Germany at the center of protests against Islam and immigration.
The state prosecutors' office said on Thursday the man was found dead on a street on Tuesday morning. A police spokesman declined to comment but prosecutors said 25 detectives had been assigned to investigate the case.
German media said the man was last seen alive on Monday evening and one paper quoted a local leader in the Left party, Juliane Nagel, urging police to redouble their efforts to determine if racist violence was involved.
The Frankfurter Allgemeine Zeitung said about 100 people had staged a demonstration when the police confirmed that the man, who was not named, was the victim of a violent crime. The paper quoted Mayor Helma Orosz as saying she was shocked by the news.
A record 25,000 joined the PEGIDA (Patriotic Europeans Against the Islamization of the West) movement's latest march in Dresden on Monday. The march followed the Islamist attack on French magazine Charlie Hebdo in Paris.
The Dresden rallies began in October as a local protest against new shelters for refugees and have attracted growing numbers of demonstrators.
Counter marches have taken place across Germany with far larger numbers. The PEGIDA leaders deny they are racist and are careful to distinguish between Islamists and most of Germany's 4 million Muslims.