I have been advising German-speaking entrepreneurs on emigration for more than two decades. I left Germany myself in 2000. I have lived in Switzerland, the UK, the United States, Malta, and Ireland. I have helped hundreds of clients navigate the process of leaving.
This article was originally published on 15 November 2025 on The Brief at sebsauerborn.com.
And there is a set of things that virtually nobody tells you before you go. Not your tax advisor. Not the YouTube expats. Not the relocation consultants who want to sell you a package.
This is what I wish someone had told me, and what I now make sure to tell every serious client before they start the process.
The First Thing: Germany Does Not Let Go Easily
Germany operates a worldwide taxation system. As a German tax resident, you are taxed on your global income, wherever earned, wherever held. That part most people know.
What fewer people understand is the exit tax.
Under German law, if you hold shares in a corporation worth more than a certain threshold when you leave, the state treats your departure as a deemed disposal. You are taxed on the unrealised gain as if you had sold those shares on the day you left, even though you have not sold anything, received any cash, or actually realised any value.
The current threshold is low enough to catch a substantial number of entrepreneurs with growing businesses. And the gain is calculated on the difference between the original acquisition cost and the fair market value at the date of departure. If you built a company from zero and it is now worth a few million euros, the exit tax exposure can be very significant.
You cannot simply pack your bags and leave. You need to plan the exit carefully, often years in advance.
There are legal ways to manage exit tax exposure. Instalment arrangements in certain cases. Restructuring before departure. Timing the move relative to valuation events. But none of these are simple, and all of them require proper professional advice well before the move date.
The Second Thing: Residency Is Not the Same as Tax Residency
This distinction trips up more people than almost anything else.
You can move your family to Dubai, open a bank account there, rent an apartment there, and obtain a UAE residence visa. And you can still be a German tax resident.
German tax law does not look primarily at where you have a visa. It looks at where you have your centre of vital interests. That means: where is your family? Where is your economic activity? Where do you maintain an apartment or house? Where do your children go to school? Where do you spend most of your time?
If you move to Dubai but your spouse and children stay in Munich, if you keep your German apartment, if your business activity is primarily conducted with German clients, a German tax authority auditor will look at that situation and conclude that your centre of vital interests remained in Germany throughout.
You have not left. You have just added a UAE address.
Real exit from the German tax system requires a genuine and demonstrable shift of your life. That does not mean you can never visit Germany again. But it does mean that the connections to Germany must be genuinely and provably secondary to your new life elsewhere.
The Third Thing: The Six-Month Rule Is a Myth
One of the most persistent myths in expat circles is the idea that you become non-resident somewhere after spending fewer than 183 days there per year. Germany's 183-day rule in certain tax treaties relates to employment income. It does not automatically sever German tax residency.
German residency for tax purposes is determined primarily by whether you maintain a home (Wohnsitz) or habitual place of abode (gewöhnlicher Aufenthalt) in Germany. If you have a flat in Frankfurt that you return to periodically, even infrequently, Germany may argue that you have maintained a Wohnsitz.
The practical implication: before you leave, terminate your German leases or sell your German property, or be prepared to make a very clear legal case that any remaining German property is not your home.
The Fourth Thing: Where You Go Matters as Much as Where You Leave
Not all jurisdictions are equally useful for Germans leaving Germany. The choice of destination interacts with German tax law in important ways.
Germany has double tax treaties with most countries. These treaties determine which country has the right to tax which types of income. But they do not automatically override the exit tax, and they do not automatically resolve the question of where your tax residence lies during a transition period.
Some jurisdictions are significantly better suited to receiving German emigrants than others. Here is my honest assessment of the main options:
UAE (Dubai): Excellent for entrepreneurs with no German-source income. Zero personal income tax. No capital gains tax. Strong banking infrastructure. The Germany-UAE double tax treaty expired in 2021 and has not been renewed, which creates some complexity around the treatment of German-source income. For those who are genuinely moving their entire operation out of Germany, this is manageable. The key is to be genuinely there: physical presence, family, business, substance.
Malta: Useful for those who want to remain within the EU. The non-dom regime allows foreign income to be taxed only on remittance, at relatively low rates. The 15% flat rate for certain high-net-worth applications is attractive. However, Malta is small, expensive by local standards, and the practical quality of life can disappoint those who expected Mediterranean paradise. The Malta LLC trap, where people set up Maltese structures that inadvertently create worldwide tax exposure, is real.
