KPMG Intbusiness Onlinenewsletter

Business in Germany

Insights for Foreign Investors

A Genuine Global Player Examining German investments abroad

Mastering Industry 4.0 German tech clusters prove successful

Special: Invest in Bavaria The centre for IoT

March 2017

International Business 2 | Business in Germany | March 2017 Seeking a Safe Haven

Dear reader Content

The world is changing. We started 2017 with the inauguration of Donald Trump 01 Current Data p.3 as the 45th President of the United States and Theresa May’s announcement that the UK would leave the European Single Market. Do not be surprised if populists 02 A Genuine Global Player p.4 perform strongly – not only in the Netherlands and France, but also in Germany – in the elections this year. 03 Mastering Industry 4.0 p.6

I strongly believe, however, that they will not surge to power in any of these countries. 04 Digitalisation of Instead, it could be the start of a type of globalisation that is felt to be more German Real Estate p.8 reasonable and just as favoured by many at the World Economic Forum in Davos. 05 Welcome to Germany p.10 Even though huge changes lie ahead of us, we have an opportunity to move closer together and reorient ourselves in order to further strengthen the German and 06 Meet the Locals p.11 European economies. In her speech to the German Chamber of Industry and Commerce in Cologne on 17 January 2017, Chancellor Angela Merkel appealed to 07 New Salary Criteria leading business experts to work closely with the German government: “I ask you in Germany p.12 not to deviate from what we understand as fundamental and successful principles only to seek short-term opportunities.” 08 Invest in Bavaria p.13

With an increasing number of unforeseeable events that impact our globalised world, 09 Key Events p.15 Germany remains a safe haven in turbulent times. Almost no other economy in the world is as closely linked to foreign economies as Germany, as highlighted in our 10 Three Questions p.16 Investment Report. Germany stands for mindfulness, justice and tranquillity, and is standing up for its core values. Our belief in ourselves and these values is essential for strengthening the economic and political position of the European Union as a whole.

Angela Merkel summarised it nicely by saying, “Those who do not stand up for their ideals, for their basic values, who give them up for the smallest short-term advantage, won’t be successful in the future.” I agree.

Kind regards,

Andreas Glunz Managing Partner International Business KPMG in Germany

The German economy grew by 1.9% in real terms in 2016 (German Federal Statistical Office, 2017) and remains on a stable growth path in 2017. However, increasing protectionism puts pressure on German exports. Growth is hence primarily driven by domestic consumption.

JANUARY INFLATION EUR / USD EUR / CNY 1.9 % 1.06 7.28

Source: German Federal Statistical Office, 03/2017 Source: ECB, 27/02/2017 Source: ECB, 27/02/2017

DECEMBER EXPORTS 2017 GDP GROWTH DECEMBER IMPORTS EXPECTATION 97.4 m 78.7 m

Source: German Federal Statistical Office, 03/2017 Source: 1.7 % German Federal Statistical Office, 03/2017 GERMAN INTERNATIONAL RANK DECEMBER BY GREENFIELD INVESTMENTS UNEMPLOYMENT RATE FROM ABROAD, 2016 #6 3.9 %

Source: Source: fDi Markets, 03/2017 Source: OECD, 11/2016 German Federal Statistical Office, 03/2017

NUMBER OF THE DAY

Germany is the country with the world's most subsidiaries abroad – an astonishing fact considering the country only ranks 17th by population. 27,420 This, again, underlines the international focus of German companies. GERMAN SUBSIDIARIES AROUND THE GLOBE Source: OECD, 2017

With Germany being one of the world's leading export nations, the success of German businesses is based on a strong international focus. A changing risk perception seems to lead to a shift in strategy.

German companies are among the most international in the Twenty-two of the thirty largest German corporates, which world and they will continue to invest strongly abroad. How- form the German stock index DAX, generate 70 per cent or ever, their regional and strategic focus is changing. This is more of their annual revenue abroad. Although Germany is revealed in the KPMG Investment Report, for which we con- known for being one of the largest export countries in the ducted a survey among 200 CFOs and heads of strategy at world, a significant portion of this revenue is earned by large German companies. German subsidiaries based in foreign markets. With more than 27,000 subsidiaries abroad, German companies rank number one regarding international entities, above the US.

