Blog | Moving to Germany: The complete guide

faller-finance-article-the-complete-guide

Moving to a new country requires sometimes complex administrative procedures, and the language barrier can often be a challenge.

In this article, our advisors have gathered the essential information you need to know for a smooth relocation and compliance with German laws.

1. Anmeldung: Registration at the town hall

The Anmeldung is the registration at the town hall in Germany and is mandatory.

Whether for a job or an internship, your employer will request your Anmeldung. This registration will also be required for other administrative procedures.

It will allow you to obtain a tax number (Steuer-ID) to work in Germany, as well as open a bank account. Without the Anmeldung, you won’t be able to start a business or benefit from family allowances.

Therefore, this registration at the town hall should not be overlooked!

However, there are two exceptions where the Anmeldung is not mandatory:

If you stay in Germany for less than 3 months.
If you move within the next 6 months: If you are registered elsewhere and stay at your new address for less than 6 months.

To complete your Anmeldung, you must appear in person at your city’s Bürgeramt with an appointment. You have 14 days to register once you move to Germany. You will then receive your Meldebescheinigung, the certificate confirming your registration.

Before attending the appointment, make sure to bring the following documents:

The completed and signed Anmeldung bei einer Meldebehörde form.
A valid ID card or passport.
A residence certificate (Wohnungsgeberbestätigung) signed by the landlord or subtenant. You need to obtain this before moving in.
Your marriage certificate and/or your child’s birth certificate if your partner and children reside in Germany.
A completed and signed proxy form if you send someone else to register on your behalf.
If you have a vehicle registered at your previous address, bring your "Zulassungsbescheinigung".

Moreover, if you plan to leave Germany, you will need to complete your Abmeldung, which is also mandatory.

Note: During your first Anmeldung, you will be asked about your religion. Depending on your answer, you may have to pay a church tax.

2. Bank Accounts in Germany

A. How to open a bank account

The three main types of bank accounts you need to know in Germany are the current account (Girokonto), the savings account (Sparkonto), and the blocked account (Sperrkonto).

The Girokonto is highly recommended when moving to Germany. It's a good thing we offer free accounts at Deutsche Bank.

The documents you need to provide are:

A valid ID card or passport.
Your Anmeldung.
An initial deposit, which varies between banks.
Proof of income.
Your tax identification number.

B. Bank cards in Germany

There are different types of bank cards, each with its own advantages and disadvantages:

The EC-Karte/Girocard, which is equivalent to a standard debit card. It is widely accepted in Germany, but it cannot be used abroad.
The credit card (Kreditkarte), which can be used abroad but is less accepted in small German shops. With this card, your purchases are only debited at the end of the month or after a defined period.
The international debit card or prepaid credit card (Prepaid Kreditkarte).

Note: In Germany, cash is often preferred as a payment method. Some establishments only accept cash. Therefore, always keep some cash on hand!

3. Civil Status

A. Identity card and driver’s license

For non-EU citizens, a passport and a valid visa or residence permit will be required. Your driver's license will be valid for a period of 6 months after your registration of residence in Germany. After this period, you will need to exchange it for a German driver's license.

B. Marriage/Divorce

Foreign marriages are recognized in Germany. If you got married in another country, you can request a divorce in Germany.

In Germany, before divorce, the couple must be separated for one year (financial and physical separation). This year of separation is called Trennungsjahr and can be shortened under certain circumstances.

To file for divorce, you must go to the family court in your place of residence or that of your spouse. You cannot file for divorce personally, as legal representation by a lawyer is mandatory (Anwaltzwang).

C. Family allowances (Kindergeld)

Family allowance is a benefit of €250 per month per child, paid by the State. If the parents are separated, the allowance goes to the parent with whom the children live.

The allowance is granted for children under certain conditions:

For children under 18 years old.
For 18 to 21-year-olds who are unemployed and registered as job seekers with the employment agency.
For 18 to 25-year-olds who are in higher education or vocational training (they must not work more than 20 hours a week), doing a voluntary service year, or unable to find an apprenticeship.
Regardless of their age, if they are unable to support themselves due to a disability that occurred before their 25th birthday.
Up to 27 years old for orphans.

The documents to be provided to the Family Benefits Office include:

Family allowance application form.
Form E 401 (certificate concerning the composition of your family).
Birth certificate(s) of your child(ren).
Bank account details.
Certificate of termination or non-payment from the family benefits office of your place of residence.

