There are many reasons why businesses and entrepreneurs are drawn to establishing a presence in Germany. Here are just a few strengths that the country has to offer.
Germany boasts one of the world’s most robust economies, being the largest in Europe and the third largest in the world behind the US and China. It is known for its diversified industry base and is home to globally recognised names such as Volkswagen and Siemens.
The German economy is strongly focused on exports, which account for around 50% of GDP. Germany is also known as a ‘soziale marktwirtschaft’, or social market economy, which combines economic freedom with social equity. All of this makes Germany an appealing location for businesses looking to establish operations.
Member of the European Union
The German economy is also stable due to its membership of the European Union (EU), which delivers key benefits to companies operating in the country. Free movement of goods allows businesses to trade within Europe without tariffs and restrictions.
EU businesses also benefit from the stability of the single currency, transparency of taxation and business accounting rules, and simplified administration procedures including a ‘one-stop-shop’ for VAT reporting for eligible businesses.
Germany is located in central Europe and shares its borders with nine countries: Denmark, the Netherlands, Belgium, Luxembourg, France, Switzerland, Austria, the Czech Republic and Poland. This position at the heart of Europe, and Germany’s excellent transport infrastructure, makes it a vital centre for trade and services, enabling businesses to ship products simply and quickly. This central location also means businesses are close to diverse markets and can tap into the vast consumer base of Europe and beyond.
As part of its pro-business attitude, the German government offers various incentives and subsidies to attract foreign investors, which can help companies expand into the German market by assisting with some upfront costs.
Public funding is divided into direct grants, public loans, public guarantees and equity capital, and include cash grants to set up new facilities, grants for research and development projects, and grants for hiring, which support companies looking to expand their workforce.
A skilled and diverse workforce
Germany has an employee base of over 45 million, making it the largest pool of workers in the EU. Germany’s dual education system combines theoretical knowledge in the classroom with practical skills, learned on-site with a company. With a wide focus on skills, including science, technology, engineering or mathematics (STEM), manufacturing, construction, business, administration law and health and welfare, this vocational approach, along with university education, creates a very diverse and skilled pool of talent.
The Global Innovation Index 2024 placed Germany 9th out of 133 countries, making it one of the most innovative countries worldwide. Germany’s government demonstrates a strong commitment to research by funding research institutions, supporting the creation of start-up companies, and licensing intellectual property. Its Future Research and Innovation Strategy defines the goals, milestones and priorities of the Federal Government’s research and innovation policy.
