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I work for a U.S based company. It has a German subsidiary. I am asked to re-locate to Germany to help support the company. What are the possible work permit options? I am still employed and paid by the U.S entity. I have been doing a lot of research, but this is not a German employment visa situation, it would seem.

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    why not? You're going to be employed while living in Germany
    – littleadv
    Sep 21 at 17:20
  • You need a visa to work, I’d imagine you qualify to apply as an imtra-corporate transferee. What did your US company HR team advise?
    – Traveller
    Sep 21 at 19:38
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    How long are you going to be in Germany? The use of "relocate" implies that you will be there long enough that they should transfer you to the German payroll. If they think you will be living in Germany and remaining on the US payroll, they need to talk to a lawyer in Germany, who will set them straight.
    – phoog
    Sep 21 at 22:03

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I am assuming be "relocate" you mean you will stay in Germany a long time, not just a month or two. Your only legit option is to transfer to the German branch and be employed and paid by them.

A few general pitsfalls and explanations:

  • The US makes all citizens pay taxes, Germany in contrast makes all residents pay taxes. So yes, as a US citizen residing in Germany, working in the US you will pay taxes twice. First to the IRS and then to the German equivalent, the Finanzamt. And while Germany and the US have double taxation treaties to lessen the burden, that only means your US taxes paid can be used as deductables against your German taxes. But that still means you will pay full US taxes, and about half (due to deducting your US taxes on the German tax declaration) the German taxes. Make sure your company compensates you accordingly, otherwise, you lose money compared to working in the US (or being a German and working for the German branch in Germany).

  • Health insurance is mandatory no matter which model you pick. If you are employed by a German employer, the employer is bound by law to pay half your health insurance fees each month. So if you see that they pay lets say 5000€ per month, they actually pay you 5000€, and your health insurance around 400€. If you decide to stay with your US employer or become self-employer in some kind of s(h/c)am, you would need to pay both halfs of health insurance, for 5000€ a month that is probably around 800€.

  • Technically speaking, residing in Germany and working and being paid by a US company is perfectly legal. Assuming you pay your mandatory health insurance by yourself and you pay taxes in Germany on the money you make. My wife did that, and I have never seen a German form filled out so quickly. You pay maximum insurance rate and a lot of taxes? Never seen buerocrats being that helpful before. However, that is not a reason for any Visum. While being in Germany doing that is perfectly okay, coming to Germany for that reason is not a valid Visa reason. You would need to find a different visum for Germany. It would work for example if you married a German and applied for family reunion.

  • Technically, I think you could claim you are self-employed, and do the above. Self-employment and a means to support oneself is a valid reason for a visa, but the intention is that you are actually self-employed in Germany and making money through your self employment, not another source. So... while technically possible, I would not do that without a lawyer, to not be in any danger to be accused of fraud.

  • Maybe your corporation has other options. Ask them, you never know which wheels big corp can move or grease or dodge to make things happen.

To summarize: the easy and legal way is to switch employment to the German branch, have a German income, get half your health insurance paid, and get a transfer visum. Anything else... is dodgy. You may want professional help.

Whether you decide to transfer or not, make very sure you know all costs associated with working here and living here, like health insurance and double taxation. You don't want to find out your move makes you less money than just staying in the US.

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    But then there's the US foreign earned income exemption and the ability to deduct foreign tax from US income, so the US income tax liability will likely be zero except in the first and last years if the taxpayer moves midyear.
    – phoog
    Sep 24 at 10:53
  • I clarified that I meant taxes when keeping the US job.
    – nvoigt
    Sep 24 at 10:57
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    The FEIE depends on where you are when you do the work, not on the location of the entity that is paying you. See irs.gov/individuals/international-taxpayers/… "The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income." If you live in Germany, you're working in Germany.
    – phoog
    Sep 24 at 15:48
  • "And while Germany and the US have double taxation treaties to lessen the burden, that only means your US taxes paid can be used as deductables against your German taxes." That doesn't seem like much use, because even without any tax treaty, you can use foreign taxes paid on doubly-taxed income, as a tax credit on your US taxes.
    – user102008
    Sep 24 at 16:05
  • Since the earned income is earned in Germany, it has the dibs. So the OP will first pay taxes in Germany and then claim credit on their US taxes, not the other way around.
    – littleadv
    Sep 24 at 18:08

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