FDI in Germany

Overview by Globlatrade.net:

FDI in Figures

Germany is an attractive country for direct foreign investment. However, due to the global financial crisis, the FDI flows dried up and should remain less dynamic even in the coming years.
The country's strengths are: a fabric of the industrial sector which is dense and powerful, a skilled workforce which has a good command of the English language, as well as a geographic location in the center of Europe. Germany's main weakness is its high taxation rate (of both individuals and corporations).

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 76,543 24,435 35,606
FDI Stock (million USD) 695,498 666,037 701,643
Performance Index*, Ranking on 141 Economies 107 127 113
Potential Index**, Ranking on 141 Economies 5 3 -
Number of Greenfield Investments*** 457 724 470
FDI Inwards (in % of GFCF****) 12.3 3.5 1.4
FDI Stock (in % of GDP) 20.9 18.2 21.0

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.


FDI Inflows By Countries and Industry

Main Investing Countries 2009, in %
United States 29.0
United Kingdom 9.0
France 6.0
Main Invested Sectors 2009, in %
ICT and software 19.0
Business and financial services 16.0
Industrial machinery and equipment 14.0
Chemical, plastic and paper products 8.0
Electronic products and semi-conductors 7.0
Transport, storage and logistics 6.0

Source: Invest in Germany

Form of Company Preferred By Foreign Investors
Form of Establishment Preferred By Foreign Investors
Distributors, commercial agents.
Main Foreign Companies
Ford , General Motors, Exxon Mobil, Sony, Toshiba, Total.
Sources of Statistics
German statistics office

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Why You Should Choose to Invest in Germany

Strong Points
Germany's strong points are:
- A strategic location at the center of Europe;
- The biggest population of the European Union;
- Advanced technology and expertise;
- A highly qualified work force;
- Competitive taxation.
Weak Points
Public finances are stucturally highly in deficit. The eastern part of the country is struggling to catch up in many fields. The ageing population weighs heavily on growth. The unemployment rate poses a real challenge for the development of the country and its future influence.
Government Measures to Motivate or Restrict FDI
The Germany government is implementing mesures aimed at encouraging investments in the country:

- Financing by the European Union and/or by German federal entities;
- Aid aimed especially at the initial investment phase but also at the operational phase of the project.

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