General informationINVEST IN GERMANY

Country file

Capital city: Berlin
Official language: German
Population: 82,500,000
Area: 137,858 sq mi
Borders with: Denmark, France, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Czech Republic, Poland
Climate: Temperate
Currency: Euro

With a population of over 82 million, Germany is the largest country in the European Union. Because of its central location and excellent infrastructure it provides the best opportunity to not only explore the biggest local, but also to have free access to the European market. Export business constitutes a large portion of its open economy. Its gross national product per person is one of the highest in the European Union.

German economy

Main imports
  • Machinery
  • Vehicles
  • Chemicals
  • Foodstuffs
  • Textiles
  • Metals
Main exports
  • Machinery
  • Vehicles
  • Chemicals
  • Metals and manufactured items
  • Foodstuffs
Key sectors
  • Iron, steel, coal, cement
  • Chemicals
  • Machinery
  • Vehicles
  • Machine tools
  • Electronics
  • Food and beverages
  • Shipbuilding
  • Textiles

The German economy is characterized by small and medium-sized enterprises, but it is also home to many large, international companies. The economy is strong in many innovative sectors, such as mechanical engineering, the automotive industry, aerospace, logistics, telecommunications, pharmaceuticals, the chemical industry and new technology. The overwhelmingly positive assessment of Germany’s R&D landscape reflects the strong belief in Germany’s competitiveness.

In terms of infrastructure, logistics, research and development and design, Germany is held in the highest regard by foreign investors. Germany also gets top marks from foreign investors for political stability, legal certainty and quality of life. Other important factors contributing to this positive picture are, without a doubt, Germany’s rich cultural scene, the diversity of its natural environment and its world-famous tourist attractions.

Foreigners in Germany

The investment friendly immigration policy provides opportunities for investors, employees and family members to live in Germany. Larger German cities with international flair and multi-lingual schools make life convenient. 14% of the population are foreign citizens, and 19% of the country's residents are of foreign or partially foreign descent. Of course, if the investor only wants to invest, but not to live in Germany, he does not need a residence permit and there are no other restrictions under usual circumstances.

The business climate for foreign investors

Advantages of investment in Germany
  • Biggest domestic market in Europe
  • Central European location
  • Strong and innovative economy
  • Open economy
  • Open immigration policy for investors
  • No. 1 for FDI in Europe, No. 3 worldwide

More than 22,000 foreign companies operate in Germany – with a total workforce of over two million and a total annual turnover of more than EUR 750 billion. The British news magazine The Economist, for example, recently ran an editorial which presented the development of the German economy in a very positive light. And when the auditing firm Ernst&Young asked 500 entrepreneurs from across the globe what countries they considered the most attractive for investors, Germany came first in Europe and third overall.

Investing in Germany, which has an open economy and a pro-market government, is relatively easy. There are no limitations on foreign investment and no exchange-control restrictions. Germany also provides a variety of incentives to create an optimal business climate for foreign investors, including fiscal measures, development grants and an open immigration policy (please see the respective chapters below).

Foreign investors are not only welcome to establish their new businesses, but also to acquire a German company in order to take control of existing channels, or become the owner of know-how or well-known brands. German companies and real estate are available for very reasonable prices. In fact, the numbers of German M&A or real estate transactions are increasing.

Also there are various risky or conservative investment opportunities for individuals and corporations, e.g. in the capital, real estate, insurance and pension markets. A long-term investment strategy is supported by various bilateral Investment Protection Agreements.

Foreign businessmen attend German trade fairs regularly, maintain long-term business relationships with locals or set up their own businesses in Germany. The number of private or state owned enterprises with an Asian background in Germany is increasing rapidly.

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