Social insurance is inescapable. Anyone employed in Germany is compulsorily insured under German law regardless of where the employer sits (§ 3 SGB IV), and for EU-seated employers Art. 21(1) of Regulation (EC) No 987/2009 says it outright: the foreign employer must fulfil all employer duties — above all paying the contributions — as if it were seated in Germany, including appointing a German-seat Bevollmächtigter twice over (§ 28f(1b) SGB IV and § 130(2) SGB VII).
Wage-tax withholding usually doesn't attach. Lohnsteuer withholding binds only an inländischer Arbeitgeber — one with a residence, place of management, seat, permanent establishment or permanent representative in Germany (§ 38(1) EStG). With none of those, there is generally no withholding obligation at all; the employee settles German income tax through their own assessment (§ 25 EStG). A Betriebsstätte — or a German host company that economically bears the wages — flips the answer on.
Operationally, the sequence is fixed. Notify the accident insurer within one week of starting (§ 192 SGB VII) to get the DGUV Unternehmensnummer; only then can you apply for the Betriebsnummer, because the application requires that number as an input (§ 18i SGB IV). German-language payroll records kept in Germany, per-Krankenkasse contribution collection, and the DEÜV hire report with the first pay run complete the load.
This page is the map for a platform, marketplace or foreign employer with no German presence whose people — or whose customers' people — work in Germany. It follows one finding through its consequences: the offshore asymmetry. German social-insurance law and German wage-tax law ask opposite questions about a foreign employer, and each limb below says what the law demands, quotes the operative German text, and names the identifier or representative you must acquire. Every factual statement traces to the sources listed at the end, verified on 10 July 2026.
1 · Social insurance: obligations follow the employee — you cannot stay offshore
German social insurance runs on the Territorialprinzip. § 3 SGB IV applies the compulsory-insurance rules to "alle Personen, die im Geltungsbereich dieses Gesetzbuchs beschäftigt … sind" — all persons employed within the territorial scope of the code (our translation). The employer's seat is simply not part of the test. If your employee works in Germany, German KV/PV/RV/AV insurance attaches, and with it the employer's full duty set: reporting every insured employee to the collection point (§ 28a SGB IV) and paying the combined contribution, the Gesamtsozialversicherungsbeitrag (§ 28e SGB IV).
For employers seated elsewhere in the EU, the coordination regulation removes any remaining ambiguity. Art. 21(1) of Regulation (EC) No 987/2009: "so hat er den Pflichten nachzukommen, die die auf seine Arbeitnehmer anzuwendenden Rechtsvorschriften vorsehen, namentlich der Pflicht zur Zahlung der nach diesen Rechtsvorschriften vorgeschriebenen Beiträge, als hätte der Arbeitgeber seinen eingetragenen Sitz oder seine Niederlassung in dem zuständigen Mitgliedstaat" — the employer must fulfil the obligations of the legislation applicable to its employees, notably the obligation to pay the contributions, as though it had its registered office or place of business in that Member State (our translation).
Three duties give the "as if seated in Germany" standard teeth for a foreign employer:
- German-language records, kept in Germany. § 28f(1) SGB IV requires payroll records (Entgeltunterlagen) for every employee, per calendar year, "im Geltungsbereich dieses Gesetzes in deutscher Sprache" — within Germany, in German — retained until the calendar year after the next audit.
- A German-seat representative for those records. § 28f(1b) SGB IV: "Hat ein Arbeitgeber keinen Sitz im Inland, hat er zur Erfüllung der Pflichten nach Absatz 1 Satz 1 einen Bevollmächtigten mit Sitz im Inland zu bestellen." — an employer without a seat in Germany must appoint an authorised representative with a seat in Germany to fulfil the record-keeping duties (our translation). The Bevollmächtigter's place of business (failing that, residence) then counts as the employer's seat.
- A second, separate representative for accident insurance. Statutory accident insurance (Unfallversicherung) has its own parallel rule in § 130(2) SGB VII: an enterprise with no German seat must appoint a German-seat Bevollmächtigter who carries the Unternehmer's duties — and if none is appointed, "Ist kein Bevollmächtigter bestellt, gilt als Sitz des Unternehmens Berlin" — Berlin is deemed the seat of the enterprise (our translation), which fixes the competent insurer by default rather than by your choice.