Number of subsidiaries abroad by country

30,000 27,420 26,919

25,000 23,445 21,519

20,000

15,000

10,000

5,000

0 Germany USA UK* Japan

Source: OECD, 2016; data from 2013. * Data from 2012

The outlook for the next five years, however, reveals a re- as well, for example, in Turkey and the United Kingdom, gional and strategic shift in investment strategy. Whereas which draws a picture of a difficult worldwide investment German companies have strongly increased their involve- environment at present. ment in emerging markets in the past decade, they are now turning their focus back to the mature markets in North To overcome this situation, German companies are America and Europe. Among the BRIC countries of Brazil, shifting their focus from expansion to investments abroad. Russia, India and China, only the latter seems to remain a About one quarter of the surveyed companies will also key investment target for German companies. Obviously, invest abroad in the next five years to reduce risks, either economic and political crises in Brazil and Russia have by diversifying their market portfolio or by increasing their forced the firms to rethink their regional investment strat- own contribution to the product supply chain and thus egy. However, economic risk is increasing in other countries being more independent from international suppliers.

In which countries or regions will you invest more intensively over the next five years?

16% 25% Russia 21% 5%

8% 59% Japan Europe 8% 46% 4% 66% North America 9% 57% 51% 48% 54% 40% China 48% 59% 55% 41% 28% 18% India 13% Middle East 42% Latin America 26% 16% 15% 21% 23% 9% 15% 31% 9% 15% Southeast Asia Brazil 45% 36% 21% 10% 14% 4% Africa 15% 22% 9%

all companies 15% more than 1 bn. euros No investments planned annual sales 3% 17% 500 mn. to 1 bn. euros 24% annual sales less than 500 mn. euros annual sales

Source: KPMG, 2016

For further information, please contact:

Andreas Glunz Managing Partner International Business KPMG, Germany [email protected]

A rapid change in technology could hit any industry. The pressure exerted by digitalisation on industrial manufacturing is severe. However, it seems like Germany has found the right answer.

The industrial manufacturing sector forms the basis of the The German Federal Ministry for Education and Research German economy. Industry sectors in most First World (BMBF) started to promote Industry 4.0 back in 2011. By countries nowadays have a GDP share of approximately November 2016, the BMBF had spent more than 120 million 20 per cent, whereas the industrial sector in Germany con- euros on research projects. tributed more than 25 per cent to the German GDP of about three trillion euros in 2015 (World Bank, 2016; Federal One of the high-tech clusters is called “it's OWL” and is Bureau of Statistics, 2016). Besides the famous German based in Ostwestfalen-Lippe, a region in the northwest of automotive sector, its success is mainly driven by the Germany. It brings together 180 companies, universities, machinery and equipment engineering sector. Companies research institutes and organisations, which are developing like Siemens and Bosch are famous worldwide. However, innovations in the field of intelligent technical systems. there are also 10,000+ small and medium-sized enterprises (SMEs) in this industry – known in Germany as the Mittel- Further excellence clusters include “microTEC Südwest” in stand – which have nurtured the legend of products made in the Stuttgart region for microsystem technology, “Cool Silicon” Germany over the past few decades. in the Dresden region for microelectronics and nanoelec- tronics, and the “Software-Cluster” in southwest Germany for the development of business software to manage future Joint efforts to push for Industry 4.0 processes.

Over the next few years, new technologies and opportuni- All of these clusters and initiatives are pursuing the goal of ties like 3D printing, the Internet of Things and learning placing German companies in a leading position when it algorithms will disrupt the industrial manufacturing sector comes to developing the standards of future production completely, turning it into Industry 4.0. Production pro- processes. cesses will change dramatically. Robots will be able to manage more production steps than ever and the co-working of machines and human beings will progress to a new level.

