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IndustryOverview

IndustryOverview

IndustryOverview

Germanys Business Environment:A Brief Guide

BusinessLocationGermany


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ermany at a Glance

Germany in Numbers

Economy

GDP (2008): EUR 2.5 trillionGDP per capita (2008): EUR 30,343GDP per sector (2008):

Services 50.9%Industry 30.4%Trade 17.9%Agriculture 0.9 %

GDP growth 2008: 1.3%

Inflation rate 2008: 2.8%Exports 2008: EUR 995 billionImports 2008: EUR 819 billion

Economic StructureNumber of companies(2007): 3.63 millionPercentage of which areSMEs: 99.7%Total turnover all companies(2007): EUR 5.15 billionTotal SME turnover: 37.5%

Total employees (2007):30 millionNumber of employees in SMEs: 70.5%

Constitutional OrderForm of government:Parliamentary federal republic

Head of state:State President Prof. Dr. Horst Khler

Head of government:Federal Chancellor Dr. Angela Merkel

Legislative body:Bundestag (Parliament) and

Bundesrat (Council ofConstituent States)

Administration: 16 state parliaments

Population and Land AreaArea: 357,114 kmCoastline: 2,389 kmPopulation: 82 millionWorking population: 40 millionBiggest cities:

Berlin (3.4 million)Hamburg (1.8 million)Munich (1.3 million)

InfrastructureInternational passenger airports: 19Seaports: 34Inner harbors: 250Highways: 12,400 kmFederal roads: 41,000 kmRailways: 41,300 kmWaterways: 7,500 km


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Germanys Business Environment 2009 www.gtai.com 3

Europes Economic Hub

Europes Largest Market

Germany is the largest market inEurope. It constitutes 20 percentof European GDP, and is home to17 percent of the total EuropeanUnion (EU) population. Stable annualaverage GDP growth of 1.8 percentthe past five years provides proofof further economic potential. The

German economy is both highlyindustrialized and diversified; withequal focus placed on services andproduction.

Germany is well placed to meet thechallenges of the future thanks tosignificant amounts of federal andprivate funds made available forresearch and development (R&D)purposes. These funds are also usedto explore the major potential in anumber of forward-looking industrysectors.

The Worlds Export Champion

The German economy has provenresilient in the face of the turbu-lence caused by the internationalfinancial downturn. Germanysproducts have continued to beexport hits worldwide. Since 2003,when Germany overtook the UnitedStates to become world exportleader, its exports have grown by

around eight percent each year.In 2008, Germany exported goodsworth EUR 995 billion and importedgoods worth EUR 819 billion. Thesefigures mark a high point in Ger-manys trade history.

German-produced goods from thechemical, automotive, and machin-ery & equipment industries are inparticularly high demand worldwide.Germanys main trading partnersnumber European countries such

as France, UK, Italy, and the Neth-erlands as well as international

GDP

(in EUR bn)

Share of

Total GDP

(EU-27)

Population

(in million)

Share of

Total

Population

(EU-27)

Germany 2,496 20% 82 17%

France 1,950 16% 64 13%

UK 1,819 15% 61 12%

Spain 1,089 9% 45 9%Netherlands 596 5% 16 3%

Poland 362 3% 38 8%

CzechRep.* 148 1% 10 2%SlovakRep. 65 1% 5 1%USA 9,819 304

Japan 3,329 128

EU-27 12,506 497

Eurozone 9,269 327

* Estimate

Source: Eurostat, 2009. US Census Bureau, 2009. Japanese Statistics Bureau, 2009

markets including the United States,China, Russia, and Japan. Sixty-fourpercent of all exports are exportedto European countries, of which18 percent go to eastern Europeancountries.

Small and Medium-sized

Enterprises: Germanys

Economic Backbone

Exports are driven by Germanys

backbone of highly innovative smalland medium-sized enterprises(SMEs). These constitute 99.7percent of all companies, employ-ing 70.5 percent of all employeesin Germany. Many of these SMEsare world market leaders in theirrespective niche segments. To-gether with internationally leadingcompanies - such as Bayer, BASF,Daimler, Volkswagen, and Siemensto name but a few - they make upGermanys manufacturing

industrial base.