EU law offers one genuine offshore accommodation. Under Art. 21(2) of Regulation (EC) No 987/2009, an employer with no place of business in Germany can agree with the employee that the employee performs the employer's contribution-payment obligations — the agreement must be notified to the competent institution. Per the GKV's employer portal, the collecting Krankenkasse then arranges the Betriebsnummer and supports the employee, and the Bevollmächtigter can be a Steuerberater or the employee themselves. Two limits keep it honest: the employer's underlying duties continue unchanged — the arrangement shifts payment, not responsibility — and an employee who has paid the total contribution acquires a statutory reimbursement claim against the employer for the employer's share (§ 28m(4) SGB IV).
One provision is regularly over-read and shouldn't be: § 28m(1) SGB IV makes the employee owe the total contribution only where the employer is a foreign state, a supra- or inter-governmental organisation, or a person outside German jurisdiction that fails to pay. An ordinary foreign company does not fall within it — its own § 28e payment duty stands.
2 · Wage tax: obligations follow your German footprint — until one exists, usually none do
Here the answer flips. § 38(1) EStG attaches the withholding obligation only where the wage is paid by an employer "der […] im Inland einen Wohnsitz, seinen gewöhnlichen Aufenthalt, seine Geschäftsleitung, seinen Sitz, eine Betriebsstätte oder einen ständigen Vertreter im Sinne der §§ 8 bis 13 der Abgabenordnung hat (inländischer Arbeitgeber)" — one that has in Germany a residence, habitual abode, place of management, seat, permanent establishment or permanent representative within the meaning of §§ 8–13 of the Fiscal Code (our translation) — or by a foreign labour-hire lender (ausländischer Verleiher) supplying workers for work in Germany.
A foreign employer with none of those attachment points therefore generally has no obligation to operate German wage-tax withholding at all. That conclusion is an inference from § 38(1) read with § 25 EStG rather than a sentence any authority states outright, and the "generally" is load-bearing: individual facts — a permanent representative, the labour-hire rules, the economic-employer rule below — can each flip it. Where it holds, the employee's German income tax on those wages is collected through the employee's own year-end assessment (Veranlagung, § 25 EStG): the employee files a return; the employer runs no German tax rail.
What builds a footprint is broader than an office lease. § 12 AO defines a Betriebsstätte as any fixed place of business or facility serving the enterprise's activity, with a non-exhaustive list that includes the place of management, branch offices, other offices, factories and workshops — and warehouses. Once one exists, the company is an inländischer Arbeitgeber with the full apparatus: ELStAM retrieval, wage-tax calculation, and the Lohnsteuer-Anmeldung filed with the Finanzamt of the lohnsteuerliche Betriebsstätte — which § 41(2) EStG locates at the part of the business where the relevant wage is calculated, or failing a German calculation point, at the centre of the employer's business management in Germany.
In inbound secondments, the withholding obligation can land on your German group company even though the foreign entity runs the payroll. § 38(1) sentence 2 EStG makes the German host company the wage-tax employer "wenn es den Arbeitslohn für die ihm geleistete Arbeit wirtschaftlich trägt oder nach dem Fremdvergleichsgrundsatz hätte tragen müssen" — if it economically bears the wage for the work performed for it, or should have borne it at arm's length (our translation) — and expressly does not require that the host pays the wage itself. Intercompany recharges of a seconded employee's pay are exactly what this catches. If your structure recharges wages to a German affiliate, assume the affiliate has a withholding obligation until advised otherwise.
The representation option on the tax side. German wage-tax law has no general fiscal-representative regime, but § 38(3a) sentence 2 EStG comes close: the Finanzamt may permit a third party with a residence, place of management or seat in Germany to perform the employer's wage-tax duties in its own name. The conditions are specific — the third party must have committed to the employer to do so, must pay out the wage (or take on employer duties only for workers it has placed), and tax collection must not be impaired. Approval is granted by the third party's Betriebsstättenfinanzamt in agreement with the employer's, may carry conditions, and is revocable; where the third party performs the duties, the wage-tax rules apply with the third party standing in the employer's place, and the employer is released to that extent. For a foreign employer that wants a German wage-tax rail without building a Betriebsstätte, this Finanzamt-approved third-party route is the statutory door.