Note: A supplement called “Kinderzuschlag” may be paid if the parent's income is insufficient. In addition, parental allowance (Elterngeld) and parental leave are other benefits offered by the State.

4. Salary in Germany

Important to note: In Germany, taxation occurs throughout the year! As a result, net salaries are also net of taxes.

The main taxes in Germany are:

Income tax (Lohnsteuer), which is calculated based on your tax class (Steuerklasse) and progressively deducted based on income.
Church tax (Kirchensteuer), which varies by region (Länder), represents about 8 to 9% of the income tax, and applies based on your religion.
Solidarity surcharge (Solidaritätszuschlag), which is 5.5% of your income.

Then, mandatory social contributions are deducted from the salary, and their amounts vary depending on the salary.

They include:

Public pension (18.6% of gross income).
Unemployment insurance (2.4% of gross income).
Public health insurance (14.6% of gross income, with an additional 0.7% to 1.3% depending on the health insurance provider).
Public long-term care insurance (3.05% of gross income, with an additional surcharge of 0.35% for childless individuals).

Note: In Germany, contributions are equally split between the employer and the employee, i.e., 50/50.

5. Insurance in Germany

A. Pension and unemployment insurance (Rentenversicherung and Arbeitslosenversicherung)

Pension insurance is mandatory. Click here to understand how the pension system works in Germany.

Unemployment insurance is also mandatory, with a contribution of around 2.4% of gross salary. Employees who have contributed for at least 12 months in the last 30 months can receive Arbeitslosengeld I for 6 to 24 months, depending on the contribution duration. Once this period expires, you may apply for Arbeitslosengeld II (Hartz IV).

B. Health insurance (PKV, GKV, supplementary)

Health insurance in Germany is mandatory. It is divided into two categories: private and public insurance. The choice between these two depends on your status.

Click here to read our article on health insurance.

C. Home and liability insurance (Hausratversicherung and Haftpflichtversicherung)

Liability insurance is not mandatory in Germany, however, it is strongly recommended, as is home insurance, which is also not mandatory.

Click here to read our article on home and liability insurance.

D. Car insurance (Kfz-Versicherung)

To learn all about car insurance and the rules to follow, check out our article “My car in Germany: What you need to know.”

E. Legal protection insurance (Rechtsschutzversicherung)

Legal protection insurance covers legal dispute costs. Although it is not mandatory, it is often used in Germany, as more and more conflicts are resolved in court.

It can be useful for personal, professional, housing, or automotive matters.

F. Disability insurance (Berufsunfähigkeitsversicherung)

Disability occurs when a person can no longer perform their job long-term (which is different from sick leave) and thus no longer receives a salary.

It is recommended to start a disability insurance plan early, as the cost depends on the person's age and health. The later you start, the higher the monthly premium will be.

Note: The German social security system provides only minimal compensation in case of disability, so do not wait.

G. Accident and disability insurance (Privat-Unfallversicherung)

This insurance protects you against accidents that occur in daily life, outside of the professional sphere, such as at home, during leisure activities, or while traveling.

This coverage is essential as it complements your mandatory health insurance. It provides compensation in case of accidents (disability, incapacity, or uncovered medical expenses) and offers additional services such as a disability pension.

Some policies extend coverage to the entire household. Although not mandatory, it is highly recommended to protect yourself in everyday life.

6. Taxes in Germany

You will need to pay, in particular, income tax, church tax, property tax, inheritance, and inheritance and gift tax (ranging from 7% to 50%, depending on the relationship between the donor and recipient, as well as the value of the assets). Even if you do not own a television or radio at home, you will need to pay the TV/Radio license fee.

The German tax system offers many deductions, such as professional expenses, childcare costs, or social contributions.

Note: Tax residents in Germany are taxed on their worldwide income, while non-residents are taxed on their German-sourced income.

7. Accommodation in Germany

When you arrive in Germany, finding accommodation can be difficult.

Is it better to rent or buy?

Check out our article “Buying or renting in Germany: which option to choose?”

8. Investing in Germany

Investing in Germany offers great opportunities as an expatriate, whether in real estate, stocks, or even a real estate investment trust (REIT).

Contact our experts to guide you through the process and optimize your financial situation.

Conclusion

Do not hesitate to book an appointment with our financial advisors to optimize your situation and make the most of your new life in Germany.