Why US Companies Like Doing Business in Germany?

With its old castles, over two thousand years worth of history, and breath-taking landscapes, Germany is on every traveller’s bucket list. But fun and travel aside, the country also boasts of a wealth of business opportunities. Americans, for instance, have a lot of reasons to be so upbeat about company formation in Germany. A recent survey done by the American Chamber of Commerce (AmCham) in Germany shows that more than 50% of US companies in the country plan on investing more and hiring more people.

In this post, we’ll give you insights on what makes the German market so attractive to American business owners. These insights might be useful if you’re looking for employment or entrepreneurship opportunities in the country.

A Quick Outlook of US Companies in Germany

Germany is currently at the fourth place of NASDAQ’s top five largest economies ranking. The country stands as one of the economic superpowers along with the US, China, Japan, and India. And its GDP is expected to grow by 1.1% in 2020.

Despite the challenging economic and health situation, US-owned companies in Germany continue to show positive performance. ExxonMobil (oil & gas), Ford (car manufacturing), and Amazon (tech) are considered the largest based on income from sales. Meanwhile, Manpower, Ford, and McDonalds are the largest employers. And as sales and employment performance in these existing US companies grow, other large corporations have also considered starting offices in the country.

What Makes the German Market Lucrative?

Based on NASDAQ’s 2019 figures, 55% of the world’s GDP comes from the economies of the US, China, Japan, Germany, and India. So it’s not a surprise why starting a business in Germany could be a bit challenging with the diplomatic agreements and paperwork. The country is known for its strict government protocols. However, company formation in Germany is worth all the effort, considering the following reasons that can surely contribute to your company’s positive financial outlook:

1. The German economy is the world’s fourth largest economy and the EU’s largest. Although the country has its economic highs and lows in the past decade, its GDP is poised to grow by 1.1% in 2020 and 1.4% in 2021.
2. The country boasts of a strong legal and government system. The federal parliament elects a president every 5 years. The country also abides by most international laws, including the International Court of Justice and Intellectual Property laws. Yes, many entrepreneurs might find the German legal and business systems strict, but these are effective in keeping business transactions in check.
3. The German market is not centralised. It offers diversity, which helps promote the regional differences in the country. This diversity also gives entrepreneurs a chance to specialise their services or products.
4. German economy shows a strong performance in domestic consumption. This is due to the high purchasing power of the residents.
5. The country is open to both export and import trade opportunities. Germany exports around $1.3 billion and imports more than $983 billion worth of electrical equipment, food, textiles, machinery, chemicals, computer and electronic products, pharmaceuticals, and automobiles. The country also has strong business partnerships with some of the world’s economic superpowers, such as China, Italy, France, the Netherlands, Poland, and Belgium.
6. The German workforce is highly skilled and educated. The country’s median population have had 17 years of schooling. 24% of its workforce population are in specialised industries. The car industry, for instance, employs approximately 825,000 people and the pharmaceutical and med tech industry employs approximately 237,000 people.
7. The country has an excellent technological, transportation, and logistical infrastructure. Technological infrastructure is one of the key drivers of economic growth. And as a first-world country, Germany boasts of its technically advanced telecommunication systems, especially its telephone and internet services. Its transportation and logistics sector is also world class with its 300 airports, 4600 waterways, 23 heliports, and thousands of miles of railways and paved roadways.

Germany’s skilled and educated workforce, stable political system, and top performing industries all contribute to the country’s thriving economy. These are the reasons US entrepreneurs and other business owners around the world look for opportunities that will make company formation in Germany a lot easier and faster. Over the years, the country survived its share of financial highs and lows, proving itself again and again as an evergreen platform for a business to thrive.