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Germany's labor market: Immigration guidelines for employers and job seekers

May 20, 2024

Recent updates to Germany’s immigration laws have opened a world of opportunity for companies invested in building globally remote teams. Germany seeks skilled workers, particularly those in healthcare, and science, technology, engineering, and mathematics (STEM) to fill skills gaps in their labor force and fuel economic growth. As a result, the federal government has developed an international migration policy meant to bring non-German nationals into the labor market.

In this article, we’ll explore how immigrant workers from European Union (EU) countries and beyond can enter the German labor market.

Germany Represents the EU’s Largest Labor Market

Current estimates suggest Germany’s labor market ticks in at just over 45 million people. That makes it the largest labor market in the EU. Employers that recruit from within Germany enjoy a diverse talent pool ready to support both startups and established companies. Likewise, non-German migrant workers seeking employment in Germany are welcomed by a contemporary migration policy developed to attract and support skilled foreign workers.

Small and Medium-Sized Enterprises Underpin Germany’s Economy

The German economy has many well-known success stories, with major international brands like Volkswagen, Daimler, BASF, and Siemens calling the country home. But when it comes to the complete story of the German labor market, these commonly recognized enterprise corporations don’t even tell the half of it. Small and medium-sized enterprises (SMEs) employ 55.1 percent of Germany’s workforce.

Additionally, Germany is beginning to prioritize sustainable energy and decarbonization. As a result, startups and businesses looking to lead in renewable energy, clean technologies, and climate solutions may find a welcoming landscape.

Immigration Trends in Germany

Germany’s population peaked at 84.7 million in 2023, fueled primarily by new immigrants. During this period, immigration is estimated to have added 680,000 to 710,000 new residents. The trend is expected to persist with recent migration policy changes designed to attract and retain skilled workers from abroad.

Factors Driving Germany’s Appeal

Several factors make Germany alluring to international skilled workers:

  • Stability: Germany’s economy offers diverse job opportunities that support a high standard of living and community.
  • Open immigration policies: Recent reforms, like simplified language requirements for work visas, signal Germany’s commitment to welcoming newcomers.

Germany’s aging population and specific skill shortages in sectors like healthcare and technology have created a demand for international talent. This is the driving factor behind Germany’s continued refinement of its migration policy to attract skilled workers.

Germany’s Skilled Worker Shortage

Germany is facing a significant shortage of workers across various sectors, which is challenging for businesses seeking to maintain growth and innovation. While the country boasts a well-educated workforce, demographic shifts, including an aging population and low birth rates, have created a gap between the demand for skilled workers and the available domestic talent.

This shortage is particularly acute in STEM fields, healthcare, and skilled trades. The Institute for Employment Research (IAB) estimated a shortage of 381,000 skilled workers in 2022, with the number expected to rise to 2.4 million by 2035 if no action is taken.

The German federal government is taking a multifaceted approach to address this critical issue, combining significant changes to its immigration laws with targeted initiatives to attract and retain international talent. These include:

  • Chancenkarte (Opportunity Card): Introduced in 2024, this new points-based system allows skilled workers from non-EU countries to come to Germany to search for jobs.
  • The Skilled Immigration Act: Introduced in 2020, this law streamlines the process for qualified professionals to work in Germany, even if they don’t have a job offer beforehand.
  • EU Blue Card: This program offers a fast track to residency for highly qualified individuals from non-EU countries.
  • ICT Permit: The Intra-corporate transferee (ICT) permit allows companies outside the EU to transfer managers and specialists to their German branches for up to three years.

Additional opportunities include residency permits and job-seeker visas. You can learn more about these incentives — and more — on Make it in Germany. This government-run platform provides information and support to skilled workers interested in relocating to Germany.

Work Visa and Residence Permit Types

EU talent in Europe has unrestricted access to the German labor market. No visa or work permit is required, making entering the German labor market from other countries within the EU or European Economic Area (EEA) a seamless process. On the other hand, talent from outside the EU/EEA must navigate Germany’s visa system, which is specifically designed to attract skilled workers.

Opportunities for visas in Germany include:

Employer-Expedited Visas

Germany’s employer-sponsored visa program offers a simplified pathway to recruit international talent into the German labor market and ensures immigrant workers comply with immigration regulations. Rather than requiring companies to sponsor a visa, the program allows German employers to expedite the visa and residence permit process on behalf of their employees.

This support also makes it easier to provide ongoing support for visa renewals, employment changes, and other immigration-related updates. Large multinational corporations often have dedicated teams to help guide employees through the process of completing applications, gathering required documentation, and ensuring ongoing compliance — reducing the risk of legal issues.

Without the benefit of enterprise-level support, SMEs may find it easier to navigate visa processes with the help of a partner familiar with Germany’s migration policy.

EU Blue Card Program

Germany’s participation in the EU Blue Card program is a beacon for skilled professionals worldwide. This special residence permit offers a streamlined path for non-EU citizens with university degrees who want to live and work in Germany.

Eligibility:

  • Education: Applicants must have a German university degree or an equivalent recognized qualification from abroad.
  • Job offer: International employees must secure a job contract with a minimum gross annual salary of €45,300 (in 2024) or €41,042 for in-demand professions like STEM, healthcare, or IT. Recent graduates (within the last three years) may also qualify for the lower salary threshold.

