Jews desired or tolerated in the land received, upon application to the state government, a sovereign toleration and residence permit, which was most frequently referred to as a privilege, less commonly as a concession or letter of protection. Such Jews were therefore called licensed Jews or protected Jews and were considered domestic Jews, and their descendants as "native-born" Jews.
This privilege carried the right to establish a permanent residence at a predetermined location in the land with one's own family. At the same time, the right to trade for one's livelihood was also determined, which was strictly regulated. This inevitably gave rise to the occupations typically found among the domestic Jews in Mecklenburg:
- Peddlers
- Shopkeepers with or without cart permission
- Produce traders
The latter two were permitted under certain circumstances to keep additional trade assistants. Employment as a craftsman or in agriculture remained traditionally forbidden even to the protected Jews.
The letter of protection was conferred only upon male Jews. While it was not a legal prerequisite for marriage, it was practically indispensable in order to support a wife and thus to find one at all who was willing to marry. Since women at that time were economically dependent on men, they too were compelled to find a protected Jew in order to establish their own household and family. If they did not succeed, they were more or less condemned to remain with their parents for life. The life of a woman in that era was thus predetermined.
As far as the sons of protected Jews were concerned, they could work in their father's business without special permission until they reached adulthood. Once they reached adulthood or wished to start their own family, they too had to apply and hope for the granting of a letter of protection. In the 18th and early 19th century, it was common for sons to receive a letter of protection for a town other than their hometown, requiring them to move away.
If a married protected Jew died, his widow could frequently continue her husband's business and was occasionally also able to have the letter of protection transferred to a son or a potential son-in-law, thereby enabling a daughter to marry.
In return for the letter of protection, protected Jews had to pay an annual, later quarterly, protection or recognition fee. The amount was usually 12 Reichstaler, sometimes considerably less or more. In economic hardship, it could be suspended or waived upon application. Although it represented a welcome source of income for the dukes and grand dukes, it was by no means of fundamental importance to the state.
The granting of a sovereign privilege did not automatically entail a municipal right of settlement. It was therefore customary for the state government to seek the opinion of the magistrate of the relevant town before granting one. The magistrate was frequently opposed, as he wished to prevent additional competition for the Christian traders of the town. In some cases, prejudices against Jews were also reasons for rejection by the magistrate. If the state government ultimately granted the privilege, however, no magistrate dared to refuse the protected Jew the municipal settlement permit.
While protected Jews were initially not permitted to acquire any real property, it later became common practice that they could at least purchase their residential houses and bequeath them to their children. From 1755, this practice was codified in law through Section 377 of the Landesgrundgesetzlicher Erbvergleich. It would, however, take many more years before they were also permitted to purchase other real property.
The protected Jews and their families enjoyed the free exercise of their faith from an early date. They therefore formed small Jewish communities and had to make regular community contributions, the amount of which often gave rise to internal disputes. From the community treasury, the expenses for a religious teacher, the operation of a synagogue, and support for impoverished community members were then covered. The latter represented an injustice in the towns for a long time: although the Jewish communities financially cared for their own needy and already paid contributions there, they still had to pay into the municipal poor fund, but had no entitlement to draw from it themselves in case of need.