Manufacturing Location GermanyGerman companies in the manu-facturing industry represent 8.5percent of Europes manufacturingcompanies and generate 26 percentof the EUs manufacturing turnover.One in five investment projects ismanufacturing site located - mak-ing this the second most importantbusiness activity in Germany. In-creasingly more foreign companies

are placing their faith in Germany asa vital production site location, andare benefiting from the countrysexcellent business framework.

Share of Total GDP and Population in the European Union 2008


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4 Germanys Business Environment 2009

Paving the Way forForeign DirectInvestment

Free and Open Markets

Germany has a welcoming attitudetowards foreign direct investment(FDI). The German market is open forinvestment in practically all industrysectors, and business activities are

free from regulations restrictingday-to-day business. German lawmakes no distinction between Ger-mans and foreign nationals regardinginvestments or the establishment ofcompanies. The legal framework forFDI in Germany favors the principleof freedom of foreign trade and pay-ment. There are no restrictions orbarriers to capital transactions orcurrency transfers, real estate pur-chases, repatriation of profits,or access to foreign exchanges.

Global FDI MagnetAccording to the United Nations Con-ference on Trade and Development(UNCTAD), Germany ranks amongthe worlds leading countries for for-eign direct investments with morethan EUR 476 billion in FDI stocksin 2008. Official German statisticsfurther underscore Germanys at-tractiveness as a business location.Bundesbank (German Central Bank)

FDI stock statistics indicate a growthof 2.2 percent in 2007 to EUR 459billion.

Seventy-four percent (or EUR 340billion) of all FDI stocks in Germanyoriginate from within the EU-27, witha further nine percent stemmingfrom the remaining European non-EUcountries. Investments from outsidethe EU are continuing to grow. NorthAmerica accounts for 11 percent ofFDI stock, with Asia and the rest of

the world having shares of four andtwo percent respectively.

First Choice Business Location

A recent study conducted by theAmerican Chamber of Commercehighlights the positive regard inwhich the German business environ-ment is held by US companies. In-vited to indicate their main medium-term investment focus within the EU,65 percent of participating American

companies named Germany as theirfirst choice; followed by EasternEurope (53 percent), and the UK (30percent) respectively.

The UNCTAD World Investment Pros-pects Survey 2009-2011 confirmsGermanys reputation as one of themost attractive business locations incontinental Europe. Germany rankssecond within the EU-15, and seventhinternationally in the most attrac-tive business locations in the relevant

regions 2008-2010 category.

UNCTAD World Investment

Prospects Survey 2009-2011

Responding companies highlightedthe following criteria as the rea-sons why they cherish Germany asa great place to do business.

Skilled laborAvailability of sufficient suppliersQuality of infrastructure

Access to the regional market

Incentives for Investment Projects

Germany offers a comprehensiveraft of different incentives to allinvestors regardless of whetherthey are from Germany or not. Fundsare provided by the German govern-ment, the individual federal states,and the European Union (EU). Theseare predominantly aimed at new in-vestments geared towards promot-ing economic growth. Germany hasEUR 26.3 billion funding providedby the EU (co-financed using meansobtained from German national andregional budgets) at its disposal un-til 2013. In addition, Germany and itsindividual federal states make theirown incentives funds available.

There are a number of incentivesprograms available which can begrouped into two overall packages:

theinvestment incentives packagewhich includes different measuresto reimburse investment costs; andthe operational incentives packageto subsidize costs once the location-based investment has been realized.

