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Your PWWL editorial team
Christine Wahlig
Attorney at law
Editorial Management
Alice Tanke
Marketing Manager
The use of external personnel, in all its forms, has become an integral part of the labour market. Where national immigration law and other regulatory frameworks allow it, this special form of employment also participates in the increasing internationalization of the labour market. Within the European Economic Area, this development is facilitated by the European single market. The following article examines the role played in this context by the freedom to provide services, anchored in primary EU law (Articles 56 and 57 TFEU), when deploying third-country nationals, and highlights recent developments in this field.
As a general rule, any foreign national wishing to stay in Germany for the purpose of employment requires a residence permit specifically authorizing such activity (§§ 4a (1) in conjunction with 4 (1) of the German Residence Act – AufenthG).
Third-country nationals – meaning individuals who are neither EU nor EEA citizens – do not enjoy the freedom of movement rights granted to Union citizens. Consequently, they typically require a residence permit including work authorization in order to live and work in Germany.
An important and often overlooked point is that a residence permit issued by another EU Member State under its national law does not automatically entitle third-country nationals to work in Germany. Immigration law within the EU is largely not harmonized. Each Member State independently regulates access to its labour market.
The absence of freedom of movement for third-country nationals becomes particularly relevant in the context of cross-border service provision.
For example, if a Bavarian construction client commissions a Czech company to carry out work in Waldmünchen, this is easily possible thanks to the fundamental freedoms guaranteed by EU law. Naturally, the Czech contractor may deploy its Czech employees to perform the work for the Bavarian client without requiring German residence permits for employment purposes. Czech nationals are EU citizens and therefore have the right to enter and reside in Germany for employment under § 2 (2) of the Freedom of Movement Act/EU (FreizügG/EU).
However, if the same contractor employs third-country nationals with valid Czech residence permits, the internal EU borders suddenly become noticeable again. These workers generally require a German residence permit authorizing employment in Germany.
Practical note:
Although such third-country nationals could apply for a German residence permit for employment purposes, the procedure is bureaucratic, time-consuming, and often unsuccessful for individuals who do not qualify as skilled workers within the meaning of § 18(3) AufenthG. The fact that a worker gained access to the Czech labour market does not mean that they will also meet the requirements for a German residence permit, due to the lack of full harmonization of EU immigration law.
For temporary postings in the context of cross-border service provision, the Vander-Elst visa is intended to resolve this dilemma.
The legal basis for issuing such visas is found in §§ 6 and 7(1) of the Residence Act in conjunction with the CJEU guidelines from the Vander-Elst judgment. Approval by the Federal Employment Agency is not required (§ 21 of the Employment Regulation – BeschV).
The possibility of temporarily posting third-country nationals to another EU Member State for the purpose of providing services originates from a 1994 judgment of the Court of Justice of the European Union (CJEU) in the Vander Elst case (C-43/93).
In that case, a Belgian employer temporarily deployed third-country national employees legally employed in Belgium to carry out work in France without obtaining an additional French work permit. French authorities initiated proceedings against the employer. The CJEU held that this constituted a restriction on the freedom to provide services and clarified that such employees may be deployed temporarily in another Member State without obtaining an additional work permit there.
Member States are allowed to verify whether national and EU rules governing the provision of services are complied with. However, such checks must be conducted swiftly. Delays or excessively extensive checks constitute an unlawful restriction of the service provider’s freedom to provide services.
Practical note:
Unlike many other Member States, Germany conducts these checks before the cross-border activity begins. Even if third-country nationals already hold a valid residence permit or long-term visa issued by another Member State, they must still apply for a Vander-Elst visa at the competent German diplomatic mission before being posted for short-term work.
Entering Germany to take up employment without such a visa may lead to administrative offences or even criminal consequences (e.g., § 404(2) No. 4 SGB III in conjunction with § 4a(4) AufenthG; § 95(1a) AufenthG; § 11(1) No. 2b of the Act to Combat Illegal Employment).
Germany’s current practice regarding Vander-Elst visas is under scrutiny. A central issue is the administrative practice of the Federal Foreign Office.
Many German diplomatic missions openly state processing times ranging from one to several weeks (Warsaw), two weeks (Zagreb), or even three to four weeks (Madrid). In many cases applicants must appear in person and book an appointment. However, the online booking systems frequently show no available appointments for the next two months (e.g. Bratislava). At the German embassy in Lisbon, applicants are first required to submit an online contact form in order to receive information on the application process.
