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Doing Business in Germany Contents This publication is a joint project with Doing business in Germany Contents Executive summary 4 Disclaimer Foreword 6 This document is issued by HSBC Trinkaus & Burkhardt AG (the Introduction – Doing business in Germany 8 ‘Bank’) in Germany. It is not intended as an offer or solicitation for business to anyone in any Conducting business in Germany 14 jurisdiction. It is not intended for distribution to anyone located in Taxation in Germany 20 or resident in jurisdictions which restrict the distribution of this Audit and accountancy 25 document. It shall not be copied, reproduced, transmitted or further Human Resources and Employment Law 26 distributed by any recipient. Trade 28 The information contained in this document is of a general Banking in Germany 29 nature only. It is not meant to be comprehensive and does not HSBC Trinkaus in Germany 30 constitute financial, legal, tax or other professional advice. You Country overview 32 should not act upon the information contained in this publication without Contacts 34 obtaining specific professional advice. This document is produced by the Bank together with PricewaterhouseCoopers (‘PwC’). Whilst every care has been taken in preparing this document, neither the Bank nor PwC makes any guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or PwC be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and/ or PwC only and are subject to change without notice. The materials contained in this publication were assembled in December 2012 and were based on the law enforceable and information available at that time. Executive summary Germany’s highly developed • Germany’s foreign direct infrastructure, relative economic investment reached stability and location in the EUR 509 billion in 2010. middle of Europe has made it More than 55,000 foreign a popular hub for investment. companies are already This guide introduces some of operating in Germany. the key issues which investors should be aware of in setting • Germany has significantly up and running a business reduced the level of its in Germany, ranging through corporate tax burden since 2008. corporate structures, tax and employment matters. • The government also develops reforms to improve the general Some of the key matters to be tax framework in order to keep aware of are as follows: indirect labour costs down. • In Germany you will find a • Customers in the German highly developed economic, market do appreciate contracts political and infrastructural under German law and local framework providing the contacts and addresses. necessary security. • Make sure you find the right • Judiciary and civil service location under consideration institutions are professionally of available work force, regulated to ensure customer base and trade tax. consistently excellent service. Contractual agreements • Enjoy the cultural background are secure and intellectual and the regional differences property is strictly protected. in Germany! 4 Foreword While doing business in In Germany we bank primarily Manfred Krause Germany, you gain valuable internationally operating Member of the Management insights into the German companies from the corporate Board and Head of Corporate market and ideas to unlock its segment. Banking Germany enormous potential. This guide is a collaboration of HSBC and Experienced relationship PricewaterhouseCoopers. Like advisors serve our clients at PwC, we both have a strong our head office in Düsseldorf global network and a deep and at five further locations in understanding of local markets. Germany. They are the central Together, we possess a wealth contacts and coordinate the of experience to support your deployment of the product ambitions in these markets. specialists. HSBC Trinkaus-founded more Having had first-hand experience than 227 years ago- is one of that you should never Germany’s leading commercial underestimate local knowledge, banks and a member of the I am certain you will find this HSBC group. guide useful. Based on HSBC Trinkaus’ consistent strategy, the resulting earnings strength and integration into the HSBC Group. Our current Fitch rating of AA- Stable, still makes us the best-rated private commercial bank in Germany. 6 Introduction Doing business in Germany Economic environment of the World Economic The GDP (2011) of EUR 2.6 of Germany Forum – 2011/2012. trillion was earned to 54% by Services, to 30% by More and more companies Germany’s economic Industry, to 15% by Trade discover Germany as a secure performance has improved and to 1% by Agriculture. and profit-driving investment from the economic down- location. In the last five years turn of the 2008/2009 winter Traditionally, strong industries (2005 to 2010), Germany’s since the second quarter of in Germany are: mechanical foreign direct investment 2009. In 2011 Germany’s engineering, the automotive stocks increased by a total of economy grew by 2.7%. industry, aerospace, logistics, 42% to reach EUR 509 billion Despite the ongoing and the pharmaceutical and