Whether you are a US citizen, a German national living in the US, or someone else, there is a chance you might be interested in working for a German company. No wonder – German companies are among some of the best employers worldwide.
You can live in the US and work for a German company, whether it’s located in the US or in Germany. You will pay taxes in the US when living there most of the year. However, staying in Germany for longer than 183 days in a calendar year makes you tax liable in Germany.
This article explains all the little nuances you need to be aware of when working for a German company that is located in Germany or in the US. Also, read our article about working for a German company remotely while living abroad.
Working for a German company and living in the US
There are plenty of German companies in the US and outside to choose from. Most of them offer superior working conditions and benefits compared to most American employers.
Which areas are the best to work in the US for a German company?
Since the US economy is moving forward at a rapid speed, Germany doesn’t want to miss out on the opportunities. The number of German companies trading and opening their departments in states increases year after year.
There are over 4,500 German companies in the USA employing more than 700,000 people.
Some US industries offer better prospects for German firms, thus, better opportunities for job seekers. When looking for a position in a German company in the US, you should look in the following areas:
German companies value internal training programs and further education based on the German dual teaching model. That way, even not qualified applicants have a chance to get a job.
Are you working for US company and want to move to Germany? Read our guide on how to work a US job from Germany.
To start working for a German company and doing it in the right way, one needs to look into the job agreement. Depending on the situation, an employee and employer could agree on the following employment setup.
1. An employee in the US
If you and the German company are based in the US, the best option is to become an employee for that firm. You will be enrolled in the US payroll, pay all your taxes in the US and be eligible for a US visa & work permit.
2. An employee in Germany
On the other hand, for companies based in Germany, the most viable option to hire you is as an employee there. Similarly, you will be enrolled in the German social security system, e.g., payroll, and pay your taxes there.
3. Self-employed or contractor
Thirdly, you might consider becoming a self-employed contractor and delivering services to a German company that way. It’s always easier to work as a contractor or freelancer remotely or from abroad than as an employee.
In that case, many German labor laws won’t apply to you, so it’s also easier for the employer to handle such a work agreement.
To work as a contractor for the company in Germany, you need to register as self-employed in the country where you live or in Germany. After that, you can simply bill the German employer instead of working for a wage.
4. A freelancer in Germany
One of the options is to register self-employment in Germany. All EU&EEA nationals can do it without needing to obtain a visa or residence permit. Non-EU citizens can apply for a German Freelancer visa.
To become self-employed in Germany, one needs to register as a freelancer with the local tax office or online by using this tool.
By doing so, you will obtain several tax identification numbers, such as:
- Tax ID (Steuer-ID)
- The tax number (Steuernummer)
- VAT number (Umsatzsteuer-ID)
You can register as a self-employed or freelancer in Germany by using this tool.
US visa and work permits
If you aren’t a US citizen or a Green Card holder, you will need to consider getting a work visa first before accepting a job in a German company. However, it only applies if a company is located in the US. To perform a job remotely for a company based in Germany, you don’t need a US visa/work permit.
Assuming the job you are getting is located in the US, there are two work visas you might consider. Yet, keep in mind that to obtain a work visa, an applicant must already have an employer or potential employer.
Visas from this category allow you to stay and work in the US for up to five years. These non-immigrant visas include work visas in types H, L, O, P and Q.
The requirements and cases are different for each category. You need to have a potential employer in the US to apply. They must submit an application (Form I-129) to the US authorities. After it has been approved, you can apply for a work visa at a US embassy abroad.
For staying and working a longer period of time in the US, you want to look into immigrant visas. It’s called Green Card and gives you permanent residency in the US.
Similar to nonimmigrant visas, your future employer must first file an application with USCIS (I-130). After approval, you can apply for the visa. Typically, a nonimmigrant visa is the first step when moving to the US.
After five years, you can apply for an immigrant visa. After another five years, you are eligible for US citizenship.
Largest German companies in the US
There are plenty of places to work if you are considering getting a job in a German company in the US. Each year more and more German companies are expanding to the US to benefit from American markets.
Most automotive German brands have their departments and production in the US. These are counted as some of the best employers in Germany.
Moreover, the German financial sector is also well represented in the USA. Allianz. The tech scene also isn’t lacking behind with many opportunities for programmers and software developers.
Several strong German companies in software development have branches in the states, e.g., SAP and Software AG.
Some German companies in the US are looking for Germans and German speakers in particular. Therefore, knowing the German language to some degree is a great asset.
