The strategic position of Germany at the heart of Europe and being the key player in both the EU and NATO makes Germany among the largest economies in the world. Its most critical exporting sectors —automobiles, machinery, chemicals, and home goods – set quality and efficiency norms not just in Europe but around the world, making doing business in Germany a top priority for multinational companies. At the same time, Germany is politically a federation of regions, each with its own traditions and customs; German business culture is portrayed by a set of key factors that influence corporate relationships with German citizens in various ways. This makes Germany attractive and a promising market for investors. If you are in Germany or want to invest there, check skilling for better guidance on the business opportunities. Despite the significant slowing of outside investment following the global recession and the ensuing Eurozone crisis, Germany remains a powerful magnet for doing business. A well-developed, dependable infrastructure, a highly qualified workforce, a favorable social climate, a stable legal system, and a long past record as world-class research and development underpin its vast, diverse economy. On the other hand, doing business in Germany requires familiarity with the country’s complicated bureaucratic procedures, tax systems, and legal environment.

Germany as a trading Power

Germany has long understood how to reap the benefits of globalization. Goods and service exports now account for roughly half of the country’s value-added. Exports support one out of every four employment, which is true in the industry even more than in any other sector. Exports aren’t the only thing that matters. Germany, as a manufacturing nation, is also largely reliant on low-cost, high-quality imports. Germany has consistently ranked high on the list of major trading nations. Germany’s position as a competitive exporter would be jeopardized without the German industry being thoroughly interwoven in trustworthy, international value chains.

Benefits of doing business in Germany

Crucial consumer market

With such a large population, Germany is the largest consumer market in the European Union. It is the world’s second-largest importer and third-largest exporter of consumer-oriented agricultural products, and for foreign producers, it is by far the most important European market. The German market is a formidable force that extends well beyond its borders. Together with Germany’s physical location in the heart of the European Union, these characteristics make it a cornerstone on which many U.S. companies base their European and global expansion strategies. The European Union has also significantly contributed to the expansion of the German market.

Dedication to innovation

Germany is one of the world’s leading, most inventive countries, focusing on leveraging science for economic gain. The country has a strong track record of effectively turning research into real-world applications. This practical focus has been an engine for job creation and a way to combine German scientific research to benefit society as a whole, from software to pharmaceuticals. Germany’s government exhibits its strong commitment to applied research by sponsoring research institutes, encouraging start-up enterprises, and licensing intellectual property to enable academics to transition from academia to other fields. The German government established a commission and funded the Agency for Breakthrough Innovations in December 2019. This new agency is in charge of releasing radical new technology advances. New investors have a larger opportunity to transform markets with new products, services, and value chains.

Incentives for investment

Germany has a wide range of incentive programs and public funding instruments that can be used for various projects. The following are some of the most well-known and popular programs:

  • Grants from the GRW. Cash incentives supplied through grants may minimize the cost of establishing new facilities. Large companies can get up to 20% of their qualified investment costs reimbursed, while medium companies can get up to 20%, and tiny businesses can get up to 40%.
  • Grants for research and development. Special grants are intended to aid in the development of research and development projects. Interest-reduction loans and other unique collaboration initiatives are among these programs.
  • Grants for employing. The German Federal Employment Agency and individual German states offer a variety of labor incentive schemes designed to help businesses increase their staff.

These special initiatives can assist businesses in entering the German market by compensating part of the initial investment expenditures.

In Germany, your business has higher chances of thriving in the market. This is because of the ready market available. The government incentives have helped to support start-up businesses. Therefore, Germany is one of the business-friendly countries in the world that every entrepreneurs should be free to invest.