Monthly Dose of Germany: December 2024

Japanese Companies and Employees in Germany - Navigating Immigration Laws

Employers in Germany have the following immigration law obligations when employing foreign employees:

𝗗𝘂𝘁𝘆 𝘁𝗼 𝗩𝗲𝗿𝗶𝗳𝘆: Ensure that the employee has a valid residence permit with the appropriate work authorization.
𝗗𝘂𝘁𝘆 𝘁𝗼 𝗥𝗲𝘁𝗮𝗶𝗻: Keep copies of the residence permit and work authorization during the period of employment.
𝗗𝘂𝘁𝘆 𝘁𝗼 𝗡𝗼𝘁𝗶𝗳𝘆: Inform the relevant immigration authority in case of early termination of employment.

This article explains how Japanese companies can navigate through the complex immigration law landscape, what Japanese employees should consider when working in Germany.

Remainders of the national bank levy – Where to put it?

The collapse of Germany's Traffic Light Coalition (eponymously named after the political colours of the parties forming it) has significant legislative consequences—not least for the extensive pipeline of financial legislation. One pressing issue concerns how the remaining funds from the original national bank levy are to be used. Between 2011 and 2014, banks were required to pay this special levy into the federal special-purpose Restructuring Fund (RSF).

In the meantime, a European solution, the Single Resolution Fund (SRF), was established. In 2016, a substantial amount of the RSF’s assets was transferred to the SRF. However, an amount of € 2.3 billion remains in the RSF and under current legislation is for all intents and purposes ‘useless’.

Initially deemed a Luxury Problem, the issue has reached an impasse since the special-purpose nature of the bank levy (Sonderabgabe) places strict constitutional limits on its use. Funds raised must be mandatorily applied to their designated purpose. However, the € 78 billion overfunding of the SRF has already more than achieved this aim. So what can be done?

Article in Börsen-Zeitung, published 14 December 2024 by Dr Mathias Hanten and Dr Moritz Maier

New information system for the EU Deforestation Regulation (EUDR)

With the EU Deforestation Regulation Information System (EUDR), the European Commission has created a platform for companies affected by the EU Deforestation Regulation. The aim of this system is to provide a platform for companies affected by the EUDR to submit mandatory due diligence declarations for affected products and commodities.

From the end of 2025, affected companies will be required to ensure that certain commodities and products meet the requirements of the EUDR. If the necessary information cannot be obtained, or if doubts remain, the products may not be allowed to be imported into the EU or placed on the market. This poses a huge risk to the supply chains involved.

Update: Adjustment (check) of pension benefits according to Section 16 BetrAVG

The current economic framework conditions and above all the – even taking into account the recent weakening still – persistent inflation trend continue to have a material impact on the adjustment of pension benefits from company pension schemes commitments in accordance with Section 16 BetrAVG. Employers who - when the economic situation permitted - have in the past adjusted pensions in line with the development of the consumer price index (CPI, Section 16 (2) no. 1 BetrAVG) are still facing considerable additional expense in the current financial year in view of an inflation rate of up to 6.9% in the last 3 calendar years if the adjustment continues unchanged. This Client Alert provides an update on the specific structuring options and the employers' information obligations, in particular in the event of non-adjustment.

New draft by EU-Commission: FAQs on the EU Taxonomy Regulation

The European Commission has recently published a draft of a new FAQ (Frequently Asked Questions) on the application of the EU Taxonomy Regulation. It covers various aspects of the Regulation and provides background information and focuses on three main areas:

1. Scope: Who is covered by the obligations of this Regulation and what types of economic activities are affected?
2. Disclosure requirements: What information do companies and financial market participants have to disclose and what is the disclosure process?
3. Technical review criteria: How will the technical review criteria be applied?

In this article, we'll highlight some of the key points of this FAQ to help businesses understand it better.

Transaction News

We at Deloitte Legal Germany are constantly advising on numerous complex transactions and challenging projects.

We would be delighted to explain our services portfolio to you and discuss with you how we at Deloitte Legal Germany can assist you with your projects, whether in the field of Corporate Reorganizations, M&A transactions, including carve-outs, general commercial, employment law, IT/IP or LMC/LMS. Just reach out to us!

In order for you to better understand how we have helped other clients, we would like to hereinafter showcase information on four projects that our teams have recently advised on.

Deloitte Legal advises Vonovia on another residential real estate fund with HIH Invest for 500 million euros
The Deloitte Legal Real Estate team led by Berlin partner Dr. Katja Schwenzfeier has again advised DAX-listed Vonovia SE (Vonovia) on the sale and transfer of a real estate to a fund set up specifically for this purpose, in which Vonovia, Germany's largest residential real estate company, and HIH Invest Real Estate GmbH (HIH Invest) participate.