in 2010. More than 55,000 European debt crisis the chemical industries. But also foreign companies are operating German government Germany is the world leader in Germany, employing forecasts an economic in the sustainable industry over three million people. growth of 0.7% in 2013. revolution and German companies also lead the According to recent studies, Also in the business climate field in new technologies Germany ranks as the top index in October 2010, people’s (i.e. nanotechnology, medical investment location in Europe opinion on the future of the technology and biotechnology). with a relative economic stability. German economy has As the largest domestic market continued to be optimistic. With exports of goods of within the EU it creates a EUR 952 billion (2010) and considerable and stable customer Industries and imports of goods of EUR 798 base for investors. Germany Business Segments billion (2010), Germany is a earned 20% of Europe’s GDP traditional exporting nation. (EU-27) and was home to Germany’s economic position 16% of the total European enhances an extensive Availability of Labour Union population in 2011. and competitive industrial The German economy is environment with a focus on Germany has highly qualified both highly industrialised innovative future technologies. and motivated specialists and is and diversified – with equal Many small-and medium-sized known as having a high standard focus placed on services and enterprises use this potential, of efficiency and organisation. production. making them market leaders The German education and in their respective markets. sophisticated training system Given its location in the German ‘Middle Market’ is ensures that employed middle of Europe, Germany regarded as the backbone of personnel are qualified for is frequently used as a hub the German economy with companies’ purposes. for investments and logistics more than 99.7% (2011) of likewise to reach established all companies being small- Although there is a current and growing markets across and medium-sized entities unemployment rate of 6% Europe and especially and approximately 39.1% (2011 estimated) reported Eastern Europe. Germany’s (2011) of net value added by the International Labor infrastructure ranked number being generated by small- Organization in 2012, it is not one in the world in a Global and medium-sized entities. always easy to find skilled Competitiveness Report employees at short notice. 8 One of the reasons for this is the automotive industry, whether you are a German compatible, energy-saving Many Germans speak at least Additionally, a handshake that the location of available the industrial machinery and citizen or not but dependent production procedures. one other foreign language may be accompanied with a and skilled employees does equipment industry and the on the area of the business such as French, Spanish, slight bow. Reciprocating the not always match the regions consumer goods and and creation of jobs. Make sure that potential Russian or Italian. nod is a good way to make a of high economic power chemical industries. incentives are scrutinized and good impression, as failure to and demand. Therefore, The most important applied for before the actual Business Etiquette respond with this nod/bow depending on the business The business activities of development institution set-up because this may be (especially a superior) may get of the investors, they should new investment projects are at the federal state level is the relevant for the incentive Business dress code in you off to a bad start. Be sure make sure that the relevant sales, marketing and support state-owned Kreditanstalt für being granted. Germany is generally to look directly into the person’s workforce is available in offices. Also, in almost 21% Wiederaufbau (KfW). conservative. Businessmen eyes while shaking hands. the region of set-up. of all investment, project Companies must submit Cost of living wear suits, conservative activities are carried through by applications for loans and ties, and plain or only slightly In Germany business is viewed Foreign Direct Investments manufacturing sites. Projects incentives via their house bank. With the cost of living below patterned shirts. Women also as being serious, and Germans with the highest volume were Funding is generally available for: the global average and that of dress conservatively, in suits do not appreciate humour in a The German market is initiated by the Netherlands • Start-up funds other European countries (i.e. and blouses. business context. welcoming investments (22%), Luxembourg (16%) and • Capital for start-ups Norway, Denmark, Belgium, in nearly all industry sectors France/US (10%) in 2011, as • Capital for growth the Netherlands, UK and Italy), The German thought and Germans frequently greet and lines of business. There reported by the International • Entrepreneur loans Germany provides moderate planning process is very time- each other with Herr or Frau are industries and professions, Monetary Fund.
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