Working in Munich, but still employed by US Corp

So since I'm holed up sick figured I should get my German act together… and I can't imagine I'm the only one with the same scenario here in Munich.

So here is "Living and Working In Munich" scenario 2.1.5.2.6.a

Though working in Munich, I work for and am paid by California company (though I am the major, but not only stockholder). The contract with between the German company and the California corporation. I'm here for around 6 months (if I stay longer I'll do the green card thing). By California standards I am not self employed as it is a small company that has raised capital, etc.

I assume I have to "do" the Anmeldung (though I'm wondering what paperwork is required in this scenario). Though life is going fine there are some pain in the butt things I need to do and registration would clear that up (DHL wanted my registration to get my O2 SIM card, bank opened my account, but no ATM card until I give it to them).

The rules seem somewhat "flex" and it seems like it depends on who you get as to what is required… anyway has anyone been through this scenario or a close variant?

Anabi,
do you have a Residence Permit? A work permit? Do not do the green card thing - if, for some reason, you end up here for more than 5 years, you'll have to leave the country for like 6 months even if you don't want to leave. Just do the work permit thing.

A friend of mine just moved here in August and is still working for her American company(in more ways than just the pay - they keep her on the phone 'til the wee hours!). She got a residence permit and a work permit and she's good to go.

Thanks... didn't know about the work permit if you're just here for a US company who is doing business with a DE company.

Off hand does she pay US or DE taxes? That's always the big question (all about the flo, yo).

She'll be paying both...Germany and US have a reciprocal tax agreement so, if you are being paid in Euros, the first $85K you make( how much is that in Euros, like 70K€), you won't be taxed on in the States. However, if you make over that amount, the U.S. will tax you on the difference. She'll be doing the reverse, I'm sure. Germany won't let her live here making all that money and not pay taxes(ha,ha).

Unless the German company you're working with requires a work permit, I wouldn't bother. You're employed by a U.S. firm which pays you in dollars into your American bank account presumably. I would say if you have your residence permit then you're probably sorted (if you stay less than 3 months you don't even need that). If your salary is not being paid into a German bank account and the German company is not paying you directly, the Finazamt (German IRS) will be none the wiser and you'll be gone soon enough anyway. Pay your taxes in the U.S. for all of your wages in 2004 and you shouldn't have a thing to work about.

here is my suggestion. I know a lot about this after going to court and winning against a company that hired me as an expat, when in fact I was a german employee. As an expat (when I say this, I mean someone who has a foreign contract and is on assignment here) you are not entitled to any german woking rights. These rights include: minimum 28 days holiday per year, overtime pay even if you are a salaried employee, Kundigungsfrist (the company cannot fire you unless they can prove you are not doing the job well), unemployment insurance, health insurance (100% coverage for medicine and doctor visits), and a pension.

If you are recieving your money from abroad, you will not be entitled to any of these things, with the possible exception of the health and unemployment insurance (but only if the company said from the beginning you will be here 5+ years, which is rare).

If you want to stay in germany long term, i would demand a german contract. This will give you all the rights as a german worker and make your life here easier. If you continue on as an expat, you will have a very difficult time here. The government will always view you as a foreign employee, you will be unable to get health insurance, and you will have little to no rights under german working law.

On the issue with your visa: in order to legally live in Germany you need to have a Aufenthalsterlaubnis. In order to work here you need an Arbeitserlaubnis. The company is the only one who can apply for these things for you. If you have a job (either as a german worker or as an expat) the company is required to get both these visas or you are not allowed to live and work here. Once you have the Aufenthaltserlaubnis you can get a Meldebescheinigung and then you can get a mobile phone, car, etc. Without the Meldebescheinigung, these things are not possible to buy and register.

Another note about the tax thing. As a worker in germany, you are required to pay german taxes. However, as a US citizen you are required to pay US taxes even if the money was made abroad (they are the only country in the world that requires that). There is an agreement between germany and the US where if the amount you earn is under a certain amount, the taxes paid in germany will count as taxes paid in the US.

The trick that the companies are using (as mentioned above) is that with Social Security and Sozialkasse. If you are here as an expat for less than 5 years, you are supposed to pay into the system in your home country (this is using the assumption that you will return to your home country and so then you wont have any trouble with Medicare and Social Security when you finally retire). the fact is the german Sozialkasse is much better as the US social security and Medicare. Under the german Sozialkasse you are entitled to 100% coverage on healthcare and medicine, unlimited unemployment insurance (if you are unemployed for 6 years, you get 6 years worth of unemployment money), and a pension which makes Social Security look like pocket change. If you plan to stay in Germany long term (I plan to become a citizen!) then you must do everything you can to start paying into the German Sozialkasse. The company will try everything possible to resist this, as it is much more expensive (up to 60% more expensive) for them to pay into the German system as into the US one. If you plan on going back to the US soon, than dont bother.