Attracting foreign capital most interesting sector for international companies invest- ing in German firms: 18 per cent of all deals in Germany The number of cross-border M&A deals with German targets were recorded in this sector. Regarding deal value, around in the last two years impressively documents the success 21 per cent of the total M&A investments were directed of these initiatives and clusters. Industrial manufacturing is the towards this industry.

Cross-border M&A deals with German targets, number of deals (as a % of total*), 2015 – 2016 Cross-border M&A

6% 7% 15%

9% 8%

18%

9% 10%

4% 10% 3% 3% 17%

Industrial manufacturing Consumer products and services Materials Automobiles and components Healthcare Machinery and other industrials Building/construction and engineering Media and entertainment Transportation and infrastructure Retail Source: Thomson One, 2016 High technology Other Percentages may not add up to 100% due to rounding. * total number of deals: 1,257 Real estate

Demand-driven disruption Algorithms are also finding their way into technical systems, such as those used for autonomous vehicles, the aerospace A recently published KPMG study on the digital transforma- industry or medical diagnostic models. 18 per cent of the tion of the manufacturing industry, which included a survey companies surveyed in Germany already consider the use of 76 CEOs, owners and department heads, mainly from of complex knowledge-based systems to be relevant and the mechanical and plant engineering sector, underlines want to bring this to the forefront of their own company. the progressiveness of German companies with regard to Industry 4.0. In light of all this, the German industrial manufacturing sector offers excellent investment opportunities for interna- According to the study, one of the main driving forces be- tional companies. Their involvement in German industry hind digitalisation is the strong focus on customer needs. can be expected to increase further. German manufacturing companies expect that their customers will increasingly intervene in product development For more information, please contact: and manufacturing processes. In the next ten years, a huge majority of 87 per cent of German manufacturing compa- Harald von Heynitz nies wants to meet new customer requirements for new Partner, Head of Industrial Manufacturing, KPMG in Germany features and innovations. [email protected]

04Digitalisation of German Real Estate

National and cultural borders still restrict the development of digital ecosystems. New research shows that European countries are at various stages of development when it comes to digital trans formation within the real estate market.

There is no doubt that the massive trend towards digitalisa- million square metres, take-up increased by approximately tion will have a huge impact on the economy and society. 15 per cent between 2014 and 2015, reaching a new record Trends in the German real estate market are already influ- level. Moreover, the amount of newly constructed logistics enced by the digital economy, which comprises information space is also increasing. The proportion of new-build space and communication technologies and internet-related rose from approximately 59 per cent of total take-up in companies. 2015 to 66 per cent in 2016.

Due to its strategic location in the centre of Europe and its As a consequence, logistics properties are becoming excellent infrastructure, the logistics sector is one of the increasingly attractive to investors. Evidence for this is main drivers of Germany’s economy. The e-commerce found in the record transaction volume levels (up by around boom that accompanies digitalisation has led to increasing 30 per cent in 2014 and around 40 per cent in 2015), which demand for logistics space in recent years. At around 6.0 has compressed the German real estate market.

