Germany is attracting more and more international tech talent. But the Blue Card often prevents these experts from founding startups themselves, says Antler partner Alan Poensgen.
Alan Poensgen is a partner at globally active early-stage VC Antler, one of the largest early-stage investors in the world with more than 1000 startup investments. In this article he explains why the German visa system is slowing down international tech talent who want to found startups in Germany.
Germany – and Berlin in particular – has become one of the world’s strongest magnets for international tech talent. This is said far too rarely, so I’ll say it clearly here: The quality and number of international engineers and operators coming to Berlin has changed fundamentally in the last decade.
Over 100,000 Blue Card holders in Germany
When we built a software engineering hub with 200 people in Berlin for Rocket Internet in 2012, we had maybe a handful of engineers from India. Indian Institute of Technology (IIT) graduates – who have built a disproportionate share of the most valuable companies in Silicon Valley – were virtually non-existent in Berlin. Today things are different. The last available figures from 2023 show around 113,500 Blue Card holders in Germany – more than double the number from 2018 and almost 80 percent of all Blue Cards issued in Europe.
This is a real success story. As a country of notorious whiners, we should be proud of this.
And yet I have the same conversation every single week. A top international talent working at a tech company in Germany tells me that he or she wants to start a business in Berlin. The idea is there, the co-founders are ready, and there are savings to bear the risk. And then the question comes: Can I do this without risking my immigration status?
In most cases the honest answer is: not easily.
Why the Blue Card system is not designed for start-ups
The Blue Card is based on a single assumption – that its holder is permanently employed and receives a salary. The moment someone wants to build a company instead of joining one, the system collapses.
Anyone who quits their job to start a business has around three months to find new, qualifying employment before their residence status is at risk. Three months. That’s not enough to found a company, set up co-founders, build something and collect initial capital in order to then hire yourself over the new company. And anyone who brings their own capital into the company would then be forced to pay themselves a minimum salary of around 50,000 euros – and pay taxes on that. On your own money. Absurd to say the least.
The alternatives are no better in practice. Switching to a residence permit for self-employment often takes over a year and is assessed by the IHK according to criteria intended for bakeries and consulting firms – not for companies that make losses for years before scaling. The settlement permit takes years and requires B1 German — an odd ticket for a city that wants to be a global tech hub.
And no: waiting is not a solution. Starting a business is not a career move that you place on an immigration schedule. The moment is here or it’s gone – the team is falling apart, the market is moving, the risk appetite is finite. By the time the settlement permit comes, the window has closed. Most remain employed. Some try to build on the side – almost nothing comes of it. The most determined people leave Germany.
This is a tragic waste of an opportunity that Germany has spent a decade building. And it happens at exactly the wrong time.
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The USA is tightening visa regulations and becoming more unpredictable as a destination for international talent. London has lost its relative attractiveness since Brexit. Within Europe, Berlin is the default: the most international, most English-speaking, most startup-dense city on the continent. Germany has a real – and temporary – window right now to become the default location for tech entrepreneurship in the West. We are currently using this window to expel many of our best potential founders.
The good news: This can be solved. And not all of it requires federal legislation or years of EU processes.
Founder desk, English-language guides, more advance notice
Some of this is simply a question of applying existing rules. There are already ways to do this today, and the local administration has more leeway than it currently consistently uses. The demand is not radical: a dedicated startup desk at the State Immigration Office, clear English-language guidelines and reliable results that founders can prepare for in advance.
The bigger levers require political will at the federal or EU level: more lead time before the residence status is at risk and salary requirements that make sense in the start-up phase.
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In the United States, first-generation immigrant founders have built a disproportionate share of the country’s most valuable technology companies. This talent is now looking for another place. Germany has it. Berlin has it. The window is open – the talent is already here and the alternatives are becoming weaker. If we do this right, we will benefit from it for decades.