Foreign Direct Investment

USA 1,549.4

France 674.0

UK 668.3

Hong Kong 568.2

Germany** 476.3

Netherlands 438.3

Spain 431.6

Japan 138.3

Poland 109.7

Czech Republic 77.8

Bulgaria 31.3

SlovakRepublic** 31.2EU-27 4,713.4

World 10,136.9

* Exchange rate annual average 2008** Estimates

Source: UNCTAD, 2009

International FDI Stock Rating

2008 (in EUR bn*)


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High-Tech Germany

High Turnover with

Innovative ProductsOver 27 percent of German manu-facturing company turnover isgenerated from innovative products.These are products which are new tothe enterprise and to the market. InFrance and the UK, this ratio is com-

paratively low at around 16 percent,whereas in Finland the level lies at21 percent. The European averagelies at 19 percent.

A 2009 study carried out by the Ger-man Institute of Economic Researchfound that no other industrializedcountry produces a larger shareof gross value added in research-intensive manufacturing indus-tries than Germany. This includescutting-edge technology productswhich use more than seven percentof their turnover for R&D expenses,and high-tech products whose R&Dbudgets range between 2.5 and 7percent of revenue generated. Byquickly implementing the very latestinnovations, companies are able toswiftly secure their leading roles intheir respective fields.

Source: German Institute for Economic Research, 2009

Share of Research-Intensive Industries in Selected Countries 2006 (as percent of gross value added)

Germany USA Japan EU-14

16

14

12

10

8

6

4

2

0

Research-Intensive

Industries (total)

High-Tech Industries

Cutting-Edge Technologies

Note: High-tech industries are

characterized by high internal

R&D expenditures of between

2.5%-7% of average OECD turn-

over. Cutting-edge technologies

show an internal R&D intensity of

more than 7% of average OECDturnover.

14.9

11.8

3.0

6.

9

4.

0

2.

9

6.

9

11.

6

7.

6

4.1

4.

8

2.1

25.36 - 30.6 20.12 - 25.36 14.88 - 20.12

9.64 - 14.88 4.4 - 9.64 N/A

Innovation Turnover 2006 (as percent of total turnover)

R&D Framework

Source: Eurostat, 2009


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High-Tech Products

Made in GermanyGerman companies are globalleaders in the development of newtechnologies. Standing for highquality and innovation, the Made inGermany brand has been a seal ofquality for over a century. In 2007,Germany exported high-tech goodsto the value of EUR 114 billion making it the top exporter in Europe

and third worldwide.

In a 2007 study by Eurostat, six Ger-man regions counted amongst thetop 20 high-tech regions in Europein terms of absolute employment inhigh-tech sectors: Upper Bavaria,Duesseldorf, Darmstadt, Cologne,Karlsruhe, and Stuttgart. While themajority of these regions providedmost jobs in high-tech knowledgeintensive services, German re-gions stood out compared to theircompetitors for jobs in high-techmanufacturing sectors. In Europeancomparison, Germany is the secondleading nation in terms of employeesworking in high and medium-to-hightechnology manufacturing sectors.

Public R&D Support:

Germanys High-Tech Strategy

As R&D is considered to be amongthe most important areas for the de-velopment of the German economy,

both industry and the public sectorhave made a commitment to spendaround three percent of nationalGDP per year on R&D activities. Thisamounts to approximately EUR 70billion R&D spending each year. Inaddition, an unprecedented cam-paign to foster the advancement ofnew technologies has been launchedby the German government. Thiscampaign known as the High-TechStrategy is combining the re-sources of all government ministries,

committing EUR 4 billion annuallyfor the development of cutting-edge

technologies. R&D projects can ac-cordingly count on numerous formsof financial support. There are manyprograms allocating support in theform of R&D grants, interest-re-duced loans, and special partnershipprograms.

World-Class Know-How

While Germany is home to the larg-est scientist population in Europe 18 percent of all EU scientists liveand work in Germany German sci-entists work on projects all aroundthe world. For example, researchresults within the Max-Planck-Society are achieved through fruitfulpartnerships with more than 5,000partners in research institutionsacross 108 countries. Cooperation

projects between companies and ac-ademic research institutes providean efficient way to close knowledgegaps. Scientists can be easily inte-grated into the team of developersand researchers of the companiesand, more and more often, institutesprovide for the necessary laboratoryfacilities.

