A profile of Germany

Germany, with its central geographic location, is a hub for economic activity within the European Union. Germany’s economy is the largest in the EU and represents 20% of the EU’s gross domestic product. With a thriving export market underpinned by a strong domestic market of 81 million inhabitants, Germany’s economy is often referred to as the powerhouse of Europe.

Germany shares borders with 8 European Union countries making it perfect for foreign companies seeking access to the EU’s market.

The country boasts excellent infrastructure and a good investment climate. Latest studies show that Germany is the number one choice for foreign direct investment in the European Union. Over 55,000 foreign companies operate in Germany and benefit from free trade on the European Union’s single market.

Economic activity

Germany is a social market economy which fosters free enterprise. Small and medium-sized enterprises make up the majority of companies in the Germany and employ around 60% of the workforce. The German workforce is considered to be well educated and highly skilled.

All industry sectors are represented in Germany. The main focus of economic activity is on manufacturing and services. Germany’s manufacturing sector covers new and cutting-edge technologies, including laser, medical, nanotechnologies, as well as machine building and automotive manufacturing.

Germany has an excellent research and development climate. Public and private spending on R&D amounts to almost 3% of GDP and over 70 billion euros. The strong innovation success is reflected in Germany’s leading position in Europe in terms of patent approvals and the fact that the “Made in Germany” label is world renowned for quality.

Close cooperation between science and industry ensure quick market access, wide-ranging knowledge transfer and make Germany perfect for investing in modern and leading-edge technologies. In addition, the German government offers subsidies to promote innovation and the development of new products.

Foreign direct investment in Germany

With no controls on foreign direct investment, Germany is an attractive country for foreign investors. As well as being the first choice amongst international investors seeking to enter the European market, the country also scores highly in terms of global investment intentions.

Almost three quarters of FDI in Germany comes from other EU countries. The main areas receiving FDI are the ICT and software industry, businesses and financial services and the automotive and industrial machinery sector.

International trade

Germany is the European Union’s top exporter and the third largest export nation in the world after China and the USA. German exports cover goods such as chemicals, machinery and automotive products.

Germany’s main European trading partners are France, the United Kingdom, Italy and the Netherlands. The country’s main international trading partners are the USA, China, Russia and Japan. The majority of international trade conducted by Germany is with EU partners.

Our team of German lawyers has a wealth of experience in a range of crucial business areas. For over twenty years, WILDE BEUGER SOLMECKE’s experts have been helping foreign investors do business in Germany and we can help you do business in Germany too.

For more information on doing business in Germany, contact us on +49 (0) 221 / 951 563 0 or use our contact form.

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Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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