It’s no secret that Germany is the biggest and most prosperous country in Europe, the economical and political leader of the EU - a formation that can’t be ignored in either politics or business. So having entrepreneurial sympathies in this part of the world, we question ourselves: “Should I invest in Germany?”
Besides its stable economy, Germany attracts investors with its broad and solid customer base, being the biggest home market in Europe. Firmly integrated with the world economy, Germany is contributing to the creation of a reliable and mutually beneficial global business network. Its participants have direct access to products, services, employees and knowledge all over the world.
The German market is believed to be one of the most investment attractive in the world, not to mention the EU. Why?
First of all this country shows steady growth over the past 10 years minimum. Its Gross Domestic Product (GDP) has increased with almost one billion euros starting with 2007 (from EUR 2 513,23 to 3 263,35 bn) according to the graph below (source: Statista).
This is just one of the proofs of this country's economic stability and reliability of business here.
German business infrastructure includes tens of thousands of companies of all sizes, benefiting from a favourable environment created by the state. The laws here are very liberal - it doesn’t matter to the Government whether locals or foreigners are engaged with a business, whether they are founders or employees. It accepts the creation of businesses of any kind and contributes to their prosperity. Actually, Germany’s economy owes its impressive performance mostly to Mittelstand - the small and medium-sized businesses (SMEs).
Here are some more important reasons to invest in Germany:
DACH. German market is inextricably linked to those of Switzerland and Austria due to the historical, cultural and linguistic commonality. Together they’re forming the DACH market - the most developed, stable and influential in Europe. The report from Statista (below) is demonstrating the fact that its GDP is maintaining traditionally high levels through the years.
100M+ consumers. The population of Germany, Austria and Switzerland together totals to more than 100 million people. So, getting access to the DACH market you can reach a vast German-speaking audience, its homogeneity facilitating targeting them and converting them into customers.
Perfect logistics. The common road network, the absence of borders between Germany and Austria as the EU members and simplified border control procedure on the German-Swiss border are just a part of the DACH advantages. Developed transport and warehouse connections proven by time establish a strong connection between producers, importers and exporters, suppliers and consumers.
Impressive unemployment decrease. Unemployment in Germany fell drastically in the last few years unlike any other European country, that continue to struggle with high unemployment rates. A remarkable number of 17,000 workplaces were added in Germany to the already existing ones.
Strong and permanent growth. The German economy may not be among those showing a ‘rocket’ breakthrough, but its stability is something to be envied. It’s moving forward slowly but consistently, showing stable levels of growth.
Overall state support. German Government is doing its best to create an attractive investment climate for local and foreign businesses.
Germany Works is a project established and powered by Germany Trade & Invest Agency (GTAI) - the economic development agency of the Federal Republic of Germany.
50+ German and foreign offices the GTAI has contributed to form a strong system of connections all over the world. It provides support to international companies established in Germany as well as local companies willing to establish abroad. GTAI aims to strengthen Germany as a business location and promote it, attracting companies that are looking forward to invest in Germany.
Having the international investment attraction as a mission, Germany Works (GW) is created to promote this idea online. It informs businesses about the best opportunities in an easy-to-understand form, avoiding the bureaucratic language of the official ministry websites. Here you will find comprehensive information about the country and its opportunities. GW provides access to a large network of experts and organisations. Additionally it offers personal assistance for any specific questions you may have.
The Germany Works website provides extensive and detailed business guides for the seven main branches of the German economy, worth investing in and the most promising, like:
Machinery and equipment
Germany Works is the place where international investors can get advice and support on each stage along their way from entering the German market to establishing a company locally.
A team of experts is allocated to each of the 7 industries covered by GW. These people join you at the very beginning of your investment journey, guiding you through the whole process so that you achieve all the goals you’ve set for yourself. Here’s just a part of what can the ‘Germany Works’ project do to make the process of investing in Germany as smooth as possible.
‘Germany Works’ experts help foreign investors define their key markets, establish a strong connection with the local main players in the supply and application field, and assess the R&D environment.
Use GW assistance when looking for a perfect location for your business. The expert team will take your specific investment requirements into consideration and find a site that meets them perfectly.
Being aware of the local business environment specifics, habits and investment expectations, the ‘Germany Works’ team is always at hand to help you establish contact with the local key business figures. You can expect a full range of services from the investment object visits and partner meetings coordination to turning your requirements into concrete investment proposals, attractive for locals.
Working with the Germany Trade and Invest (GTAI), you can become the possessor of key knowledge for any businessman willing to enter a foreign market - Germany’s tax and legal system design and obligations for the investors arising therefrom. You’ll also learn what are the local industry regulations, and become acquainted with the situation on the domestic labor market.
The range of services here is quite wide, providing a businessman with advice on the relevant financial packages creation as well as the connection with appropriate financial partners. In case you’re willing to apply to an incentives program, you’ll get comprehensive information about the advantages your can benefit from on the local market and application process support, fitting their individual funding requirements. You can also not worry about establishing contacts with local business development organizations.
You can access the partners, who are most important to foreign investors willing to establish a business in Germany. They are available due to the Germany Trade & Invest (GTAI) close relations with the key players of each industry:
All federal government ministries;
The most influential organizations of the German economy, like the DIHK - German Chambers of Industry and Commerce, and the BDI - Federation of the German Industry;
Key industry and trade associations for each economy sector, like the German Association of the Automotive Industry (VDA) for the Automotive sector.
As you can see, the ‘Germany Works’ project of GTAI is not something an adequate business owner can neglect when entering the German market. It’s literally the richest source of all sorts of assistance, local insights, business information and valuable expert advice. This scheme taken from the GTAI website can definitely serve as an evidence.
Investing in a foreign country is always a risky venture, even when we’re talking about investing in such a stable economy as the German one. Given that, the Germany Trade & Invest is the best place to seek help and expertise when you’re tuned in to enter the German market. But first you’d have to make sure 1) this expansion is really worth it and 2) what to be aware of when contacting the GTAI.
This is impossible without doing your due diligence and correctly assess all the risks. Here’s when the business intelligence providers come at hand.
Global Database is a business intelligence provider of comprehensive industry state data, financial insights, company and executives information and verified contact data. All the information is accessible on a platform with multiple sets of filters, that help you narrow down your search to exactly the things you need.
In the end, you’ll get the full understanding of the situation on the market, get insights on your possible competitors and their financial state, and become prepared to the pitfalls you may encounter on your way to expand on the German market.
So let’s check the platform possibilities in your risk evaluation campaign.
First of all, you’d like to check what are the locations most likely to fit your investment possibilities and interests. Depending on the scale of your potential business narrow your search down to a particular city or even street.
Global Database offers a potential goldmine for investors and potential partners. The platform gives you the possibility to accurately perform your due diligence, avoid partnership failure for your company and be sure you’re acquainted with the market you’re planning to enter, filtering your search by net profit, turnover or revenue per employee.
Check whether there are reliable manufacturers and suppliers to partner with in the German city or land of your interest, performing a deep situational analysis for this. The first stage of it would be checking the financial state of potential partners in the Global Database dashboard and then learning what’s going on with their annual turnover and net profit.
This knowledge will enable you to assess whether the city of your interest can provide enough space and possibilities for your development, and make sure there are local enterprizes reliable enough to partner with.
The benefits of investing in Germany are innumerable but there are no successful market entrance and expansion cases that weren’t informed and carefully prepared. German authority has done a great job to attract foreign investments to its country and one can always rely on its full support and professional guidance. The combination of Germany Works and Global Database platforms is a great useful combo, that can help you set up a smooth process of establishing a prosperous business in Germany.