Switzerland: The Swiss lump-sum tax (Pauschalbesteuerung) remains one of the most underappreciated legitimate tax tools in Europe for wealthy foreigners. If you are not Swiss and you do not work in Switzerland, you can potentially agree a tax assessment based on your living expenses rather than your actual income or wealth. For the right profile, this is exceptional. But it requires significant assets and a genuine commitment to Swiss residence.
Portugal: The NHR regime, now replaced by the IFICI (NHR 2.0), has been modified significantly. The original NHR was extraordinarily generous. The replacement is more targeted and requires active engagement in qualifying activities. It still has value but is no longer the straightforward choice it once was.
Paraguay: Territorial taxation. Low cost of living. Residency relatively easy to establish. For those comfortable with a genuinely different lifestyle, it offers real freedom at a fraction of the cost of European alternatives. Not for everyone, but for the right person, excellent.
Georgia (the country, not the US state): Territorial taxation. Joined CRS in 2023 which requires more careful structuring around banking, but remains an attractive option for the right profile. Low flat tax on local income. Low cost of living. The geopolitical proximity to Russia is a risk that needs honest assessment.
The Fifth Thing: Banking Is Going to Be Harder Than You Think
When you leave Germany, you will eventually lose access to your German banking relationships. German banks do not like non-resident clients. Some will close your account. Others will limit the services available to you.
You need to establish international banking before you leave, not after. And you need to do it while you still have a German address and German banking history, because non-resident account opening is significantly harder in most jurisdictions.
The practical sequence: establish your destination country banking first. Then establish a backup in a neutral jurisdiction — Switzerland, Singapore, UAE. Then manage the wind-down of your German banking relationships in an orderly way.
CRS (the Common Reporting Standard) means that your foreign accounts will be reported to German authorities during the transition period. This is not a problem if your affairs are structured correctly. It is a significant problem if you are trying to hide anything, and I strongly advise against trying to hide anything, both for legal and practical reasons.
The Sixth Thing: Your Business Structure Will Need to Change
Most German entrepreneurs operate through a GmbH. When you leave Germany, the treatment of that GmbH changes significantly.
If the GmbH's management and control is in Germany, it remains a German tax resident regardless of where you live. If you, as managing director, continue to manage the GmbH from your new location, you need to think carefully about whether you have created a permanent establishment in your new country.
The cleanest solution for most entrepreneurs is a restructuring of the business before or concurrent with the emigration. This might mean establishing a new holding structure in a more neutral jurisdiction, transferring operating functions to a new entity in the destination country, or transitioning the business to a location-independent structure.
This is not a simple process. It takes time, proper advice, and careful execution. But it is far preferable to discovering, two years after you moved, that your "foreign" business is still a German tax resident by virtue of where its management decisions are made.
The Seventh Thing: Timing Is Everything
The German tax year is the calendar year. Exit tax is triggered at the moment of departure. Residency status is assessed by the German authorities on a year-by-year basis.
This means that if you leave Germany in December, you have been a German tax resident for eleven months of that year. If you leave in January, you have been a tax resident for one month. The difference, in terms of which income is subject to German taxation, can be very significant.
More importantly, the exit tax is calculated at the point of departure. If you are planning a business sale or liquidity event in the next few years, the timing of your departure relative to that event is one of the most important variables in the entire planning exercise.
Leave before the value crystallises, not after.
The Eighth Thing: Get Professional Advice Early
I say this not to generate business for myself, though I am available for consultations. I say it because the number of people I have seen who planned their own emigration and got it badly wrong is larger than I would like to admit.
The mistakes are almost always the same: moving too quickly, underestimating the exit tax exposure, failing to establish genuine residency in the new location, not thinking through the banking transition, and leaving business structures unreformed.
All of these mistakes are avoidable with proper planning. None of them are avoidable after the fact without significant cost, complexity, and in some cases, legal risk.
Germany is not a country you can leave casually. The state has a long memory, significant enforcement capacity, and a legal framework that is designed to ensure that high earners do not exit without paying what the state believes they owe.
Plan carefully. Move decisively. And get proper advice before you do either.
Work with Sebastian
If you are seriously considering leaving Germany, Switzerland, or Austria, and you want to understand exactly what your exit tax exposure is, what jurisdictions make sense for your profile, and how to structure the transition properly, this is exactly what I do. I have done it myself. I have helped hundreds of clients do it. Let's talk. Book a consultation.