Read more

Deloitte Legal advises Main Capital Partners on the sale of JobRouter to Aptean 
A Deloitte Legal team co-led by partners Max Lüerßen and Felix Felleisen (both Corporate/M&A, Düsseldorf) has advised strategic software investor Main Capital Partners and its co-shareholders on the sale of the JobRouter Group to Aptean. 

Read more

Deloitte Legal advises Hannover Finanz on the sale of its stake in chemical distributor OQEMA
Deloitte Legal partners Dr. Harald Stang (lead) and Dr. Maximilian Habel (both Corporate/M&A, Hanover) advised Hannover Finanz on the successful sale of its long-standing stake in OQEMA AG.

Read more

Deloitte Legal advises Endurance Overseas s.r.l. on the acquisition of Stöferle GmbH and Stöferle Automotive GmbH 
An international multi-disciplinary and multi-location Deloitte team led by Frankfurt-based Deloitte Legal Corporate/M&A Partner Marc Oliver Stock advised Endurance Overseas s.r.l. (Endurance) on the acquisition of majority participations in Stöferle GmbH and Stöferle Automotive GmbH. Commercial terms of the transaction were not disclosed. The transaction is subject to clearance by several antitrust authorities.

Read more

Deloitte Legal Webcast Series

In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.

In our upcoming "Legal Update" webcast we will discuss:

Deloitte Legal Webcast "Legal Update #01/2025 - Data theft and litigation avalanches | How can companies meet the new challenges and what contributions can technology and AI, in particular the JUNE AI & Automation Case Management System, make?" 

Wednesday, 22 January 2025 | 11:00 - 12:00 a.m.
Register here (Webcast in German language)

A landmark decision by the German Federal Court of Justice has made it easier for individuals affected by data leaks to recover damages for loss of control over their data. To avoid liabilities and mass litigation resulting from data leaks, organizations can leverage the latest technology and AI-based tools. These tools can help strengthen data protection, detect and prevent unauthorized access, manage incidents, ensure compliance, and improve overall security measures. By leveraging these tools, organizations can mitigate risk and defend against potential legal consequences.

In our Deloitte Legal Update Webcast on January 22, 2025, Thomas Northoff (Deloitte Legal) and Katja Nikolaus (June) will discuss the BGH decision and its implications for companies, particularly with regard to liability risks. In addition, they will present our JUNE AI & Automation case management system and demonstrate how it can help companies efficiently manage their legal defense in response to the BGH decision.

You can download the presentations of our recent webcasts here:

• Legal Update Webcast #22/2024 - Get Ready for 2025: In the 2024 year-end webcast, our legal experts, Dr. Julia Petersen and Anna Reshetina-Korkhova, discussed key legal developments that would impact businesses in the coming year. They covered topics such as the Justice Location Strengthening Act and the introduction of (International) Commercial Courts in Germany, the Fourth Bureaucracy Relief Act, the Act Implementing the Corporate Sustainability Reporting Directive (CSRD) and other developments in the area of corporate social responsibility, and updates on employee participation in the SE.  Dr. Alexander Börsch, Chief Economist and Director of Research at Deloitte Germany, provided an outlook on the economic and trade policy landscape. He focused on the possible effects of the measures announced by President-elect Donald Trump on German companies.

• Legal Update Webcast #21/2024 - Insolvency and its effects on commercial leases - The tenant easement as a hedging instrument: The number of corporate insolvencies has increased due to factors such as the COVID-19 pandemic, legislative measures, challenging economic conditions, and higher financing costs. These economic difficulties have had significant impacts on long-term contractual relationships, especially in commercial lease agreements. Insolvencies on either the tenant or landlord side have had far-reaching consequences for the other party involved, making it important to carefully consider the effects of insolvency and available security instruments. In our webcast Rebecca Gulden and Dr. Anselm Reinertshofer provided an overview of insolvency proceedings, covered the impact of insolvency on leases (continuation, termination options), and the effect of insolvency on rental security deposits, building cost subsidies, claims for damages, and the landlord's lien and highlighted the use of the vdp pattern. 

In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.

Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.

EMEA Dbriefs Webcast

Legislative forces for change impacting global talent and mobility (Employment Law series)

Tuesday 28 January 2025 (Moved from 20 November 2024) | 12:00 GMT/13:00 CET

Register now for our EMEA Dbriefs Legal Webcast  in English language! The global talent and mobility landscape faces legislative changes which will impact the UK and across the European Union. Traditional global mobility programmes will need to adapt with changes including legislative reforms for non-domiciles, the need for increased transparency for pay equity, and employments rights. What should your organisation be looking at?

Register here