Consultants and networkINVEST IN GERMANY

Consultants and networks

Many legal, tax and business consultants or public institutions offer services for investment activities in Germany. Among all the offers there are some available which perfectly suit the potential investor’s interests and intentions. This overview of the market will help you to find your best partner and to be aware of cheats.

German chambers of commerce

Semi-public institutions like the German chambers of commerce (Industrie- und Handelskammer, IHK, or Au?enhandelskammer, AHK) can provide useful contacts, information and consultancy services. Their business is to promote Germany and to support the German economy. On the one hand they perform official tasks, e.g. they will assess your business idea during the immigration proceeding. Before making the first contact, you should carefully consider which information to disclose about your background. On the other hand, the chambers are privately financed by the members’ contributions and customers’ service fees, so they need to promote their service like private consultants. The chamber’s main task – promotion and support of the German economy and the members - might become contrary to the investor’s interest, e.g. when it comes to competition or displacement of local companies.

Economy Development Bureaus

The local German Economy Development Bureaus are established and fully owned by the local government. They promote the local city and can provide useful local contacts and services. Their job is quite similar to the local Trade Chambers, but they do not need to protect other Chamber members’ interests.

Law firms

Law firms usually focus on legal and tax advice, some offer additional business and consulting services. Only professionals, i.e. those with a qualification and a certificate, and working in a law firm are allowed to offer full legal and tax advice in Germany. Every lawyer is obliged to have indemnity insurance which covers at least EUR 250,000.00 of the client’s damages in case of poor advice. Lawyers have to conform to professional rules under the control of the regulating authorities.

Tax consultants

Tax consultants are professionals who focus on taxes and additional business and consulting services. They are allowed to provide legal advice limited to legal issues covered by their tax business. They are obliged to have indemnity insurance and they are controlled by regulating authorities.

Business consultants

For business consultants, either professionals (e.g. holding a business studies diploma) or non-professionals, professional regulations do not exist. Because of the lack of mandatory certificate and control, the customer should be very careful finding reliable and experienced partners. Because consultants are basically not allowed to provide legal services, some co-operate with lawyers. If so, the customer should make sure that all legal services are provided by the co-operating lawyer. Otherwise the contracts, declarations etc. that are based on legal advice provided by a non-professional legal advisor might not be valid, and the customer’s damages caused by false advice might not be covered by indemnity insurance.

Beware of rip offs

As in any other business, some try to cheat potential investors. The long distance of overseas investors from Germany makes it especially hard for them to keep control. The easiest way to find good support is of course to follow a recommendation of an experienced and independent (business) friend. E.g., the following points can help you to detect dishonest business consulting practice. For the new and growing investment in the real estate market, no characteristic cheating strategies have been discovered yet, but some of the points may apply too:

  • Arguing you into establishing the company first without making any preparation for the immigration proceedings; surcharging running costs for the initial office address, post, etc and delaying the proceedings or even not applying at all
  • Assuring you that your case is a clear one without having checked some background details (“everything is possible...”)
  • Preparing your case without demanding details
  • Changing their address, telephone number, conducting business from home

Your counter strategies can be the following:

  • Make a test call and give a bad case (e.g. minimum registered capital, no foreign language skills, no experience of foreign markets) and check if they provide you with an honest answer
  • Compare the information provided by several consultants
  • Search the internet for statements from third parties about the consultant
  • Search the internet for c/o addresses the consultant provides other companies with; if there are too many, the companies are likely not to have started business. Too many bogus companies leads to loss of the consultant’s reputation with the immigration authorities
  • If the consultant is claiming to co-operate with professionals, ask both sides for some detailed information about their co-operation, e.g. how many cases have they arranged, and compare their statements
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