Innovation Leader Germany

German patent figures pay testi-mony to the innovation work done in

German companies: with over 13,000patents granted at the European

Patent Office in 2008, Germanysshare is twice as large as that ofFrance and the UK combined. Ger-many is also the leading Europeannation in triadic patents (patentsregistered at the three major globalpatent offices: the European Pat-ent Office, the United States Pat-ent and Trademark Office, and theJapan Patent Office). With 75 triadicpatents per million inhabitants in2007, Germany ranks third only afterSwitzerland and Japan.

Profiting from Innovation Clusters

The German R&D landscape issupported by close cooperation andties between the worlds of scienceand industry. Germany is home to anumber of world-renowned funda-

mental research institutes suchas the Max-Planck-Society, Helm-holtz Association, and the LeibnitzAssociation that are helping defineand set international standards. Theapplication-oriented Fraunhofer-Gesellschaft supports small andmedium-sized enterprises in par-ticular (with more than 80 institutes,14,000 employees, and EUR 1.4 bil-lion research funds every year).


Share of EU Scientist Population 2007 (as percent)

Poland 8%

Czech Republic 2%

UK 13%

France 11%

Netherlands 5%

SlovakRepublic 1%

Others(19 EU countries) 32%

Germany 18%

Spain 10%


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Photos:ICT:fotolia.com-onlinebewerbung.de,ChemicalsandPolymers:istockphotot.cpm-photo168,TransportandLogistics:istockphoto.com-JoergReimann

Transport and Logistics

Subsegments/Industry Focus

New materials:- Lightweight construction- Fiber-reinforced composites

- NanotechnologyProduction and processing of plastics

Industrial biotechnology

Information and Communication

Technologies (ICT)

Business Potentials

Subsegments/Industry Focus Games SaaS IT Security Embedded Systems Mobile Applications

Second largest market in Europe in

terms of revenue (19% of the EU market) More than EUR 133 billion market

volume in 2008, excluding customer

electronics With 829,000 employees it is the second

largest industry in Germany in terms of

employmentDrives 80 percent of innovations inGermanys key industries (including the

automotive, medical technologies and

logistics industries)

Chemicals and Polymers

Turnover: EUR 178.5 billion A quarter of all chemicals

produced in Europe in 2007 came

from Germany (24.4%)

World export champion:EUR 127.6 billion

Investments (tangible assets):

EUR 6.2 billion No.1 in Europe FDI in Germany:

EUR 32.2 billion R&D expenditures:

EUR 9.5 billion No.1 in Europe

EUR 218 billion revenue in 2008 Europes largest logistics market Global leader in logistics

innovation and technologies 2.8 million work force in 2008 Home to the worlds leading logistics

companies including Deutsche Post

World Net (No.1) and DHL

Subsegments/Industry Focus Logistics services 3PLs, warehousing and distribution Contract logistics, consumer goods

transport, air, sea, and land freight

(rail and road) Advanced technologies (e.g. RFID)


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Photovoltaics

Subsegments/Industry Focus Wafer-based PV (wafer, cell, module) Thin-film PV Organic PV R&D activities Balance of system components Equipment manufacturer Material supply industries

(silicon, glass, EVA)

Process engineering

Energy-efficient Mobility

Subsegments/Industry Focus City compact cars

Improving energy efficiency of

the internal combustion engine

Alternative drive technologies

(e.g. electric hybrid fuel cell)Smart traffic management

German market volume: EUR 23 billion

Largest market in Europe andthird largest in the world

German annual output:

EUR 17.8 billion (+2.5% growth) Exports of EUR 11.5 billion in 2008

(+6.7%) Second largest export

nation worldwide (export ratio 64.6%) More than 16,700 registered

patents for medical engineering

Subsegments/Industry Focus

Cardiology Diagnostics (telemedicine) Orthopedics Minimal invasive surgery Ophthalmology

