Germany’s New Laws and Visas: Opening Doors for Indian Students and Skilled Professionals

TL;Dr

Germany has always been a top destination for international students, and now, it’s even more attractive. Recent changes in Germany’s immigration laws reveal the country’s growing hunger for skilled professionals.

• Starting March 1st, Germany’s Skilled Immigration Act has been expanded and simplified. International students, apprentices, and skilled professionals can now work up to 20 hours per week, even before their courses begin. These new rules allow student visa holders to work part-time jobs nine months ahead of their academic courses. Apprenticeship applicants benefit too, and graduates can more easily transition into full employment and residency.
• On January 19th, 2024, a new citizenship law was passed, easing naturalisation pathways. Foreign nationals can now apply for German citizenship after five years of residency, and those with ‘special integration achievements’ can qualify in just three years. This law also allows for dual citizenship, making it easier for Indian students to retain their Indian citizenship while becoming German citizens.
• On June 1, 2024, the Chancenkarte, or Opportunity Card was introduced. This visa acts as a job search permit for up to one year, favouring international graduates from German institutions.

All this is excellent news for those seeking better opportunities. However, while other countries are tightening their immigration policies, why is Germany opening its doors wider? Read the full article to know more.

Germany’s New Laws Invite International Students and Workers

Germany’s Skilled Immigration Act has been expanded and simplified. As of March 1, this year, international students, apprentices and skilled professionals may work 20 hours per week. This applies to persons coming to Germany to seek admission in an institute of higher education or vocational training or to study German or enrol in a foundation course preparatory to university/vocational institute admission. The new provisions also make it easier for persons who have completed their studies in Germany to transition into residency and full employment.

Indian students in Germany who would like to work in the country will also be benefitted by the new citizenship law, passed on 19 January 2024. It eases naturalisation pathways and allows a person from a non-EU country to gain German citizenship and retain the citizenship of their home country. Foreign nationals in Germany can apply for German citizenship after five years of residency, a notable reduction from the current requirement of eight years. In fact, the wait-time can be even shorter. Persons deemed to have “special integration achievements” can get German dual citizenship after 3 years.

And, on June 1, a new type of visa called the Chancenkarte (Opportunity Card) became available. This visa is initially issued as a job search permit for up to one year, giving the applicant the opportunity to seek employment in Germany.  It specifically favours international students who have graduated from a German institution of higher education. Check out full details about Chancenkarte (Opportunity Card) for jobseekers in germany.

Even before the new laws and visas, Germany was an attractive destination for Indian students – particularly those preparing for careers in engineering, electronics or any of the sciences. 

Of the total 458250 foreign students in Germany in 2022-23, 42,578 were Indians – nearly 10 per cent. They became the biggest single group, outnumbering even the Chinese students. Of these Indian students, 90 percent were in courses related to science, technology, engineering and mathematics. Classic STEM !

Many of them are already working – at least to the extent of the legal 20 hours a week and the day that they graduate they will be ready to slide into the country’s tech industries.  As of end-December, more than seven million jobs were on offer in all kinds of fields as per a reputed research agency.

For quite a long time now, the media has reported “narrowing gateways”, particularly in the English-speaking countries, Britain, Canada and Australia. In these countries, political parties and politicians have been seeking power by harping on the so-called “immigration threat”. It’s an issue in the USA too, although American conservatives appear to be allergic only to people from Mexico, Guatemala, El Salavador, Costa Rica and Haiti.

By actively seeking, not only international students but also high-skilled immigrants, Germany is moving in exactly the opposite direction. Why?

Reason: Germany’s birth-rate is falling.

So? Isn’t that a good thing? For decades, people in India have been harangued about population explosion. Hum do, hamare do is written on trucks, buses, walls and hoardings.  Some states have enacted legislation to penalize people with more than two children. Back in the ’70s, the government even launched a coercive sterilization campaign. 

It is possible to have too many people, but it is also possible to have too few. What nations need is an age-balanced population. This brings us to the dependency ratio, i.e., the number of elderly people as a ratio of the number of people of working age.  

We found figures for the EU’s dependency ratio. 

