Germany – A major Destination for Foreign Investment

Germany is officially known as the Federal Republic of Germany. Germany is located in the Central Europe and is one of the most important countries in the European Union (EU). Germany is bordered by North Sea and Denmark to its north and to the south it shares its border with Austria and Switzerland, Germany is surrounded by Poland and Czech Republic to its east and to its West Germany shares its border with France, Belgium and Netherlands. With more than 81.8 million inhabitants (approximately) residing in the country, Germany is the most populated country in the European Union. Germany is one of the few countries that enjoy the distinction of being of the third largest countries in the world with the highest number of immigrants staying in the country.

Germany has a very liberal social market economy. It is ranked first as the largest economy in European continent. Since the onset of Industrialization, Germany has been one of the forerunners in the technological advancement and has been a leading global economy. Germany is a key member of the G8 and G20. It is second largest exporter and the third largest importing country in the EU. The trade sector contributes to a staggering $189.7 (approx) to the German exchequer. Germany’s aggressive international policy makes it a fertile ground for foreign investment.

Benefits of investing in Germany foreign investors:


1.    Germany has a huge resource of developed infrastructure that is easily accessible for foreign investors.
2.    Germany has a strategically planned and well laid out transportation systems in place, the well connected rail and roadways connect every nook and corner of the country and it is an important gateway to all of European Union.
3.    Germany is one of the most technologically advanced countries not only in European Union but also in the world; as a result foreign investors investing in diverse sectors of Germany can get the benefit of the most developed scientifically advanced technological assistance.
4.    Germany has a huge labor force which is highly educated and technically qualified. Majority of the work force speak English, the global languages. So there is no communication barrier between the investors and the local work force.
5.    Germany is a huge country and it offers a huge market base for foreign investors.
6.    In a bid to attract foreign investment, the German Government has made it a mandatory rule as to not to discriminate between the local investors and foreign investors. Foreign investors can all avail all the benefits granted to local investors.
7.    The country’s strategic geographic location of Germany, it is situated in the center of European continent provides foreign investors to easy access to the rest of European Union.
8.    Another significant advantage of investing in Germany is that the taxation policy of Germany is liberal and highly competitive. This gives the country an edge over other countries in the EU for foreign investment.
9.    The corruption levels in the country is extremely low, this greatly augments the interest of foreign investors.

Foreign Direct Investment (FDI) policy:


1.    The German Government is keen to attract foreign investment in the country. The Federal Government of Germany grants attractive tax subsidy to all foreign investors investing in Germany to acquire new movable and buildings for a period of 1 year. The tax subsidy at the rate of 25% to 27.5% is applicable to all small and medium sized companies (SME’s) that employ about 250 employees.
2.     The Germany government grants special financial grants for foreign investors for conducting Research and Development. The financial aids are provided in the form of low interest rate loans. The interest rates are particularly low for SME’s.  Foreign investment investing in certain sectors in Germany can avail grants up to 50% of the eligible costs.

Special incentives provided by German government to foreign investors


The Government of Germany has laid out a statutory rule that all foreign investors are granted free access to investment in all sectors and are eligible to enjoy 100% ownership of the business even in recognized sectors that are under public domain. Foreign investors are allowed to invest in national bodies such as mail, telecommunication and other such sectors.

Key Investment sectors for foreign investors:

Germany presents innumerable opportunity for foreign investors to invest in its varied sectors. Although most of the sectors promise valuable returns on investments, there are few classified sectors that are sure to provide high profits. Some of the most valuable sectors are mentioned below:

Consumer Goods: Germany is the most populated country in the European Union. Germany represents a huge market base for consumer goods. Germany is also renowned for producing high-tech machines. The machinery manufacturing sectors also provides huge investment opportunities for foreign investment. Recently there has been a significant upsurge in the amount foreign investment invested in the High tech products and production of environment friendly and renewable energy.

Tourism Sector: The ‘Oktober Fest’ is a world famous beer festival that is held annually in Germany, the festival attracts huge tourist world wide to enjoy the beer and have fun. Not only the Beer fest but in general, Germany is a very attractive tourist destinations. The huge influx of tourists around the year has opened up investment avenues for foreign investors. A large number of foreign investors are investing in providing accommodation facilities to the tourists. The investors are buying in building luxury villas, cottages, hotels and motels.

Education: Recently, Germany is growing as the top Educational hub in the European Union. Foreign investors can invest in the establishing colleges in the Germany. Many German Universities are collaborating with foreign Universities in order to uplift the face of Education system in Germany.

Thus, there are plenty of investment opportunities in Germany. It is truly a world-class destination to do invest and establish a business. The liberal government policies, well-establish transport system, low corruption levels all these factors greatly contribute to make Germany a preferred destination for foreign investment.
 

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