The worlds leading PV market with

5.4 GW of cumulated power in 2008

Expected market growth of 15-20%

per annum until 2013 More than EUR 9.5 billion industry

turnover in 2008 Concentrated know-how: around

70 PV manufacturers (e.g. SolarWorld,

Q-Cells, First Solar, Bosch Solar En-

ergy) 100 PV equipment manufacturers

(e.g. Roth&Rau, Schmid,

Applied Materials, centrotherm)

World market potential for energyefficient passenger cars between

EUR 325 and 500 billion in 2020 Global market expected to grow

by 29% annually until 2020

German car makers potential forenergy efficient drives:

EUR 75 billion (2020) Energy efficiency improvements for

passenger cars offer potential savings

until 2020: EUR 11 billion

Medical Technologies


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Cost Effectiveness

High Productivity

Germany experienced a majorincrease in productivity the past de-cade an increase much higher thanthe respective labor cost increase.This has led to falling unit laborcosts which represent a genuinecompetitive cost advantage partic-ularly in manufacturing. In marked

contrast to other European countrieswhich have experienced an overallincrease in unit labor costs, Germa-nys unit labor costs decreased by ayearly average of 0.7 percent for theperiod 2004 to 2007.

Germanys high productivity isclosely linked to its excellentemployee and production processstandards. This has been confirmedby a study of international executivesconducted by the World EconomicForum. According to the study find-ings, Germany is seen as a countrywhere the best and most efficientprocess technology is applied.

Stable Labor Costs

Another decisive argument in favorof Germany as a premium businesslocation has been the significantclosing of the labor cost gap be-tween Germany and its eastern Eu-ropean neighbors. In fact, Germany

has gained the labor-cost edge inrecent years. Since 2000 wages haverisen in most European countries at a rate significantly above that ofthe EU-27 average increase of 3.7percent. While some countries particularly those in eastern Europe experienced a rise of more thanseven percent, Germany recordedthe lowest labor cost growth withinthe EU at just two percent.

Competitive Tax System Reforms

Germany offers a highly com-petitive tax system for companies:combining flexibility with moder-ate tax rates. The German govern-ment has implemented root andbranch reforms of the tax systemto make the country a more attrac-tive business proposition. Two coreelements of the reforms are analmost one-quarter reduction of the

average corporate tax burden and

European Labor Cost Growth 20002008 (yearly average in percent)


Germany

Italy

France

EU27

Netherlands

Spain

UK

Czech Rep.

PolandSlovak Rep.

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

2.0%

2.7%

3.4%

3.7%

3.8%

4.6%

4.9%

7.2%

7.5% 8.4%

Average Corporate Tax Burden of Selected Countries 2009 (in percent)

Note: 1 Including 15% corporate income tax, 0.83% solidarit y surcharge, and 14% trade tax

(assumed municipal collection rate: 400%)2 Top corporate income taxation rate; lower starting rates or other special tax rates available.

Example USA: progres sive rate from 15% to 35% (> USD 18,330,00 0)Source: German Federal Ministry of Finance, 2009

Slovak Rep.

Poland

Czech Rep.

Hungary

NetherlandsUK

Germany

Spain

Italy

Belgium

France

USA (NY)

Japan

0% 5% 10% 15% 20% 25% 30% 35% 40%

19.00%

19.00%

21.00%

21.28%

25.50%28.00%

2

29.83%1

30.00%2

31.40%

33.99%

34.43%2

39.62%2

42.34%2

a reduction of the trade tax burden.On average, corporations now facean overall tax burden of less than 30percent. Partnerships benefit froma reduction of personal income taxon undistributed profits. This makesGermanys corporate tax system oneof the worlds most competitive ininternational comparison. Furtherreforms of the tax system are cur-rently under discussion.

Business Climate


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Outstanding Reputation

German labor flexibility is reflected inhigher than average employee motiva-tion levels exceeding those of mostleading industrialized nations. In fact,according to the IMD World Competi-tiveness Yearbook, German employeemotivation levels are greater thanthose of their counterparts in the US,China, Russia, Poland, France and theUK. A direct corollary of this is the factthat Germans work more than theirinternational peers (41.2 hours perweek) and lose less days per annum

to strike action than other Europeannations (significantly below the EU-27average according to Eurostat).

