Moving an Employee from an EOR to Your Own GmbH in Germany

• Not an automatic transfer. § 613a BGB (Betriebsübergang) only applies where a business or part of a business passes to a new owner. Moving one employee alone doesn't meet that test, however much the day-to-day job stays the same.
• The EOR employment ends and a new one begins. You end the service agreement with the EOR and the person's employment with it (by notice or mutual agreement), and your GmbH signs a fresh contract with them.
• Length of service resets with the new employer, for notice periods (BGB § 622) and dismissal protection (KSchG § 1's six-month qualifying period), unless your GmbH's contract explicitly credits the time already worked.
• Pension and social security history carry over automatically, since Germany's system tracks the individual, not the employer. Nothing needs to be done for this.
• Untaken leave must be paid out by the EOR when the old employment ends (BUrlG § 7(4)), not carried into the new contract.
• The AÜG 18-month limit stops applying once the person is your GmbH's direct employee, because the limit is on employee leasing, and there's no leasing relationship once you're the actual employer.

§ 613a BGB is the provision that does move an employment relationship automatically to a new employer, with the new owner taking on the existing contract on the same terms. But it only applies where "a business or part of a business passes to another owner by legal transaction" — the German courts' test asks whether an organised economic unit, not just an individual's job, has changed hands. An EOR's business isn't transferring to your GmbH; you're simply ending a service arrangement with one company and hiring the same person directly through another. That falls outside § 613a.

In practice this means two separate legal events, not one: the EOR employment has to end properly, and your GmbH's employment has to start properly. Each follows its own rules.

• Form the GmbH and get it ready to run payroll before ending anything with the EOR, so there's no gap in employment or pay. See GmbH setup costs and the employer registration steps there.
• Decide whether to credit prior service in the new contract. Nothing requires it, but recognising time already worked (for notice-period length and, in spirit, for the employee's standing) is a common goodwill gesture and a point most employees will ask about.
• End the EOR employment, either by the EOR giving statutory notice under BGB § 622 (the length depends on how long the person has been employed by the EOR) or, more commonly for a planned move, by a mutual termination agreement (Aufhebungsvertrag) setting an agreed end date.
• Settle untaken leave. The EOR must pay out any statutory annual leave the employee hasn't taken by the time their employment with it ends (BUrlG § 7(4)).
• Sign the new contract with your GmbH, effective the next working day if you want no gap. Decide whether to apply a new probation period; the law allows it, but many employers waive it for someone already doing the same job.
• Register the employee with your GmbH's payroll and social insurance, using their existing insurance number; their contribution history carries over automatically.
• End the service agreement with the EOR for that employee, and confirm final invoicing (the last month's fee, any deposit return).

The usual trigger is cost: once your German headcount is big enough that a GmbH's running costs beat the EOR fees they'd replace, moving makes financial sense. See EOR vs local entity for that break-even, and GmbH running costs for what the ongoing bill looks like.

The other trigger is the AÜG 18-month limit itself: if you want to keep someone working under your direction for longer than that through an EOR, you generally need your own entity, not just a cost comparison. See AÜG and EOR in Germany.