Investments in Germany

1. Germany's Investment Advantages:

• Developed Infrastructure:
  • Germany boasts a world-class infrastructure, including excellent transportation networks and advanced telecommunications.
  • This provides efficient access to the entire European market.
• Skilled Workforce:
  • Germany has a highly skilled and educated workforce, with strong proficiency in English and other languages.
  • This ensures a readily available talent pool.
• Technological and Scientific Leadership:
  • Germany is a leader in innovation and technology, with a robust scientific and research infrastructure.
  • This fosters a dynamic environment for businesses.
• Open Investment Policy:
  • Germany generally allows 100% foreign ownership in most sectors.
  • Foreign companies are treated equally to domestic companies.
  • This applies to the privatization of sectors like telecommunications and postal services.
• Quality Standards:
  • German consumers place a high value on quality and brand reputation.
  • Voluntary certification from organizations like the German Standards Institute (DIN) can enhance market access.

2. Investment Incentives:

• Equal Treatment:
  • Foreign investors receive the same investment incentives as domestic investors.
• Types of Incentives:
  • Investment grants.
  • Tax benefits.
  • Low-interest loans.
  • State-guaranteed export loans.
  • Combinations of grants and loans.
• Regional Investment Support:
  • Incentives are often tailored to specific regions, particularly in Eastern Germany and Berlin.
  • The size of the investing company also influences the level of support.
• Research and Development (R&D) Support:
  • Germany provides significant support for R&D, especially for SMEs.
  • This includes grants and low-interest loans, covering up to 50% of eligible costs.
  • It is very important to get the most up to date information regarding R&D incentives, as they are subject to change.
• Investment Grants:
  • Investment grants are available for investments in new movable property and buildings.
  • The investor must provide a minimum equity contribution (typically 25%).
  • Projects must be completed within a specified timeframe (e.g., three years).
  • Job creation is a key criterion, with requirements to maintain new jobs for a minimum period (e.g., five years).
  • Grant rates vary based on company size (SME vs. large companies) and location.
  • It is very important to get the most up to date information regarding Investment Grants, as they are subject to change.

3. Key Considerations for Foreign Investors:

• Legal and Tax Advice:
  • Seek professional legal and tax advice to navigate German regulations and optimize investment incentives.
• Bureaucracy:
  • Be prepared for German administrative procedures, which can be thorough.
• Language:
  • German is the official language, so consider translation services for official documents.
• Cultural Understanding:
  • Familiarize yourself with German business culture and practices.
• Up to date information:
  • Ensure that you are using the most up to date information from the governing offices.