjunction with Section 7 of the German Social Code, Book IV (SGB IV) leaves little doubt about this – a suitable legal basis is lacking, as the law consistently presupposes a domestic employment relationship. A blanket answer is insufficient; what is needed is the case-group solution proposed here, which distinguishes between short-term workations, permanent relocation of the main focus of work, and hybrid situations. Until the legislature amends the law, clients are advised to exercise the utmost caution – and to seek legal counsel early on, before their own interpretation of the law leads to an unpleasant surprise at the immigration office.

List of sources

Laws, regulations, guidelines

[1] Section 2 of the Residence Act – Definitions, gesetze-im-internet.de

[2] Section 4a of the Residence Act – Access to employment, gesetze-im-internet.de

[3] Section 7 of the Residence Act – Residence permit, gesetze-im-internet.de

[4] Section 9 of the Residence Act – Settlement permit, gesetze-im-internet.de

[5] Section 18a of the Residence Act – Employment of skilled workers with vocational training, gesetze-im-internet.de

[6] Section 18b of the Residence Act – Employment of skilled workers with academic training, gesetze-im-internet.de

[7] Section 18g of the Residence Act – EU Blue Card, gesetze-im-internet.de

[8] Section 21 of the Residence Act – Self-employment, gesetze-im-internet.de

[9] Section 39 of the Residence Act – Approval of the employment of foreigners by the Federal Employment Agency, gesetze-im-internet.de

[10] Section 95 of the Residence Act – Penal provisions, gesetze-im-internet.de

[11] Section 16 of the Employment Ordinance – Business travelers, gesetze-im-internet.de

[12] Section 30 of the Employment Ordinance – Employment stays without a residence permit, gesetze-im-internet.de

[13] Section 7 SGB IV – Definition of employment, gesetze-im-internet.de

Administrative regulations/instructions

[14] Federal Employment Agency, Technical Instructions on the Residence Act and the Employment Ordinance, available via GGUA Refugee Aid

[15] General Administrative Regulation on the Residence Act (AVwV-AufenthG) of the Federal Ministry of the Interior

Judgments

As far as can be seen, there is no published case law from a higher or supreme court on the situation discussed here. This underscores its character as an unresolved, academically disputed legal question.

About the author

Mirko Vorreuter, LL.B., Dipl.-Jur., is a lawyer and specialist in immigration law, as well as the founder and owner of VISAGUARD.Berlin . During his studies, he specialized in German residence and immigration law and has since handled and managed more than 1,000 visa and residence permit applications.

In addition to his legal practice, Mirko Vorreuter works as a specialist author and content creator in the field of German immigration law. Besides his legal training, he holds the academic degrees of Bachelor of Laws (LL.B.) and Diplom-Jurist (Dipl.-Jur.).

He is a member of Corporate Immigration Lawyers Germany (CILG), the Working Group on Migration Law in the German Bar Association (DAV) and the Republican Lawyers' Association (RAV).