3 · What this means operationally: the sequence before the first payday
The social-insurance limb — the one you cannot escape — dictates a registration order, because one identifier is an input to the next.
- Step 1 — accident insurance, within one week. § 192(1) SGB VII requires the Unternehmer to notify the competent Unfallversicherungsträger (Berufsgenossenschaft) binnen einer Woche — within one week of the start of the enterprise — of its nature and object, the number of insured persons, the opening day, and, for foreign-seated enterprises, the name and residence of the Bevollmächtigter (§ 192(1) Nr. 4, referring to the § 130(2) cases). That notification triggers issuance of the 15-digit Unternehmensnummer (UNR.S) via the DGUV — the uniform accident-insurance identifier since 1 January 2023 (§ 136a SGB VII): the first 12 digits identify the Unternehmer, the last 3 the specific enterprise.
- Step 2 — the Betriebsnummer, which needs step 1. To participate in the social-insurance reporting procedures at all, the employer must electronically apply to the Bundesagentur für Arbeit for a Betriebsnummer for each Beschäftigungsbetrieb — and § 18i(2) SGB IV lists the Unternehmensnummer including its suffix among the data the application must carry. Berufsgenossenschaft before Bundesagentur: the sequence is statutory, not stylistic. The BA describes the Betriebsnummer as the elementary identifier of the Meldeverfahren — it keys every DEÜV report and allocates contribution payments to your employer account.
- Step 3 — per-employee collection points. There is no single "social-insurance registration". The collection point (Einzugsstelle) for the total contribution is each employee's own Krankenkasse (§ 28i SGB IV) — a foreign employer deals with as many Einzugsstellen as its employees have Kassen (for minijobs it is the Minijob-Zentrale). The DEÜV hire report is due with the first payroll run, at the latest six weeks after commencement (§ 6 DEÜV).
- Step 4 — the tax rail, only if it attaches. If (and only if) a § 38(1) attachment point exists: notify the opening of the Betriebsstätte (§ 138 AO; the further particulars go electronically by official data set — in practice the "Fragebogen zur steuerlichen Erfassung", the ELSTER term rather than the statute's), obtain the Steuernummer, retrieve each employee's ELStAM from the BZSt at the start of the employment, and file the Lohnsteuer-Anmeldung with the Betriebsstättenfinanzamt by the 10th day after each filing period — monthly, quarterly or annually depending on prior-year withholding (quarterly above €1,080 up to €5,000, annually at €1,080 or below, otherwise monthly; thresholds per the § 41a EStG text in force July 2026).
The ELStAM identifier nuance, so it doesn't surprise you. The current text of § 39e(4) EStG keys the employer's ELStAM retrieval to the employer's Wirtschafts-Identifikationsnummer (W-IdNr) — and a third party engaged to run the withholding authenticates with its own W-IdNr. But the statute carries its own transition rule, § 39e(9) EStG: "Ist die Wirtschafts-Identifikationsnummer noch nicht oder nicht vollständig eingeführt, tritt an ihre Stelle die Steuernummer der Betriebsstätte …" — while the W-IdNr is not (fully) introduced, the Betriebsstätte's Steuernummer takes its place (our translation). Consistent with that, the official 2026 Lohnsteuer-Anmeldung form still carries "Steuernummer" as its employer-identifier field (BMF Muster für die Lohnsteuer-Anmeldung 2026, published 14 August 2025). Expect payroll software to ask for both and the Steuernummer to do the work for now.
Employee-side data has statutory fallbacks, so onboarding cannot stall — but the fallbacks bite. The employee must give you their Steuer-IdNr and date of birth for the ELStAM retrieval (§ 39e(4) EStG); if they culpably don't, the employer must withhold at Steuerklasse VI — the most expensive class — under § 39c EStG (with a three-month relief where the failure isn't the employee's fault). A missing Versicherungsnummer is resolved by a query to the Datenstelle der Rentenversicherung inside the DEÜV procedure (§ 28a(3a) SGB IV), and an employee who names no Krankenkasse within two weeks must be registered by the employer with their previous Kasse — or, absent one, a choosable Kasse of the employer's selection (§ 175(3) SGB V).
