Your company is already operating in Germany and you would now like to export worldwide?

Skyline cityscape of Frankfurt, Germany during sunny day. Frankfurt Main in a financial capital of Europe Skyline cityscape of Frankfurt, Germany during sunny day. Frankfurt Main in a financial capital of Europe. | © Nikolay N. Antonov - stock.adobe.com

Investment Environment

The German Market - Europe’s Economic Hub

Germany is Europe's best performing economy. Small and medium-sized enterprises drive the market and dynamic trade relationships within Europe and beyond offer plenty of business opportunities.

Germany's economic policies enhance a broad and competitive industrial environment with a strong focus on innovative future technologies. Many small and medium sized enterprises utilize this potential, making them leaders in their respective markets. Across industries large and small, German products are worldwide export hits.According to recent studies, Germany ranks as the top investment location in Europe. Along with its relative economic stability, Germany is the largest domestic market within Europe, creating a large and stable customer base for investors. Germany's integration into the world economy also allows companies to gain and share knowledge, products and employees within a global network.

Biggest Market at the Heart of Europe

Germany is the largest market in Europe. It constitutes 25 percent of Europe's GDP (EU-27) and is home to 19 percent of the total European Union (EU) population.

The German economy is both highly industrialized and diversified – with equal focus placed on services and production.

Share of Total GDP and Population in the European Union 2020
GDP
(in EUR tr)
Share of Total GDP (EU 27)

Population

(in m)

Share of Total Population (EU 27)
Germany3.325%8319%

France

2.3

17%

67

15%

Italy

1.7

12%

60

13%

Spain

1.1

8%

47

11%

Netherlands

0.8

6%

17

4%

Poland

0.5

4%

38

8%

Czech Republic

0.2

2%

11

2%

EU 27

13.3

100%

447

100%

USA

17.1

328

China

12.0

1,398

Japan

4.1

126

UK

2.2

67

Source: Eurostat, World Bank 2021

Key Driver: The Manufacturing Industry

Ten percent of Europe's manufacturing companies are German. They generate more 30 percent of the EU's gross value added in the manufacturing sector alone. In fact, they represent more than one fifth of all of Germany's value added – one of the highest shares in Europe. Increasingly more foreign companies are placing their faith in Germany as an essential location for production sites and are benefiting from the country's excellent business framework and superior productivity rates.

Economic Backbone: Small and Medium-Sized Enterprises

Exports are driven by Germany’s backbone of highly innovative small and medium-sized enterprises (SMEs). These constitute more than 99.3 percent of all companies that employ 55 percent of all employees in Germany. Many of these SMEs are world market leaders in their respective niche segments. Together with internationally leading companies - such as Bayer, BASF, Daimler, Volkswagen, and Siemens to name but a few - they make up Germany’s manufacturing industrial base.

Company Structure in Germany (2019)


Total

SMEs

SME-Share

Number of Companies *

3.56  m

3.54 m

99.3%

Turnover of Companies *

EUR 7,153  bn

EUR 2,353  bn

32.9%

Employed *

35.21 m

19.24  m

54.7 %

Net Value-Added **

60.6 %

Source: Ifm Bonn, 2021

All figures relate to the private sector (commercial business economy and the liberal professions without public sector, NACE Rev. 2 Codes A-N,P-S). Exceptions are marked.
* Figures provided by the business register (NACE Rev. 2 Codes B-N,P-S). Differentiation of SMEs by number of employees and turnover
** Estimates by the IfM Bonn. Basic data: turnover tax statistics (VAT). Differentiation of SMEs by turnover 

Germany’s Infrastructure Excellence

Germany has become Europe’s prime logistics hub, thanks in part to its central geographical location, but most of all due to factors of quality and reliability.

World's top-ranked infrastructure

A number of recent studies , including UNCTAD’s Investor Surveys and the IMD’s World Competitiveness Yearbook, underline the quality of Germany’s infrastructure.

In the Competitiveness Yearbook, Germany’s reliable infrastructure is singled out as one of the TOP 5 key attractiveness indicators of the economy.

The 2019 Global Competitiveness Report of the WEF includes high marks for the quality of German roads and airports, its rail and port infrastructure, as well as the country’s outstanding communications and energy infrastructure.

Logistics excellence

Businesses benefit from Germany’s excellent logistics infrastructure: Germany’s  logistics network includes not only the port of Hamburg – Europe’s third largest container port, but also Bremerhaven – one of the world’s largest ports for vehicle traffic, and Duisburg – home of the continent’s largest inland port. Measuring the logistics performance of 160 countries, the World Bank’s Logistics Performance Index (LPI) 2018 ranks Germany’s logistics performance and infrastructure as best in the world.

Logistics Performance and Quality of Infrastructure (2018)

Country

LPI Rank

Infrastructure Rank

Germany

1

1

Japan

5

2

Netherlands

6

4

Singapore

7

6

United Kingdom

9

8

France

16

12

Spain

17

19

Czech Republic

22

26

China

26

20

Poland

28

35

Source: World Bank 2018

Dense network of roads, ports, and railways

Together with over 250 additional inland ports, Germany’s port infrastructure facilitates the efficient delivery of goods in Europe’s largest market. The Rhine and Elbe rivers serve as major arteries for barge traffic to the deepwater ports in various river bights and along the north and northwest coastlines.

Germany has a dense network of airports, 12 of which have been classified as International Airports.

Frankfurt is Europe’s largest airport in terms of cargo and ranks sixth in passenger volume.

The country’s highway system has one of the greatest kilometer densities in Europe and the 38,400 kms of railway tracks are nearly enough to circle the globe; its high-speed railway network, with speeds of up to 300 km/h, is the fourth largest in the world.

Europe's global logistics hub

The German logistics infrastructure is among the best in the world: Once again, Germany has been ranked first in the World Bank’s Logistics Performance Index 2018. With its state-of-the-art transportation networks by air, rail, waterway, or autobahn, Germany provides quick access to domestic and international markets. It’s hardly surprising that Germany is a global logistics hub.

With a turnover of EUR 265 billion in 2020, the German logistics market has no rival in Europe. According to research by the Fraunhofer IIS - Center for Applied Research on Supply Chain Services, Germany has a dominant share of the European logistics market, which makes it the most significant player in driving Europe’s economic growth.

There are more goods now passing through Germany than through any other European country.

Not only is Germany’s logistics infrastructure world-class, its companies are also global logistics leaders. In fact, Deutsche Post (DHL) from Germany is one of the world’s largest logistics service providers. In addition, Deutsche Bahn operates Europe's largest railway network and Lufthansa Cargo is one of the world's leading global air freight companies.

In the middle of Europe

In the north, Germany’s seaports are an important conduit for trade with the UK, Scandinavia, and the Baltic states. Moreover, road and rail links through the Jutland peninsula provide easy access to Denmark and the rest of Scandinavia. In the west, an extensive network of roads, rail links and inland waterways feeds into France and the Benelux countries.

To the south, Germany has strong commercial ties with Switzerland and Austria and direct road, rail and water links with the Balkan states. Turning eastwards, Germany’s borders with Poland and the Czech Republic also bring Slovenia, the Slovak Republic and Hungary within easy reach.

Germany's First Class Infrastructure


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