Immigrant workers must apply for the EU Blue Card at the German embassy or consulate in their home country, then wait for approval from the relevant German authorities. In some cases, Federal Employment Agency approval may be required.

Ultimately, the EU Blue Card program offers recipients streamlined processing, potential for family reunification, and a pathway to permanent residency in as little as 21 months.

Germany’s Opportunity Card

Accessing top global talent can be challenging. Germany’s Opportunity Card (Chancenkarte) offers a unique solution. Unlike visas such as the EU Blue Card program, the Opportunity Card doesn’t require immigrant workers to have a job offer in hand. Talent who have received a degree or vocational training recognized in Germany are automatically eligible.

Alternatively, they can still qualify through a points-based system that assesses language skills, education, work experience, age, and ties to Germany. Businesses that wish to leverage this advantage can start by identifying the skills required to perform the job and then work with a partner to advertise the position globally — while highlighting the Opportunity Card.

ICT Permits

The ICT permit allows companies outside the EU to transfer managers and specialists to their German branches for up to three years. Eligible employees must have been employed with their company for at least six months before applying for the ICT permit.

Key requirements include:

  • A work contract or assignment letter detailing the transfer
  • Proof of professional qualifications
  • Application at a German embassy or consulate

Additionally, non-EU nationals with an ICT Card from another EU country can work in Germany for up to 90 days within a 180-day period. However, details must be submitted to the German Federal Office for Migration and Refugees.

Employers should thoroughly research all requirements and restrictions in advance to avoid delays, and ensure timely visa processing for their international workforce.

Job Seeker Visa

Designed for individuals with at least two years of vocational training recognized in Germany, the Job Seeker Visa allows a six-month stay to search for and secure employment. Upon receiving a job offer, transitioning to a long-term residence permit is seamless.

Recruiting skilled workers on Germany’s Job Seeker Visa offers several benefits, including:

  • Expanded talent pool: Access to a global network of skilled professionals beyond the EU, bringing diverse perspectives and expertise to your team.
  • Reduced recruitment costs: As the visa allowed prospective employees to look for work while in Germany, companies can be confident that the talent they recruit is actively seeking opportunities in Germany.

To be eligible for the Job Seeker Visa, candidates must:

  • Be a non-EU/EEA/Swiss citizen.
  • Have completed at least two years of recognized vocational training.
  • Demonstrate financial self-sufficiency during their stay.
  • Ideally, possess five years of relevant professional experience.

Through Job Seeker Visas, businesses can access the wealth of untapped talent added to Germany’s labor market.

Residence Permit for Skilled Workers

Germany welcomes qualified professionals from all backgrounds. Immigrant workers who have earned a university degree or completed two years of vocational training may qualify for a residence permit.

This streamlined pathway makes it easier for German employers to attract and retain global talent while offering skilled workers a clear path to living and working in Germany. Requirements for a resident permit include:

  • Recognized qualification: Prospective immigrant workers’ education or training must be officially recognized in Germany or their home country.
  • Job offer: Skilled workers need a concrete job offer before applying for their residence permit.
  • Long-term stay: Residence permits are typically granted for up to four years, with the possibility of permanent residency after three.

With exceptions for regulated professions, immigrant workers meeting the educational or vocational conditions for a residence permit may work in any qualified field, not just the one they trained in. Remember, regulations can change, so always check official sources for the latest information.

Working in Germany: Challenges and Considerations

There are plenty of job opportunities in Germany, but there are also some challenges that immigrant workers and employers looking for skilled international talent should consider.

Regulatory Landscape

Taxes and social security: Navigating tax and social security compliance across multiple countries can be complex. Partner with experts to ensure your company and employees meet all obligations in Germany and the employee’s home country.

Dynamic immigration policies: Stay abreast of Germany’s ever-evolving immigration regulations. Changes in eligibility criteria or documentation requirements can significantly impact visa processes and updates.

Work Authorization

Employment and labor law: Strict regulations, including the Hours of Work Act, Minimum Wage Act, and licensing requirements, govern how businesses provide fair and lawful work environments in Germany.

Right to work: The legal right to work in Germany is nuanced. Visa and residence schemes tend to have overlapping requirements, but each includes unique guidance that can impact how, where, and for how long immigrant employees can work.

Cultural and Practical Considerations

Language skills: While technical fluency might be a skilled worker’s priority, basic German proficiency can significantly enhance integration into the workplace and daily life throughout the country.

Qualification recognition: Some international qualifications might need official recognition or evaluation for equivalency in Germany. It’s also important to be mindful of potential processing times to ensure all qualifications are accepted throughout all application processes.

By proactively addressing these considerations, businesses can successfully navigate the complexities of hiring international talent and unlock the benefits of skilled workers throughout Germany.

EORs Help Make the Most of Global Labor Markets

Germany’s various visas, permits, and immigration regulations can be challenging to navigate. But business leaders don’t have to go it alone. As an Employer of Record (EOR), Remofirst helps businesses navigate visa processes, streamline payroll services, and provide healthcare to remote workers.

Book a demo today to learn how Remofirst can help your business hire in Germany — and more than 180 other countries.