These figures show that Europe’s dependency ratio will surge from 33 percent in 2023 to 60 per cent by the end of the century. Whereas in 2000 there were five gainfully employed persons for every old-age pensioner, in 2020 there were only 2.7 gainfully employed persons. The baby boomers who are now retiring will reduce this ratio to 1:2 by 2030.  The demographic share of Germans aged 60 or older will increase by about 16 percent by 2030 and by 26.5 percent by 2050.

These population statistics can be expressed in monetary terms too: without intervention to improve the dependency ratio, Germany’s GDP per capita will be lower by 14.7 percent by 2050.

The aging of society can be counteracted if women have more children … but this cannot be forced, or even induced, as shown by the example of Japan. 

Since 2000, Japan has increased family support from 0.5 per cent of GDP to the present 2 percent, but the Japanese birth-rate has not budged from about 1.3 children per woman. With a fertility rate of 1.53 per woman, Germany is well below the 2.1 children needed to reproduce society. Given its present birth-rate, by 2050 every young married couple living in Germany will have to earn a pensioner’s living in addition to their own – and finance their own children too.

A nation of oldies has another negative consequence: productivity falls. As the number of elderly grows, national growth slows down. The country becomes less productive, the innovation rate falls and the nation ceases to be competitive vis a vis younger economies. Fewer people in the workforce means less money coming into state coffers, even as the outlay for healthcare and pensions increases. The country has less to invest in renewable energy and cutting-edge technologies. 

If the birth-rate can’t be improved (at least not in a modern democracy) the other way to keep a society young and vigorous mentally and physically is to attract immigrants — preferably highly skilled immigrants. 

[Actually, the German economy has been dependent on guest workers since the early 1960s. In those years, the majority of immigrants were from Turkiye. In 2019, Germany officially defined itself as “a country of immigration”.] 

To keep the old-age dependency ratio constant through migration, Germany needs an influx of well-educated or at least quickly trainable people of working age. Economists estimate the need at an annual average of 1.5 million net immigrants until 2030. By 2050, this figure will be around 9,00,000.

And to ensure that productivity does not fall, these immigrants will have to have the same productivity immediately after immigration as someone already employed in Germany. 

This explains German’s new Skilled Immigration Act, changes to citizenship rules and the new type of visa. It also explains Germany’s receptivity to international students. Public universities are tuition-free and the quality of instruction is excellent. When comparing countries as a preferred destination, Germany offers a very high “price/performance ratio”, Only the USA outranks Germany as a destination for students – particularly those pursuing STEM courses.

However, students only increase a country’s productivity if they STAY in the country after graduation. Five years after graduation, only every second foreign student is still in Germany.

At present, where do Germany’s students want to go? The USA and Canada lead the preference list followed by Britain. This is partly explained by language bias. But language is not the only factor. The attractiveness as a country of immigration is closely linked to a low tax wedge, i.e. what the employee has to give up from his or her salary due to taxes and social security contributions. For example, even Sweden and Norway outrank Germany on the preference list … because income is not so highly taxed. So far, German Federal Chancellor Olaf Scholz rejects suggestions that lower taxation might be useful to attract talent from abroad, and declares that German taxation is in no need of adjustment. He has been saying this since he was Federal Minister of Labour in the Angela Merkel government.

All of this explains Germany’s efforts to overcome its problems of economic stagnation and ageing population. The rationale is clear. But governments are not in the hands of wise and reasonable people, they are in the hands of politicians whose motive is to retain or seize the helm of government and who in turn derive their power from voters. 

Presently, Germany is showing a smiling face to international students and workers. Could this change? 

A far-right the party, Alternative für Deutschland, received 16 percent of the vote in the European Parliament elections in Germany on June 1, a five-point increase over the 2019 elections. AfD is now the second-largest German party in the legislative branch of the European Union. However, the far-right bloc is not the largest in parliament, trailing both the center-left and center-right.

Meanwhile, German economists warn that millions of job vacancies need filling, and government ministers describe the labour shortage as the country’s biggest problem.

This spells opportunity for Indians who would like to study and work in Germany. If the person is young, skilled, German-speaking, the new laws mean less red tape and ease of transition. For those intending to settle in Germany, the government has adopted a Canada-style points system and set up incentives such as being able to bring not only spouse and children, but also parents.

German society is increasingly diverse. More than a quarter of the population in Germany is either foreign-born or has at least one foreign-born parent.  As for the political climate, mainstream sentiment is not with the far-right, and both economists and the government are saying a big Willkommen!