Practical note:
The European Commission considers this additional visa requirement to be a restriction on the freedom to provide services under Article 56 TFEU in conjunction with Article 21 of the Schengen Implementing Convention, which allows visa-free entry for up to 90 days within a 180-day period.
On 30 January 2026, the Commission therefore initiated infringement proceedings against Germany by issuing a letter of formal notice (INFR(2025)4025). Germany must respond within two months.
The position of the European Commission is also supported by German courts. In its decision of 26 March 2025 (3 B 1615/23), the Higher Administrative Court of Kassel strongly criticized this practice. The court relied on the CJEU judgment in Santos Palhota (C-515/08), according to which even a waiting period of five days may constitute a disproportionate restriction on the freedom to provide services if no possibility of exception or accelerated procedure exists.
Beyond the question of compliance with EU law, the Kassel court also addressed another highly relevant practical issue.
When applying for a Vander-Elst visa, German diplomatic missions typically require the submission of a detailed service contract between the foreign service provider and the German client company, specifying the beginning and end of the work.
This requirement raises particular questions in the context of temporary agency work. In such cases, the “service” provided is not a contractually defined result but rather the temporary supply of labour. This raises the question whether pure personnel supply constitutes a “service” within the meaning of EU law.
The court held that a service within the meaning of Article 56 TFEU may also consist of a temporary work agency established in one EU Member State posting a worker to a company in another Member State, provided that the employment relationship with the agency continues during the posting.
Article 56 TFEU protects not only the posting employer but also, derivatively, the employees lawfully employed by that employer — including third-country nationals.
Practical note:
On the basis of this case law, employers may cover temporary staffing needs using agency workers who are third-country nationals, provided that they are lawfully employed by agencies established in another EU Member State and posted from there.
Apart from obtaining a valid Vander-Elst visa, these workers do not require an additional German work permit and cannot be subjected to a prior labour market test.
The Federal Foreign Office’s visa handbook appears to recognize this in principle. It explicitly refers to temporary agency work in the context of the requirement of “lawful employment” in the state where the employer is established.
However, the handbook treats as problematic situations where the posted employee has no main activity in the employer’s home state or in other Member States. One indicator mentioned is where the duration of the residence or employment permit in the home state exactly coincides with the posting period in Germany.
This refers to cases in which the posted third-country national employee is not economically integrated in the employer’s home state or elsewhere in the EU. The home state merely serves as a formal connection, while the employee is in fact recruited solely for deployment in Germany.
Authorities are thus targeting “transit employment models” or pure posting platforms – companies that do not carry out genuine economic activity but merely serve as vehicles for cross-border labour supply.
Practical note:
Against this background, the Federal Foreign Office’s position can be interpreted to mean that the Vander-Elst privilege should only apply where temporary agency work is ancillary rather than the main service.
From a doctrinal perspective, this approach is understandable. Preventing abuse is legitimate under EU law. The Vander-Elst case law was not intended to facilitate constructions designed solely to circumvent national immigration rules.
However, problems arise where the intensity of the review effectively amounts to a separate labour-market admission decision. If the absence of a “main activity” in the home state is treated as a rigid exclusion criterion, a legitimate anti-abuse mechanism risks turning into a structural restriction on market access.
If, as the Kassel court held, temporary agency work itself falls within the EU concept of services, its cross-border nature cannot simultaneously be treated as evidence of abuse. If the supply of labour is a protected service, it cannot be considered improper that agency workers are recruited precisely for the purpose of providing their labour on the German market for profit.
Put differently: “It’s not a bug – it’s a feature.”
The legal framework surrounding Vander-Elst is currently undergoing significant developments. It remains to be seen how Germany will position itself in the ongoing infringement proceedings concerning its visa practice. At present, it appears unrealistic that the structural deficiencies in visa processing will be resolved in the short term.
For staffing companies established in EU Member States with more liberal labour migration regimes and clients in the German market, the courts’ recognition that the Vander-Elst regime may also apply to genuine temporary agency work is of considerable interest. There are strong arguments in favor of strategically testing such constellations and, in the event of a negative decision, considering legal action.
Finally, it should be noted that temporary agency work is regulated across Europe and is subject to the respective national implementations of the Temporary Agency Work Directive (2008/104/EC). These regulations must of course also be considered when structuring and implementing the contractual relationship in practice.