Labor MarketAvailability

Highly Skilled andFlexible Workforce

The German workforce comprisesover 40 million people making itthe largest pool of ready labor in theEU. Germanys world-class educa-tion system ensures that the highest

standards are always met. More than80 percent of the German workforcehas received formal vocational train-ing or is in possession of an aca-demic degree. German federal andstate governments agreed in 2008 toincrease public and private educationinvestment levels to seven percent ofgross domestic product by 2015.This far-reaching commitment willsee the creation of additional train-ing places and promotional scholar-ships for the provision of a steady

flow of highly trained labor, which hasalready resulted in a record num-ber of student enrollments. Morethan 396,000 students in more than400 universities started their aca-demic studies in the academic year2008/2009, and technical fields ex-perienced an undergraduate enroll-ment level increase of 14 percent.

Engineering Excellence

Highly skilled and specialized employ-ees are a key feature of the Germanlabor market and will remain so in thefuture. According to OECD statistics,Germany has one of the highest ratesof graduates with a doctoral degree.With 315 PhD graduates per millioninhabitants, it ranks second in a com-parison of OECD countries. Germanysshare of university students in thesciences, mathematics, computer sci-ences, and engineering is the secondhighest in the EU, with 31 percentof all students. German universities

have introduced masters and bachelordegrees for improved internationalacceptance and comparison.

Dual Education System

Germany provides direct access toa highly qualified and flexible laborpool. The countrys dual educationsystem unique in combining thebenefits of classroom-based andon-the-job training over a period oftwo to three years is specificallygeared to meet industry needs.There are currently around 350occupations recognized by thesystem. The German Chambersof Industry and Commerce (IHKs)ensure that exacting standards are

rigidly adhered to, guaranteeing thequality of training provided acrossGermany.

Workforce in Germany by Level of Professional Education 2008

(as percent of total workforce)

Skilled Craftsmen(dual educationsystem apprenti-

ces) 56%

Vocational Col-lege Graduates& Technicians(master crafts-

men) 8%

Unskilled 19%University Graduates 17%

Source: Federal Statistical Office, 2009

Average Hours Worked per Week in Selected Countries 2008

(7 = efficient with clear, neutral processes; 1 = inef ficient)

Source: World Economic Forum, 2009

Czech Rep.

Poland

Germany

UK

Netherlands

Sweden

Spain

Slovak Rep.

Italy

Belgium

France

36 37 38 39 40 41 42

41.7

41.7

41.2

40.9

39.9

39.6

39.6

39.5

39.5

38.6

38.4


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Closer to Market withFirst ClassInfrastructure

Europes Global Logistics Hub

With state-of-the-art transporta-tion networks by road, rail, sea, andinland waterways as well as a densenetwork of both national and inter-national airports, Germany provides

easy access to domestic and inter-national markets. Little wonder thatGermany is a global logistics hub.Its share of the European logisticsmarket around 28 percent makesit a major player in the economicdevelopment of Europe. More goodspass through Germany than throughany other country in Europe.

World Class TransportInfrastructure

Germanys infrastructure excel-lence is confirmed by a number ofrecent studies including the SwissIMDs World Competitiveness Year-book and various UNCTAD inves-tor surveys. The 2009-2010 GlobalCompetitiveness Report of the WorldEconomic Forum ranked Germanyfirst for infrastructure; singling outGermanys extensive and efficientinfrastructure for highly efficienttransportation of goods and passen-gers for special praise. Accumulated

in this score for Germany are highmarks for the quality of roads andair transport, excellent railroadsand port infrastructure, as wellas its communications and energyinfrastructure.

World Class Network

Infrastructure

Among the highlights of the coun-trys network infrastructure areEuropes second largest port inHamburg (measured in container

port traffic), Europes largest portcontainer terminal in Bremer-

haven, and over 250 inland ports.The Rhine and Elbe rivers serve asmajor arteries for barge traffic tothe deepwater ports in various riverbights and the north and northwestcoastlines.