Flagship stores on the rise Most important: IT infrastructure

The question is, how is the retail sector itself impacted by Digitalisation brings with it other trends that influence the e-commerce boom and trend towards digitalisation? the office sector: co-working, remote working and home Market participants expect demand for retail space in prime offices. These all lead to enhanced requirements for flexi- locations to remain stable. This retail space will be converted ble office space. An up-to-date IT infrastructure is crucial into showrooms and flagship stores, breaking down the whenever letting office space. Besides the impact of digital- barrier between over-the-counter retail and e-commerce isation on demand for rental space and investor interest in by focusing on customer retention. Customers are inspired specific asset classes, digitalisation goes hand in hand and advised in-store so that they buy products online after- with other benefits. These include the simplification of the wards. However, demand for retail space in B- or C-grade transaction process and development projects brought locations is expected to decline. about by storing documents and data and making them available to potential investors or project members in the There is no definitive answer to the question of what impact cloud or in data centres. digitalisation will have on office buildings and forecast demand for office space. Digitalisation brings with it a fear that jobs Furthermore, digitalisation is giving rise to additional financ- will be replaced by technology and automation. However, it ing instruments such as crowdfunding, providing developers is evident that the digital economy also creates new employ- and investors with alternative means of raising equity. Thus, ment. According to the Bundesagentur für Arbeit (the German digitalisation not only leads to a fear of vacant office and retail Federal Labour Agency), employment in the digital economy buildings, but it also generates demand for alternative asset increased in four of the top five locations in Germany between classes and can actually allow developers and investors to meet 2008 and 2013. This increase ranged from 17.4% in Frankfurt (increasing) demand. to 44.0% in Berlin. Munich was the only city where employment in the digital economy decreased, albeit by only 9.2%. See our SnapShot! on digitalisation for a look at the impact of According to calculations by Investitionsbank Berlin, the digi- digitalisation in the real estate industry in other European markets: tal economy could create around 270,000 additional jobs in https://assets.kpmg.com/content/dam/kpmg/ch/pdf/european- Berlin alone. snaphot-on-digitalization-en.pdf

Development of digital take-up For further information, please contact: 300,000 250,000 Gunther Liermann

200,000 Partner, Corporate Finance Real Estate +49 69 9587 4023 150,000 [email protected] In sq. m. 100,000

50,000 Niels P. E. Buck Partner, Transaction Services +49 40 32015 5848 Berlin

Munich [email protected] Frankfurt Hamburg Dusseldorf

2013 2014 2015 Sven Andersen Partner, Real Estate M&A Source: BNP Paribas Real Estate +49 69 9587 4973 [email protected] Digital economy companies are also driving demand for office space. The take-up generated by these companies amounted to approximately 625,000 square metres in 2015, an increase of about 60% compared to 2013. Berlin plays an exceptionally important role as Germany’s ‘digital hotspot’. Whilst digital companies accounted for approximately 21% of take-up in the capital in 2013, their share of office space take-up in Berlin reached around 39% in 2015.

From the outside, Germans often appear to be reserved, grumpy and uptight. Even though every stereo- type has a grain of truth, we Germans are just as friendly, open and welcoming as any other nation – just in our own way.

Understanding German mentality can be a challenge, espe- Please don’t misunderstand us. Just because we are grum- cially when it comes to meeting people for the first time. bling doesn’t mean that we are dissatisfied. Citizens of When you arrive in Germany, don’t expect to be treated cour- Hamburg have been complaining about the long-running teously anywhere that provides a service. Bus drivers, train construction of the city’s new concert hall, the Elbphilhar- conductors, salespeople, civil servants – almost everybody monie, for years, and now they warmly and proudly refer to will seem mad at you if you have an extra question, or do it as ”Elphi”. something a bit less smoothly than people born here. Appar- ently, there is a reason why the service sector represents a Grumpiness aside, most Germans demonstrate a great will- comparatively low share of the economy: ingness to help whenever help is really needed. When large numbers of refugees arrived at the train station in Germans love to grumble – some say that we are the cham- Munich, they were greeted with food and teddy bears. The pions of moaning. ”No” and ”but” are among the favour- civilian effort to cope with this challenge is impressive and ite words in the German language. It is somewhat surprising greatly influences what ”Willkommenskultur” stands for. that Grumpy Cat isn’t German. However, most of the time, we don’t want to deny or contradict: we simply want to add We might be straight-forward and objective at the office, but another point of view. So please don’t be too hard on us, it sometimes a reserved manner is actually the German way is in our nature to strive for quality. If we want to express of showing appreciation and respect. In the end, it is the something positive, German grammar allows us to use a same story as anywhere across the globe: take your time, double negative – just perfect for us. What do we grumble share a glass of beer and say “Hi”, and you will realise that about? Often, it is about someone apparently having done an Germans are warm-hearted and welcoming people. We can imperfect job. An airport that was scheduled to open years sometimes be a hard nut to crack, we admit it, but never- ago but is still under construction blows everybody’s mind. theless, welcome to Germany!

