Foreign Direct Investment in Germany
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).
Country Comparison For the Protection of Investors
|Index of Transaction Transparency*||5.0||6.0||7.0|
|Index of Manager’s Responsibility**||5.0||5.2||9.0|
|Index of Shareholders’ Power***||5.0||6.8||9.0|
|Index of Investor Protection****||5.0||6.0||8.3|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|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|
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.
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.
- Bilateral Investment Conventions Signed By Germany
- Germany has signed many bilateral agreements.
To see the list of countries, click here.
To see the conventions, click here.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
- Foreign investors may have a majority holding in the capital of a local company.
- Obligation to Declare
- The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up.
- Competent Organization For the Declaration
Federal Office of Economics and Export Control
- Requests For Specific Authorizations
- Investments have to be governed by the policies and the procedures which are specific to the sector. For more information refer to the BAFA.
- Investment Aid Agency
Invest in Germany
- Tenders, Projects and Public Procurement
Bundesausschreibungsblatt, Tenders official body (in German)
Tenders Info, Tenders in Germany
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
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