Several European entrepreneurs aim to
undertake work abroad, because by doing so they can achieve a higher
income in Western Europe and possibly better working environment
compared to the existing ones at home. In case an EU entrepreneur
receives a mandate in the building sector from a German company, this
may be carried out the most easily if the trustee establishes a
commercial company in Germany and works with it on German territory.
The company may only act on a legal basis, meaning that all prescribed licenses and documents need to be obtained from the local bureaus in order to be able to function legally.
Many may plan to establish a GmbH or an UG, whereas the newly established company would hire Hungarian employees who then carry out the activity. Naturally, this is also a way to work legally in Germany. In this case it is necessary to obtain the employment permit in Germany for your employees.
This but has severe conditions which are probably not impossible, but also not easy to comply with. On the other hand it is rather a long period, not to mention the costs bound.
The procurement of the necessary license may last for months. One would primarily need a registered German address in order for the employees to obtain the employment permit. Should you have succeeded in solving the German employment permit for the company’s employees, you should later give consideration to the considerable dues after income, social insurance and taxes calculated upon income. These are higher even in comparison to Hungarian fees.
Thus, under such conditions it is not so certain anymore that German employment is that advantageous. Should you consider obtaining the employment permit, you should get informed on the page of the Federal Employment Office.
A more simple solution is, however, if the main entrepreneur establishes a German limited liability company (GmbH, UG) which will be ready within 1-3 weeks. The moment he has submitted to the Registry Court he may already start his entrepreneurial activity on German territory, but he must obtain the business license for the employees, i.e. the young entrepreneur‘s license. Such a business license takes 1-2 days and it is tax free until the amount of 7,500,- EURO income. Ulterior, he has to pay a strippy tax to the extent of the income. The founded GmbH or UG enters a contractual relationship with people having a business license and after a short period of time it may start its activity on German territory.
In this case there will be no need for the German employment permit because the main entrepreneur has a contractual relationship with the employees who may also undertake legal activities in Germany.