For further information, please contact:

Joachim von Prittwitz Senior Manager International Business KPMG, Germany [email protected]

Daimler, Bilfinger and Porsche are just three examples of successful products originating from south-western Germany. Discover a region full of entrepreneurial spirit.

Stuttgart Region » The Southwest is one of Germany’s powerhouses. Its attractive infrastructure, sophisticated research environment and highly qualified population make it a splendid investment opportunity. If you are looking for the hidden champi- ons for which Germany is famous, chances are you will find them in the Southwest. Economic reasoning is deeply rooted here.

Booming industry is matched by an attractive landscape, including the Black Forest and the Upper Rhine valley. The region produces some of the world’s finest wines and is known for its delicious dishes. However, your German skills For further information, please contact: might not get you very far due to the strong dialect. A famous ad for Baden-Württemberg ran the slogan, “We can Ulrich Ackermann do everything. Except speak standard German.” However, Regional Head Southwest Stuttgart, we are certain you will understand our partner Arnd Klein KPMG in Germany when he introduces you to Stuttgart and the Southwest. [email protected]

With effect from 1 January 2017, the salary criteria for EU Blue Cards issued by German authorities have increased and the new criteria also apply to EU Blue Card-based entry visas (national visas).

The German government has increased the minimum wage. EU Blue Card salary criteria Introduced only two years ago, the minimum gross wage has now been raised to 8.84 euros per hour with effect The EU Blue Card is an important type of combined resi- from the beginning of this year, up from 8.50 euros. It dence and work permit under German immigration law. affects all individuals working in Germany, regardless of their Although visas are regularly issued with a validity of 90 nationality. This takes precedence over any other agree- days, entry visas are mainly issued under the same requirements in employment contracts or assignment contracts. ments as permanent EU Blue Cards:

Furthermore, Germany has revised its salary criteria for the • Work in Germany under a local employment contract EU Blue Cards that it issues. For shortage occupations, the new criterion is 39,624 euros (in 2016: 38,688 euros) and for • Possession of a German (or equivalent foreign) all other occupations it is 50,800 euros (in 2016: 49,600 university degree euros). All applications for EU Blue Cards or EU Blue Card- based entry visas (national visas) bearing a start date of 1 • A salary that complies with the salary criteria January 2017 or later have to comply with the new salary criteria. In terms of salary, German immigration law differentiates between shortage occupations and other occupations. The Companies intending to hire (non-privileged) third-country location of a worker’s employing entity is not taken into nationals have to take the new salary criteria into account account, so even foreign companies located abroad, which when offering employment contracts to candidates. Entry assign employees to Germany, are legally required to pay the visas (national visas) and EU Blue Cards that have already statutory minimum wage during an assignment. Individuals been issued are not affected by the new salary criteria, so can sue their employers – even if they are located abroad – in the related employment contracts do not need to be amended. Germany if they are not paid according to Germany’s minimum wage rules.

For additional information or assistance, please contact:

KPMG Rechtsanwaltsgesellschaft mbH

Dr. Thomas Wolf Partner, Employment & Global Immigration Services [email protected]

Dr. Sebastian Klaus Partner, Employment & Global Immigration Services [email protected]

Germany's regions have developed special economic profiles. In our new series, we let external experts share their insights. First, Dr. Wolfgang Hübschle explains why Munich and the Internet of Things match so well.

Munich and the Internet of Things – you could be forgiven for Israeli manufacturer of driver assistance systems. And thinking they were made for each other. The European Com- BMW isn’t the only vehicle manufacturer with IoT ambitions mission had good reason for selecting Munich as the EU’s either. VW is also actively looking for innovations. That’s premier ICT hub, ahead of London and Paris, in 2014. A range why in 2014 it established its Data Lab in Munich, where of new offshoots by global players and a lively start-up scene new IT solutions for big data and the Internet of Things are are further boosting Munich’s dynamism, as high-profile ex- to come to fruition, in close collaboration with universities amples testify. and technology partners.