1. Appoint the German-seat Bevollmächtigter — once for the payroll records (§ 28f(1b) SGB IV), once for accident insurance (§ 130(2) SGB VII; unappointed, your deemed seat is Berlin). 2. Notify the Berufsgenossenschaft within one week of starting (§ 192 SGB VII) → DGUV Unternehmensnummer. 3. Apply to the Bundesagentur für Arbeit for the Betriebsnummer — the application needs the Unternehmensnummer (§ 18i SGB IV). 4. Collect from the employee: Steuer-IdNr + date of birth, Versicherungsnummer (or fire the VSNR query), and their Krankenkasse choice (two-week fallback). 5. Decide the tax question with advice: any § 38(1) attachment point — Betriebsstätte, ständiger Vertreter, a German host bearing the wages? If yes, register with the Finanzamt and set up ELStAM; if no, document the analysis and brief the employee on their § 25 EStG assessment. 6. Set up German-language payroll records, kept in Germany (§ 28f(1) SGB IV). 7. File the DEÜV Anmeldung with the first pay run — six weeks after commencement at the very latest (§ 6 DEÜV).
Quick answers
Can a foreign company with no German entity employ people in Germany?
Generally, yes — German law does not require a German legal entity in order to employ someone who works in Germany. But the two obligation systems answer very differently. Social insurance attaches to the employment in Germany regardless of where the employer sits (§ 3 SGB IV), and for EU-seated employers Art. 21(1) of Regulation (EC) No 987/2009 makes the foreign employer fulfil all employer duties — notably paying the contributions — as if it were seated in Germany. Wage-tax withholding, by contrast, generally only attaches to an employer with a German attachment point: a residence, habitual abode, place of management, seat, permanent establishment or permanent representative within the meaning of §§ 8–13 of the Abgabenordnung (§ 38(1) EStG). Individual facts — a permanent establishment, a permanent representative, a German host company that bears the wages, or labour hire — can flip the tax answer, so take advice on your structure.
Do we have to withhold German wage tax (Lohnsteuer) if we have no office in Germany?
Generally not. The withholding obligation attaches only to an inländischer Arbeitgeber — one with a residence, habitual abode, place of management, seat, permanent establishment or permanent representative in Germany within the meaning of §§ 8–13 of the Abgabenordnung (§ 38(1) EStG) — or to a foreign labour-hire lender. With none of those attachment points, no German wage-tax withholding obligation generally arises, and the employee's German income tax is instead collected through their own year-end assessment (Veranlagung, § 25 EStG). Two traps: any fixed place of business — § 12 AO's non-exhaustive list includes branch offices, other offices, workshops and warehouses — makes you an inländischer Arbeitgeber with the full withholding and ELStAM apparatus; and in secondments the German host company that economically bears the wage becomes the wage-tax employer itself (§ 38(1) sentence 2 EStG), even if it never pays the wage.
Can our German employee take over the social-insurance payments for us?
Partly. Art. 21(2) of Regulation (EC) No 987/2009 lets an employer with no place of business in Germany agree with the employee that the employee performs the employer's contribution-payment obligations; the agreement must be notified to the competent institution, and per the GKV's employer portal the collecting Krankenkasse then arranges the Betriebsnummer and supports the employee. Two limits: the employer's other duties continue unchanged — the arrangement shifts payment, not responsibility — and an employee who has paid the total contribution acquires a statutory claim against the employer for the employer's share of it (§ 28m(4) SGB IV).
What registrations does a foreign employer need before the first German payday?
Work backwards from the order the identifiers impose. First, accident insurance: notify the competent Unfallversicherungsträger (Berufsgenossenschaft) within one week of the start of the enterprise (§ 192 SGB VII) — that produces the 15-digit Unternehmensnummer via the DGUV (§ 136a SGB VII). Second, the Betriebsnummer from the Bundesagentur für Arbeit: the electronic application requires the Unternehmensnummer as an input (§ 18i SGB IV), so accident insurance comes first. In parallel, appoint the German-seat Bevollmächtigter (§ 28f(1b) SGB IV, and named to the UV-Träger under § 192(1) SGB VII), collect each employee's Krankenkasse choice, Steuer-IdNr and Versicherungsnummer, and file the DEÜV hire report with the first payroll run, at the latest six weeks after commencement (§ 6 DEÜV). The tax-side steps — Finanzamt registration and ELStAM access — are only needed where a withholding obligation actually attaches.
