invest M INVEST IN GERMANY

If you decide to invest in Germany either directly or indirectly, we will be at your side every step of the way. To invest in Germany is to invest in the long term growth of your enterprise, and we would be delighted to help you in this process.

 

When you plan to invest in Germany, we can guide you through the process with an established network of seasoned legal experts and accountants – acting as an intermediary between them and you. We will leave no stone unturned when it comes to guiding you through all the necessary facets of a successful market entry, thus ensuring your investment in Germany is a sound one.

 

This list is by no means exhaustive, but it includes some key points to consider when thinking about investing in Germany. While every market has its own nuances, many of those that are identified below with respect to Germany are shared by other European countries. Thus, if you have already made an investment in Europe, it is likely that you have become familiar with some of these aspects.

 

National treatment

Once a company is established in Germany, it quickly receives national treatment and the investment-related problems that foreign companies face are generally the same as those for domestic  firms. Once you are considered a German  firm then you are eligible to all programs for firms in your location.

Taxation

Taxation is a complicated body of law in Germany. Like in any other international market, it is therefore recommended that you seek the counsel of an expert in German tax law on behalf of your business. Tax expertise is in no short supply in Germany, and the advice of a registered tax professional can be a valuable investment.  We can refer you to tax experts and act as a go-between if needed.

Labour market

Labour costs, influenced by higher marginal income tax rates and tight labour laws that regulate hiring and layoffs, are a very important consideration when doing business in Germany. However, as evidenced by the number of existing and new investments, the quality of the national labour force and the added incentives to doing business in Germany overshadow concerns surrounding the cost of labour.

Co-determination: labour participation in management

Germany has a long tradition of works councils and labour participation in company management. Any company looking to establish themselves within the German market should become familiar with the possible implications of this for business operations, specifically the decision-making process.

Regional incentives

There are countless regional incentives in place to encourage foreign investment into Germany. While the incentives with the highest profile have been those designed with the states of the former East Germany in mind, there are also a number of incentive programs available in the "western" states.

Incentives are only a part of the total calculations you make when evaluating potential sites and western Germany should not be ruled out because it is not the focus of the best known German incentives.

Location costs

There are substantial cost differences between rural and urban areas, especially in western Germany. These should be taken into consideration when comparing potential locations.

R&D incentives

Incentives in Germany are not only related to production and employment. For example, there are an increasing number of specific promotion programs for R&D in Bavaria, a state where the government has traditionally been very active in the economy.

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.  Since we already have networks in place, you will instantly benefit by being able the utilize them.

Federalism

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.

Regulatory approvals

It is important to become familiar with the processes and timelines required for the receipt of regulatory approval for various stages of establishing and operating your business in Germany.  We can help you in this process.

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How is business actually done in Germany? Check our guide for Business Etiquette!