The IoT world in Munich Innovative collaboration with Watson IoT

For instance, the Chinese telecommunications group Huawei IBM’s announcement that it would be setting up the global decided to locate the headquarters of its European Research headquarters of its Watson IoT unit in Munich created quite a Centre (ERC), with a total of 18 associated research institutions stir in the digital industry. With its hub, IBM offers customers, across Europe, in the Bavarian capital. Since 2015, Huawei start-ups, universities, research institutions and partners has also been ramping up a 5G test bed in Munich, which access to the cloud-based IBM Watson IoT platform to galvan- will set new benchmarks for mobile standards. Moreover, ise the development of cognitive apps, services and solutions. the Chinese group and the German software giant SAP The first few companies have seized the opportunity with formed a strategic partnership in 2012, covering joint work enthusiasm: last year, IBM formed a strategic partnership with on innovations in the field of Industry 4.0. For SAP too, this the automotive supplier Schaeffler and also launched a joint venture is just one building block among many; there is also research programme, IBM Cognitive Computing, with BMW. an SAP IoT lab in Munich. “The German economy is superbly positioned for digitalisation and Industry 4.0 – its key advantage is its high level of industri- Aside from Huawei, the Munich region has a string of other alisation,” says Martina Koederitz, CEO of IBM Deutschland companies with a prime focus on Internet of Things work and IBM General Manager for Austria and Switzerland. Among and research. These include Intel, who recently decided that other projects, Watson is to further revolutionise Bragi’s smart IoT will be at the core of its future strategy. This is good news headphones (hearables), proving that start-ups can also bene- for Munich because Intel already operates three IoT units fit from the IoT platform’s capacities for innovation. there, including its wholly owned subsidiary Wind River. There is also Intel’s IoT Ignition Lab, which is driving research A key ingredient of Munich’s digital ecosystem is its vivid into IoT solutions for a range of vertical industries as well as start-up scene, which – in mutual symbiosis with global oper- supporting relevant start-ups. Intel, like many others, bene- ators – ensures a constant supply of ideas and strengthens fits from collaboration with both locally based companies and the system’s capacities and innovativeness. The intelligent global partnerships. For example, Intel has announced that it heating assistant tado° and the smart glove ProGlove are two will carry out road tests with 40 autonomous vehicles this of many that could be mentioned here. The developments year in collaboration with car maker BMW and Mobileye, an and collaborations in the local IoT scene should ensure that Munich maintains and extends its global IoT leadership.

For further information, please contact:

Andreas Glunz Managing Partner International Business KPMG, Germany [email protected]

Dr. Wolfgang Hübschle Head of Invest in Bavaria [email protected]

Great location – recent investments in Bavaria by foreign and domestic companies from various industries

Gerresheimer Tettau GmbH

HEINZ-GLAS GmbH &. Co. KGaA Tettau Sandler AG Hof Schaefﬂer Technologies AG & Co. KG Schweinfurt Bayreuth Siemens Aktiengesellschaft

Bamberg Weiden Nexans autoelectric GmbH, ADIDAS AG Würzburg BHS Trading S.a.r.L. Neustadt Tirschenreuth

Neustadt a. d. Aisch – W. MARKGRAF GmbH & Co. KG Bad Windsheim Nuremberg Amberg

Ansbach Crown Gabelstapler Cham GmbH & Co. KG Roding Innocoll GmbH Regensburg Liebherr- Saal International Deggendorf Deutschland Ingolstadt Schierling Wallersdorf GmbH SMP Deutschland GmbH Passau Landshut

Augsburg

KUKA Aktiengesellschaft BMW AG Munich Penzberg ProSiebenSat.1 Media SE Würzburg Kempten