Germany has a dense network ofairports (of which 19 are inter-national airports). Among them,Frankfurt is the worlds 7th and 9th

largest airport in terms of cargo andpassenger volume respectively. Thecountrys highway system has one ofthe highest highway kilometer den-sity levels in Europe, and more than40,000 km railway tracks enoughto circle the globe. Its high-speedrailway network, with speeds of upto 300 km/h, is the 4th largest in theworld.

Bringing East and West Together

In the north, Germanys seaportsare an important conduit for tradewith the UK, Scandinavia, and theBaltic states. Moreover, road and raillinks through the Jutland peninsulaprovide easy access to Denmark andthe rest of Scandinavia. In the west,an extensive network of roads, raillinks and inland waterways feeds intoFrance and the Benelux countries.

To the south, Germany has strongcommercial ties with Switzerland

and Austria and direct road, railand water links with the Balkanstates. Turning eastwards, Ger-manys borders with Poland and theCzech Republic also bring Slovenia,the Slovak Republic and Hungarywithin easy reach and make themore distant markets in Greece,Turkey, Ukraine and Russia readilyaccessible.

Country Rank

Germany 1

Hong Kong 2

France 3

Singapore 4

Switzerland 5

UAE 6

Canada 7

USA 8

Austria 9

Finland 10

...

Netherlands 15

UK 20

Spain 22

China 46

Czech Republic 48

Slovak Republic 63

Poland 103


Logistics Giant

Not only is Germanys logisticsinfrastructure among the best, itscompanies are also global logisticsgiants. In fact, the worlds larg-est logistics services provider is aGerman company Deutsche PostWorld Net (DPWN). Deutsche Bahnis the worlds second largest trans-portation and logistics companyand Lufthansa Cargo is the global

air freight services leader. Withturnover of EUR 218 billion in 2008,Germanys logistics industry grewby six percent compared with 2007.No other EU country comes close toGermanys market size.


Overall Quality of Infrastructure 2009


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steps to establish a new business.All required steps are clearly de-fined. Company establishment costsare low and, moreover, can be easilydetermined from the outset.

Business investor rights are ex-pressly set out and all businessactivities are legally secured. Publicbusiness registers provide trans-parent information pertaining to

Providing for a SoundBusiness Environment

Stable and TransparentLegal System

Germany is home to a legal environ-ment rightly renowned for its stabil-ity and transparency. The WorldEconomic Forum ranked Germanyamong the leading countries of 133

competitors for its efficient legalsystem which follows a clear andneutral process. The same studyranked Germany first in terms ofsecurity of intellectual property. TheGerman judiciary is wholly indepen-dent and the civil service highly pro-fessional. Contractual agreementsare secure and intellectual propertyrights are vigorously upheld andenforced. Properly observed legalprocedures provide clarity as to therights and obligations of all parties.

A Safe and Secure

Business Landscape

Accordingly, Germany is home to aflourishing business landscape whichenjoys international recognition asone of the worlds most safe andsecure. Compared to other indus-trialized nations, Germany ranksamongst those where business pro-cesses are least impacted upon bycriminality and white collar crime.

This is borne out by the fact that ap-propriate personal security and pri-vate property checks and balancesare in place. In fact, Germany ranksahead of its nearest competitors USA, France, UK, India, China, andSpain in the IMDs World Competi-tiveness Yearbook 2009.

Setting-up Business the Easy Way

Setting up business in Germanycouldnt be easier. Company for-

mation procedures are swift andefficient, requiring only a few simple

International Legal System Efficiency Assessment 2008

(7 = efficient with clear, neutral processes; 1 = ineff icient)


Sweden

Germany

Netherlands

UK

France

USA

Japan

Spain

Czech Rep.

Poland

Slovak Rep.

