Germany offers a stable and highly regulated financial system, making it an attractive place to invest — even for newcomers. However, investing as an expat in Germany can feel complex due to unfamiliar language, tax rules, and the structure of financial products. Here’s a straightforward guide to help you get started.
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At Finanz2go, we specialize in providing transparent, independent financial advice tailored to the needs of expats, employees, and self-employed professionals living in Germany. Based in Berlin, we are certified under §34f GewO and committed to helping our clients make informed long-term financial decisions.
1. Understand Your Residency Status
Before investing, you need to determine whether you’re considered a tax resident in Germany. If you’ve registered your residence (Anmeldung) and live in Germany for more than 183 days per year, you’re generally seen as a tax resident. This means you’re subject to German tax law, including taxes on global investment income.
2. Choose the Right Investment Account
Most expats in Germany open a Depotkonto (securities account) with a bank or online broker. Popular options include:
- Trade Republic (simple, mobile-first, low fees)
- Scalable Capital (ETF portfolios and robo-advisor)
- ING Germany or Comdirect (more traditional banks with English-friendly service)
These platforms allow you to buy ETFs, stocks, mutual funds, and other securities.
3. Focus on Tax-Efficient Products
Germany offers a €1,000 annual tax exemption (Sparer-Pauschbetrag) for capital gains and dividends. Beyond that, investment gains are taxed at 25% plus solidarity surcharge and possibly church tax.
Many expats choose accumulating ETFs (which reinvest dividends) over distributing ETFs to minimize annual tax burdens. Some brokers handle tax reporting automatically, which is helpful if you’re not fluent in German.
4. Start with Simple Investment Strategies
If you’re new to investing, start with a global ETF portfolio. A simple and widely recommended approach is a single ETF tracking the MSCI World or FTSE All-World index. These offer global diversification with minimal effort.
Alternatively, consider a robo-advisor like Scalable Capital or Quirion. These platforms build and manage your portfolio based on your risk profile — ideal if you prefer a hands-off approach.
5. Consider Currency and Long-Term Goals
If you earn in EUR and plan to stay in Germany long-term, it makes sense to invest in EUR-based products. However, if you expect to return to your home country, consider how currency fluctuations might affect your long-term returns.
Also, think about whether your investments will complement or replace retirement contributions from the German system (Deutsche Rentenversicherung), especially if you’re self-employed or not contributing to it.
6. Get Support When Needed
While there are many DIY options, you may prefer to work with a fee-based financial advisor who specializes in serving expats. This is especially helpful if you have assets or income in multiple countries.
Look for advisors who:
- Are independent (not commission-based)
- Speak English fluently
- Understand cross-border tax issues
Final Thoughts
Investing in Germany as an expat is not only possible — it’s often smart. With a solid understanding of your residency status, the right investment account, and a tax-aware strategy, you can start building long-term wealth while living abroad. Start small, keep learning, and don’t hesitate to seek help tailored to your unique situation.
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