I work remotely for a US company, and have been staying in Berlin. I'm applying for a language course visa, and one of the requirements is 'Proof of Secure Livelihood.' It specifies either an escrow account of more than 8136 euros or a third-party who can be confirmed as the primary source of income. My question is as how to answer this question. Is it OK for me to say that I am working for a US company remotely that does not German subsidiary (and on the visa application I noted that I am maintaining a permanent residence in the US I am returning to after the end of the visa (up to 1 year) )? Is it strictly legal, or a gray area? If not, what's the best way to deal with this question? Thanks.
Legal issues aside, I think you might be misinterpreting the requirements of the "proof of secure livelihood".
I'm assuming you are talking about Berlin, this might be specific to the Bundesland:
submission of a declaration of commitment by a third party on an official form (Verpflichtungserklärung)
You need to have the money, or you need to have a guarantee from a third party. A working contract is not a guarantee. If you'd stop working, they'd stop paying. A guarantee is something that says "we will pay for this persons costs, no matter what."
That said, the easiest way might be to open that escrow account. You will need the money anyway, you might as well have it in a German bank.
If you do not have a German work permit you are not supposed to work while you are in Germany, no matter who is paying you or where they are located. Working German residents are supposed to pay taxes. Presumably, you will not be paying taxes against the money the US company is giving you. THAT is the gray area you need to worry about, in my opinion.