0 1 2 3 4 5 6

5.8

5.2

5.1

4.9

4.8

4.3

4.2

3.6

3.5

2.8

2.5

International Intellectual Property Security Assessment 2008

(7 = strong and enforced; 1 = weak and not enforced)


Singapore

Netherlands

France

Germany

USA

Japan

UK

Spain

Czech Rep.

Slovak Rep.

Poland

0 1 2 3 4 5 6

6.2

5.8

5.8

5.7

5.4

5.4

5.3

4.3

4.0

3.7

3.6

company legal representation andindividual personnel authorized toconduct business transactions. Thisinformation is freely accessible to allbusinesspersons. As such, the riskof fraud and manipulation a majorcause for concern in some industrialnations is effectively negligible inGermany.



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Our Investment Project Consultancy Services

Germany Trade &Invest Helps You

Germany Trade & Invests teams ofindustry experts will assist you insetting up your operations in Ger-many. We support your project man-agement activities from the earlieststages of your expansion strategy.

We provide you with all of the indus-try information you need coveringeverything from key markets andrelated supply and application sec-tors to the R&D landscape. Foreigncompanies profit from our rich ex-

perience in identifying the businesslocations which best meet their spe-cific investment criteria. We helpturn your requirements into concreteinvestment site proposals; providingconsulting services to ensure youmake the right location decision. Wecoordinate site visits, meetings withpotential partners, universities, andother institutes active in the industry.

Our team of consultants is at handto provide you with the relevantbackground information on Germa-nys tax and legal system, industryregulations, and the domestic labormarket. Germany Trade & Invests

experts help you create the appro-priate financial package for your in-vestment and put you in contact withsuitable financial partners. Incen-tives specialists provide you withdetailed information about availableincentives, support you with the ap-plication process, and arrange con-tacts with local economic develop-ment corporations.

All of our investor-related servicesare treated with the utmost confiden-tiality and provided free of charge.


Project Management Assistance

Handover toregional develop-ment agency

Coordinationand supportingnegotiations withlocal authorities

Identifying ofpossible projectpartners andmatchmaking

Discussion ofmarket entrystrategies

Analyzing businessopportunities

Location Consulting /Site Evaluation

Supporting finalsite decision

Organizationof site visits

Pre-selectionof sites

Cost factor analysisIdentification ofproject-specificlocation factors

Accompanyingincentives applica-tion and establish-ment formalities

Supportingadministrativeaffairs

Organization ofmeetings withlegal advisors andfinancial partners

Consulting onproject relatedfinancing andincentives issues

Identification ofrelevant tax andlegal issues

Support Services

Decision & InvestmentStrategy Evaluation


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Publisher & Editor

Germany Trade and InvestGesellschaft fr Auenwirtschaftund Standortmarketing mbH

Friedrichstrae 6010117 BerlinGermanyT. +49 (0)30 200 099-0F. +49 (0)30 200 [email protected]

Chief Executives: Dr. Jrgen Friedrich, Michael Pfeiffer

Conception, Layout, Text, TranslationsGermany Trade & Invest

Support

Promoted by the Federal Ministry of Economics and Technology and theFederal Ministry of Transport, Building and Urban Affairs in accordance

with a German Parliament resolution.

NotesGermany Trade & Invest, November 2009All information provided by Germany Trade & Invest has been put togetherwith the utmost care. However, we assume no liability for the accuracy ofthe information provided.

Order Number

14783

Contact


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About Us

Germany Trade & Invest is

the foreign trade and inward

investment agency of the

Federal Republic of Germany.

The organization advises andsupports foreign companies

seeking to expand into the

German market, and assists

companies established in

Germany looking to enter

foreign markets.

All inquiries relating to

Germany as a business location

are treated confidentially.

All investment services and

related publications arefree of charge.

www.gtai.com

About Us










foreign markets.






www.gtai.com

Germany Trade & Invest

Friedrichstrae 6010117 BerlinGermany

T. +49 (0)30 200 099-0F. +49 (0)30 200 [email protected]

About Us










foreign markets.






www.gtai.com

Photo:istockphoto.com

ClaudiaDewald

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