The German employer load, carried for you
Ledra Pay's German country pack runs the whole sequence this page describes — the registration chain from Berufsgenossenschaft to Betriebsnummer, German-language payroll records held in Germany, per-Kasse contribution reporting and the DEÜV clock, plus the ELStAM and Lohnsteuer-Anmeldung rail where your structure needs it — so your customers' German employees are onboarded, reported and paid correctly from the first pay run, wherever the employer sits.
See German payroll →Government & statutory sources
- SGB IV norm texts (official DRV Rechtsportal, current versions): § 3 SGB IV (Territorialprinzip); § 28e (Gesamtsozialversicherungsbeitrag); § 28f (Entgeltunterlagen; Abs. 1b Bevollmächtigter); § 28m (Abs. 1 narrow exception; Abs. 4 reimbursement claim).
- DRV Rechtsportal — § 18i SGB IV (Betriebsnummer application; Unternehmensnummer as input); § 28a (Meldungen; Abs. 3a VSNR query); § 28i (Einzugsstelle = the employee's Krankenkasse).
- EUR-Lex — Regulation (EC) No 987/2009, Art. 21(1) and (2) (foreign employer treated as if seated in the competent Member State; employee-takeover agreement).
- EStG — § 38 (inländischer Arbeitgeber; sentence 2 wirtschaftlicher Arbeitgeber; Abs. 3a third party; verified via snapshot of 5 July 2026); § 25 (Veranlagung; snapshot 17 June 2026); § 41 (lohnsteuerliche Betriebsstätte; snapshot 7 July 2026); § 41a (Lohnsteuer-Anmeldung; €1,080/€5,000 thresholds; snapshot 7 July 2026); § 39e (ELStAM; W-IdNr; Abs. 9 transition rule; snapshot 16 June 2026); § 39c (Steuerklasse VI fallback; snapshot 28 February 2026).
- Abgabenordnung — § 12 AO (Betriebstätte definition and list; snapshot 15 February 2026); § 138 AO (notification of opening a business/Betriebsstätte; snapshot 4 May 2026).
- SGB VII — § 130 (Abs. 2 Bevollmächtigter; Berlin default; snapshot 24 April 2024, provision unamended since 2020); § 136a (Unternehmernummer; snapshot 18 April 2024; quoted provisions confirmed unchanged after the amendment in force 6 March 2026); § 192 (one-week notification; snapshot 17 April 2026).
- DEÜV — § 6 (hire report with the first pay run, at latest six weeks; snapshot 18 August 2025, confirmed current).
- SGB V — § 175 (Krankenkasse choice; two-week employer fallback; snapshot 9 February 2026).
- DGUV — Die Unternehmensnummer (UNR.S) (15 digits = 12 + 3; uniform identifier since 1 January 2023; one-week registration).
- Bundesagentur für Arbeit — Betriebsnummern-Service and the BA's Grundsätze zur Betriebsnummernvergabe (PDF, Stand 21 December 2022).
- BZSt — ELStAM (Verfahren, Arbeitgeberpflichten, Zuständigkeiten); ELSTER — Lohnsteuer-Anmeldung form and ELStAM — Informationen für Arbeitgeber und Arbeitnehmer (PDF).
- BMF — Muster für die Lohnsteuer-Anmeldung 2026 (Bekanntmachung of 14 August 2025; Steuernummer as the employer-identifier field).
- Informationsportal für Arbeitgeber (operated by ITSG GmbH for the GKV; secondary source) — Exterritoriale Arbeitgeber mit Firmensitz nur im Ausland (plain-language SV position; Bevollmächtigter can be a Steuerberater or the employee; Einzugsstelle support in Art. 21(2) cases).
Note: the consolidated statute texts on gesetze-im-internet.de were unreachable from our fetch environment at the time of writing. Each provision cited above by its canonical gesetze-im-internet.de URL was verified on 10 July 2026 against a web.archive.org snapshot of that page (snapshot dates noted per source) and cross-checked for currency against the per-section amendment histories; SGB IV/VI and EU-regulation texts were verified live on the DRV Rechtsportal and EUR-Lex.