Germany

Dr. Angela Merkel, German Chancellor:

“Germany is the strongest economy in Europe and one of the largest worldwide. Few countries are as tightly connected into the world economy as ours is. We are a preferred destination for foreign investors; nearly four percent of international direct investment flows into Germany. Germany’s international competitive strengths do not happen by accident. Rather education, research, and innovation are outstanding positive points of our country. As an engine of technology in Europe, Germany is in the league table of patents relevant to international markets and, measured according to population size, is number two worldwide in this category.

We are leaders in machine building and in the automotive industry. German companies are also excellently positioned in future-oriented areas such as laser, medical, and nanotechnologies. They profit from the outstanding research climate, the intense cooperation between science and industry as well as Germany’s highly motivated and qualified workforce. Joy in discovery, entrepreneurial spirit, and attention to quality all mold products “made in Germany.”

In addition to an excellent investment climate Germany offers international investors outstanding economic conditions. Consequential structural reform and a moderate development of unit labor costs have significantly improved the competitiveness of businesses in Germany. We have brought our corporate taxes to a level that is attractive in international comparison. Not to be forgotten, a first-class infrastructure, efficient capital markets, and a high level of legal security contribute to putting Germany regularly in a leading position in international location comparisons. Germany is a tolerant country and is appreciated around the world as a reliable partner. It is my pleasure to welcome you to our country.” 

Why Germany?

  • Business and office culture

Germany has its own business culture, which can vary between and even within individual states. There are specific aspects of formality, inter and intra office communications, and reporting structures and procedures that you should familiarize yourself with. Our bilingual advisors have lived and worked in Germany and are comfortable with the German language and business culture. They can be valuable assets when evaluating a prospective investment opportunity and establishing a presence in Germany or dealing with a German supplier or importer.

  • Language

While English is becoming increasingly commonplace in German corporate environments, it is nevertheless important for client attraction, retention, and management to have strong German language capabilities within your firm. This competency will be equally important in dealing with your importers or expanding your business into the German market.

  • Warranty and liability

Conversely, German standards relating to warranty and liability are comparatively high and are an important part of the contracting process. The security and reliability of inputs are central concerns for German businesses, which operate in a generally risk-averse corporate culture. Building business relationships in the German market requires patience on the part of newcomers; rarely is a company able to instantly replace other suppliers to German clients upon establishment in the country.

  • Environmental regulations

Environmental regulations in Germany are more thorough than in many other international markets and have laid the foundations for legislation at the European Union level. Examples of highly regulated areas include agri-food, specifically Genetically Modified Organisms, and other industry branches related to biotechnology. Since navigating these often complex environmental regulations can pose a challenge for foreign companies entering the German market, seeking advice on the local, national and European legislation that might affect your business is recommended.

  • Federalism

Like in Australia, competencies in Germany are divided between the national, state, and municipal governments. Understanding this division of competencies will help you to identify the main governmental players in the industry sectors concerning your business. Attending industry trade fairs within Germany is an excellent way to meet these stakeholders personally, as most are present at such events. It is important to note that the location of a particular trade fair is not necessarily a reliable indication of the region most likely to position your business for success in the German market.

Germany Trade and Invest is the federal investment promotion agency for Germany, attached to the German Federal Ministry of Economics and Technology. Its mission is to promote Germany and actively identify business opportunities for international investors. The site is an informative guide for foreign investors interested in Germany. It provides comprehensive general and sector-specific market information (e.g opportunities, trends, and regulations) as well as cost-free support for foreign companies.

The most recent developments regarding foreign investment opportunities are reported in the regularly published Germany Investment News. Other highly recommended publications include the Investment Guide to Germany, which gives an in-depth description of the advantages of the German market as a business and high-tech-destination, as well as information outlining importing procedures, corporate and labour laws, and taxation.

Germany Trade and Invest also leads the Powerhouse Eastern Germany initiative aimed at assisting foreign firms in establishing a presence in Eastern Germany. In partnership with the Federal Government Commissioner for the New Federal States, the website contains information on incentives offered by the German government to settle in Eastern Germany (i.e. financial incentives, R&D support).

  • Client service

The concept of client service is much more prevalent in Australia than it is in Germany. In light of this, fostering a service mentality within your firm’s German representatives may require additional training and development programs.

  • Main investment sites for the 16 German states

Individual German states play an integral role in investment attraction. State investment promotion agencies not only offer extensive assistance for foreign firms interested in local markets, but also provide information on the location and development of regional industry clusters. While we have identified the official investment agency of each state below, it is nevertheless important to consult other helpful sources before making a decision on the location for a particular investment.

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