Lindberg

General Electric Company, Google Inc., Huawei Technologies Co., Ltd. International Business Machines Corporation, Intel Corporation, Microsoft Corporation

Liebherr-International Roche Deutschland Deutschland GmbH Holding GmbH

CeBIT IT trade show 20–24 March, Hanover That special HANNOVER MESSE industrial show 24–28 April, Hanover event 2017 IIHF Ice Hockey World Championship 5–21 May, Cologne When it comes to computer expos, 2017 World Table Tennis Championships you won’t find one larger than 29 May–5 June, Dusseldorf CeBIT, either in terms of size or attendance figures. It is the most documenta art exhibition significant trade fair in the field of 10 June–17 September, Kassel office automation, information Conference G20 Africa Partnership technology and telecommunica- 12–13 June, Berlin tion (translated and abbreviated as ‘CeBIT’). 49 per cent of the visitors say there is no exhibition like this. KPMG events: Roughly a third of the attendees are top managers, which further underlines the event’s huge im- Business Breakfast: hot topics for US companies pact and future orientation. 03 March, Dusseldorf 07 March, Stuttgart 15 March, Munich CeBIT will take place in Hanover Brexit Roadshow: the impact on the German economy (in German) (northern Germany) from 20 to 24 07 March, Berlin 21 March, Munich March. It is certainly worth a visit! 08 March, Frankfurt (Main) 23 March, Cologne 09 March, Dusseldorf 29 March, Nuremberg 14 March, Hanover 04 April, Hamburg 16 March, Stuttgart Real Estate Fund Conference 01–02 June, Frankfurt

© 2017 KPMG AG Wirtschaftsprüfungsgesellschaft, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks of KPMG International. 16 | Business in Germany | March 2017 A quick German 10 Three Questions lesson ... for Bernhard Mattes, President of the American Chamber of Commerce in Germany e.V. 1. How do Americans perceive Germany’s economic role in the world? Frauenquote, die – a specific term Because of its strong economy and robust industrial core, Germany is not only a describing a regulation controlling reliable trading partner, but has also returned to its position as the world's big- the representation of women in gest exporter. The US is an important consumer of German goods – particularly companies’ decision-making bod- in sectors such as machinery, vehicles and pharmaceuticals. Moreover, German ies, which women have been fight- companies represent substantial investments in the US. Roughly 3,500 German ing for for a long time. German subsidiaries employ around 620,000 American workers. politicians use this expression to emphasise their belief in gender 2. In your view, what is the particular strength of German industry? equality. New legislation requires High-quality products and a highly skilled workforce ensure that the “Made in women to make up 30 per cent of Germany” seal stands for excellence, innovation and efficiency. The German some major corporations’ supervi- economy relies on a strong manufacturing base, and its dual training system sory boards – is this a good or a bad serves as a model for countries around the world. thing? There’s a broad spectrum of opinions. 3. Which cultural site or event in Germany would you recommend as a must-see? As a long-time resident of Cologne, I definitely recommend visiting the city’s landmark – the Cologne Cathedral – whose tall twin spires can be seen from miles away. The Rheingau Music Festival is also one of my favourite cultural events – you can listen to world-class music in historic locations, surrounded by the beautiful vineyards of the Rheingau.

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KPMG AG Wirtschaftsprüfungsgesellschaft If you would like to receive this or other The information contained herein is of a general KPMG newsletters, please subscribe here. nature and is not intended to address the circum- Andreas Glunz* stances of any particular individual or entity. Managing Partner, International Business Feedback to the Editorial team: Although we endeavour to provide accurate and T +49 211 475-7127 Business in Germany timely information, there can be no guarantee that such information is accurate on the date it is [email protected] www.kpmg.de received or that it will continue to be accurate in the future. No one should act on such information Joachim von Prittwitz www.kpmg.de/socialmedia without appropriate professional advice after a Senior Manager, International Business thorough examination of the particular situation. T +49 30 2068-4195 [email protected] * Responsible according to German Law (§7 (2) Berliner PresseG