GmbH shareholder in Germany

This article from Wise Business Group explains employment and Blue Card residency for a GmbH shareholder in Germany. We often face the question: “Can a shareholder be employed by their own company in Germany? If so, are there legal or residency restrictions, such as a Blue Card, to consider?”

This question is fundamental because it relates to three main areas:

1. Labor and employment law in Germany
2. Financial issues and how to pay salaries and profits
3. Residence rules for non-European citizens

Can a foreign GmbH shareholder work for his company in Germany?

GmbH shareholder in Germany, employment, and Blue Card residency

In the following, we will explain step-by-step the requirements for employment and obtaining a Blue Card residence permit for a GmbH shareholder:

1. Hiring a shareholder in a GmbH

A shareholder can be employed as an employee in the same GmbH, provided that:

• There must be a real employment contract.
• Tasks and working hours should be clear.
• The employee must comply with the CEO or the board of directors.

The job title does not have to fully match the education, but this does matter for residency applications.

2. Salaries versus dividends of the GmbH shareholder in Germany

A shareholder-employee’s salary, like that of any other employee, is the operating cost of the company. It has two results:

1. Fixed monthly salary (including income tax and social insurance)
2. Share of the annual profit after deducting the company’s expenses and taxes

As a result, the income of a shareholder who also works as an employee in the same company in Germany will be a combination of salary plus dividends.

3. Non-European shareholder of a GmbH and German Blue Card residency

The German Blue Card is granted when:

• The person has a relevant university degree.
• The annual salary must be at least €45,300 (or €41,041 for labor shortage occupations).

Shares restrictions

For Blue Card residency, there are restrictions on GmbH share ownership:

• If a shareholder has management control or a majority of shares in a GmbH, the German Immigration Office does not consider them to be a genuine employee.
• To obtain a German Blue Card, a shareholder should own no more than 25% of the company’s shares.
• Suppose an individual holds a significant share (more than 50% ownership) of a GmbH. In that case, the suitable pathway is to seek a German self-employment residence permit (Section 21 of the German Residence Act – §21 AufenthG).

Read more: Company registration and German Blue Card

✅ Conclusion

The requirements for employment and obtaining a Blue Card residence permit for a GmbH shareholder in Germany can be summarized as follows:

• A shareholder of a GmbH can become an employee of the same company and receive both a salary and dividends.
• A GmbH shareholder must meet the salary and education requirements and not have a controlling share in the company to obtain a German Blue Card residence permit.
• Otherwise, they must apply for a self-employed residence permit in Germany.

Investing in shares of a GmbH in Germany

Company formation and German Blue Card residency

Contact us for more information about registering a company in Germany and obtaining a Blue Card residence permit as a shareholder of a GmbH. Our consultants will provide you with all the necessary information as soon as possible. The WBG team, with years of successful experience in company formation and obtaining a German residence permit, is by your side to help you navigate this challenging path as quickly and smoothly as possible. To contact us, click on the WhatsApp button below.

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