How to establish an employment business

Arbeitsvermittlung vs Arbeitnehmerüberlassung

Providing employment services or outsourcing personnel is quite a beneficial business direction, especially because demand for qualified specialists in Germany is quite high. In this article we will explain what permits are required to start an employment business in Germany, steps to establish a ready-to-operate business. And if you are a foreigner or want to hire non-EU staff, you will learn what the additional requirements are.

When it comes to activities that have to do with personnel, and in particular provision of personnel to others, there are two general options:

1. Employment services (private Arbeitsvermittlung)

Employment services (private Arbeitsvermittlung) are the process of matching employers to employees. A business can act as an employment/recruirment agency that assists clients in searching for suitable candidates. In this case the client is the one employing the personnel and not the agency. As of 2002 such activity as employment services (Arbeitsvermittlung) does not require a special permit. So, if you are interested in starting a recruitment agency, you won’t have to obtain a permit. However the business needs to be registered with the Trade Office (Gewerbeamt) before the activity can be started.

As a rule, employment agencies get 20-30% from the annual salary of the employee they’ve found.

Watch our video on how to establish an employment business in Germany:

2. Transfer of personnel/personnel leasing (Arbeitnehmerüberlassung)

Transfer of personnel/personnel leasing (Arbeitnehmerüberlassung) is commercial leasing of own employees for work to third parties. Employers in this case act as temporary work agencies leasing their staff to third parties to perform work within the scope of their agency’s business activity.

The transfer of personnel (Arbeitnehmerüberlassung) is an activity that requires a permit (erlaubnispflichtiges Gewerbe). The permit is issued by the Federal Employment Agency (Bundesagentur für Arbeit). There are certain cases when transfer of personnel may not require a special permit however the employer leasing the staff has to notify the Federal Employment Agency in writing and in advance about the assignment in question.

Please note that if you are going to hire and then lease personnel from outside of Germany, such staff will require a valid residence permit.

Here are the steps to launch a ready-to-operate businesses:

1. Check if your business activity requires a permit from the Federal Employment Agency.
2. Register a company. In most cases a foreign person can form a company in form of UG or GmbH and be a managing director without being a resident of the EU. However if you decide that you want to get a German residence permit because of the business, we can assist you with the residence permit as a self-employed or a Blue Card. We have multiple articles about company formation in Germany and obtaining German residence permits. You are welcome to check them out.
3. Obtain tax and VAT numbers.
4. If the permit from the Federal Employment Agency is required (for (Arbeitnehmerüberlassung), apply for the permit. If the permit is not required, skip this step.
5. Apply for Gewerbeanmeldung.

Our company, Nexus-Europe GmbH provides turn-key solutions: from establishing a company to obtaining all necessary permits. We can also assist you with obtaining the German residence permit because of business. And if you are going to hire qualified staff from non-EU countries, we can obtain the German residence permit for them, allowing them to stay and work in Germany. Because all projects are guided by certified Project management professionals (PMP) you get a working business in Germany and ensured quality of performance. On time and on budget.