Germany

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DOING BUSINESS IN GERMANY

Those considering doing business in Germany tend to do so with an optimistic view. Being ranked 20th by the World Bank for ease of doing business in the country and 25th in the Index of Economic Freedom is a testament to Germany’s forward-thinking approach to business, openness to global commerce, protection of intellectual property rights and sound business regulatory environment. Having become one of the largest exporters in the world and, thanks to the size of its population, the largest consumer market in Europe, analysts predict the nation’s GDP will expand by 1.9% in 2019.

Corporate income tax in Germany is payable at the rate of 15% of taxable income with an additional 5.5% solidarity surcharge imposed on the corporate income tax assessed. The challenge arises when businesses come to pay taxes with the German fiscal system being notoriously tough to navigate. There are 14 different types of taxes firms doing business in Germany may be liable to pay, all taking significant amounts of valuable time to process. Other commercial activities, such as registering business properties are often fraught with bureaucracy.

As with all countries, the key to being effective when doing business in Germany is understanding the people and culture. Academic and technical education are coveted accomplishments in Germany. This value carries through to senior management, who only delegate to technically competent, diligent employees as is evident in meetings, which are often well-prepared with a designated specialist from each relevant area saying their piece on the matter being discussed.

A tendency to take a methodical approach to business issues mean German professionals are often clear what their goals and responsibilities are but slow to adapt to new situations. Contrary to the stereotype, Germans have a sense of humour, but believe there are situations, such as serious business meetings, to which humour is less suited.
The World Business Culture website comprises practical advice and insight to prepare those doing business in Germany with the knowledge of the country’s people, culture and economy, enabling them to successfully operate a prosperous business in Germany.

OVERVIEW

Germany continues to retain its position as the driving force of the European economy. It holds a pre-eminent position within the massive economic and political block that is the European Union and it shows no signs of relinquishing its position of leadership and power anytime soon.

Possibly aided by a weakened Euro, Germany is the archetypal successful modern economy with a massively effective export engine at its core. German engineering and ingenuity finds its way to all corners of the world with those exports competing from a quality angle rather than on a price basis. Whatever Germany is doing, however it is doing it – it is extremely successful and, therefore, well worth studying.

On the flip side, Germany is also a highly attractive market for your products and services and if you are not currently doing business in Germany you should certainly consider doing so. Germany has a large sophisticated consumer base with high levels of disposable income and a large manufacturing base looking for components, inspiration and expertise.

One of the keys to success when doing business in Germany is an ability to understand German business culture and the profound impact that the local business culture has when interacting with German colleagues or clients. Lack of preparation could cost you dearly; inattention to detail could result in lost opportunities. Do your homework before engaging in Germany – it’s a must.
This country profile provides an overview of some of the key aspects of German business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips