Reasons why you should invest in Germany
Germany is, and has long been, a pioneering country with great international influence and economic power. The country has a large social market economy with a highly skilled labour force, a large capital stock, and high levels of innovation. In addition, Germany is known to have very low levels of corruption, ensuring efficiency and high quality of life.
As a global leader, Germany is not only the world’s third largest exporter of goods but also the largest national economy in Europe. Germany’s ever-growing power and growth in the economy have impressively resulted in having the world’s fourth-largest economy by nominal GDP.
Strong economy, German social market economy, Center of Europe
- One of the main benefits of Germany for foreign investors is the economic stability, the size of the German market, and the embedment of the country in the world economy, enabling businesses to benefit from the continuous knowledge, manpower, and product exchange. Additionally, Germany is a global player with strong and steadily increasing exports. Key contributors include the chemical, automotive, and machine and plant engineering sectors.
- Germany’s investment-friendly environment has gained recognition in international reports: Among others, according to the World Investment Report 2022, Germany ranks top 10 globally in both foreign direct investment (FDI) inflows and outflows.
- Germany has the largest pool of highly skilled and trained workforces in Europe due to the excellent education system. In addition to universities, there is also a dual-vocation education system offering state-approved training. Trainees build their theoretical foundation in vocational schools and internalize their knowledge through working in companies. This provides a large pool of highly skilled labour for the German industry. In terms of nominal unit labour costs, Germany has registered a moderate growth of around two per cent and has gained in productivity over the past decade.
- Apart from stable labour costs, highly automated manufacturing and leadership in industrial automation make Germany an attractive production location. As one of the strongest European countries in the manufacturing sector, foreign companies benefit from the excellent business environment and extensive production capabilities, making it profitable to set up production sites in Germany.
German social market economy
- Germany follows a social market economy. Hence, the government develops a legal framework for the economy that secures personal freedom, as well as an effective competition regime that protects economic freedom. For example, a feature of the market economy is the ability to set individual prices and discuss working conditions without governmental interference. At the same time, the social market economy also implies a strong social safety network monitored by the government to protect the respective parties.
- In addition to this legal framework, Germany also has one of the highest Corruption Perception Index scores in Europe, indicating very little corruption. Intellectual Property is also highly protected by law. Hence, Germany provides a safe environment for foreign business.
Center of Europe
Economic Powerhouse in the EU
- Germany is the largest and most powerful market in Europe, accounting for most of the European Union’s economic growth. While the services sector and the manufacturing industries are the main drivers of growth in Germany, the economy is highly developed and diversified, providing opportunities across a wide range of industries. Germany is also well-connected and situated in the heart of Europe, surrounded by other members of the European Union, making it easy to reach every capital city within a short time. Hence, Germany is one of the most attractive business locations in the world.
- Germany has a strong infrastructure with an effective road, rail, and communication network, making it easy to reach other European capital cities by sea, land, or air. The strong relationship Germany enjoys with the other member countries of the European Union also presents itself as an additional advantage for companies seeking to do business in the region. For example, a lot of countries have implemented the Euro as their currency