Here are some of the largest German companies represented in the US:
- Daimler Group
- T-Mobile USA
- Allianz of America
- DHL Holdings (USA), Inc.
- Siemens USA Holdings
- Volkswagen Group of America
- Fresenius Medical Care Holdings, Inc.
- Robert Bosch, LLC
- ThyssenKrupp USA, Inc.
- Lufthansa Group
- Bayer Cooperation
- Aldi Inc.
Paying taxes while working for a German company
Remote work from abroad can lead to a change in taxation rights or the employee’s tax and social security status. Once you become a resident in one place, most countries will tax your worldwide income.
So, how and where will you pay taxes while working in the US for a German company?
A basic rule of German income tax law is that you must always pay taxes where your place of residence is. According to tax law, this is the place where you live most of the time in a year or have an apartment, property, etc. Hence, one must pay taxes on foreign and local income in that country.
For the work done in the US, you pay taxes in the US if you live there most of the time. Generally, you will pay the same income taxes as anyone else in the US.
However, if you spend some time of the year in Germany or in another country, that might vary. Staying for more than 183 days in a calendar year makes you tax liable in Germany.
In any case, USA and Germany have a double-tax agreement. It states that you pay taxes in the country you live in most of the year.
So when working for a German company and living in the US, you will receive a gross wage, and taxes must be paid in the US.
Therefore, there will be no requirement to file taxes in Germany. Yet, some employers might have automatic deductions, so it’s worthwhile to discuss it before. Because otherwise, you will have to file in Germany to get a tax return.
If you are residing most part of the year in Germany, have your base there, and only for some time staying in the US, then all your taxes must be paid in Germany.
On the other hand, people who aren’t residing in Germany, but get an income from there, are subject to limited tax liability.
US citizens are taxed for their worldwide income in the US, even if they live abroad. Therefore, you must file a U.S. federal tax return every year and report your global income.
Another aspect of working remotely from abroad is where do you receive and pay for social security? It will depend on some factors. If these conditions are met, you will pay social security taxes in Germany:
- The employee works regularly remotely in Germany AND abroad
- The employee’s place of residence is in Germany
- A substantial part of the employee’s work is in Germany, or the employer is registered in Germany
Like with the income tax, a person will be liable for social security in the country where they physically carry out the work.
However, Americans who work abroad and who are self-employed still have to pay US Social Security taxes. In some cases, US citizens can opt-out from the American system.
As self-employed, you will be responsible for social security in the country of residence. As an employee, it will depend on the country where you are living.
Remote workers must communicate it with German companies so they don’t withhold some obligations as a result. Because that way, you might end up paying for social security in two countries.
You also need to figure out your health insurance options when living in the US and working abroad. You probably don’t need German insurance since it’s valid only in Germany.
Cigna Global will be an optional health insurance solution for your situation. Because Cigna insurance is international, you can use your policy not only in the US or Germany but almost anywhere in the world.
Cigna is one of the largest international insurance providers out there.
Work culture in German companies
When working for a German company, it’s essential to learn about work culture to avoid any misunderstandings and confusion.
Generally, working in German companies is significantly different from what you used to in the US. Punctuality and efficiency is the key to everything.
You also will see much more formalities and fewer casualties. Co-workers and subordinates often address each other formally as Herr (Sir) and Frau (Miss).
If you are working in Germany, the differences are even more visible:
- workday starts early – 7.30 – 8.00 am
- everyone is on time
- everyone is keeping deadlines
- you have a 30 min lunch break
- work time is focused and efficient
- not many chats around the water cooler and coffee machine
- less or no after-work drinks
- open space offices are less common
What else to consider when working remotely for a foreign company?
There are many details one needs to watch out for when working remotely from another country. We can’t cover all of them, but the following points are worth considering:
- Immigration law: Do you have a right to work in that country? Do you need a visa? Ask the advice of the lawyer.
- Employment law: How do you and your employer comply with all rules for remote work? Do they know foreign labor laws?
- Data protection: How do you handle employer’s or client’s data when working remotely? Is it protected enough? Use VPN for security.
- Employer liability: Do you have any liability insurance for the work you do?
- Health and safety: Employers have certain legal responsibilities regarding the health and safety of the employee, which must be reviewed when working remotely.
- Medical insurance: You must have health insurance that provides coverage abroad.
- Travel and home insurance: Any policies you need while staying abroad?
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