Germany: Country and Foreign Investment

Germany History, Population, Language and Culture

After the collapse of the Second German Empire following the defeat of German forces in the First World War, the Weimar Republic was founded. Its first elected president was Field Marshal Paul von Hindenburg. Germany’s economic depression resulted in discontent within the masses and Adolf Hitler’s nationalistic views and calls for a Greater Germany fanned the flames. Hilter was made chancellor in 1933 by Hindenburg. After Hinesburg’s death in 1934 Hitler began rearming the military. His invasion of Poland was the precursor to the Second World War. Germany was split by the Allies and Soviets after their victory in 1945. The split resulted in the occupation of West Germany by Allied Forces and East Germany effectively being controlled by the Soviet Union.

The re-unification of Germany was achieved through the collapse of the East German communist government and negotiations between the West German and Soviet Governments.

The country was officially re-unified on 3 October 1990.

Today, Germany consists of over 82 million inhabitants, more than 7 million are foreign nationals. Its two main religions are protestant and catholic. Religious freedom is enshrined in Germany’s basic law (Grundgesetz). The official language is German and many dialects are spoken throughout the country that can be difficult to understand for those who speak standard German. Approximately 80% of the population speak at least one foreign language, the most popular being English.

German people generally take great pride in their neighbourhood and the streets are generally clean and free from litter. As a workforce, Germans have a reputation for being diligent, accurate, reliable and loyal.

The standard of living is generally high, with rental and retail purchase being comparatively cheap.

An OECD study for 2008 revealed that low earners pay some of the highest taxes and social security contributions in Europe – up to 52% of gross income.

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Germany Government

The German government is a Federal democracy. The Bundestag (lower house) consists of 622 seats made up of elected members of all parties from the 16 Federal states. At the same time electors vote for a government party with their second vote.

Elections take place every four years. The latest election was in September 2009 where Angela Merkel was re-elected as chancellor for a second term.

The president is elected every five years and fulfils the role of head of state for ceremonial and other duties.

The Bundesrat is the federal council and sometimes referred to as the upper house. It consists of delegates from the 16 Federal states. The delegates are appointed by their respective governments and can therefore be removed at any time. Each Federal state is assigned a number of votes in the Bundesrat based on the number of inhabitants in the state. The Bundesrat votes on legislation relating to individual Federal states and also has the power to veto legislation put before it by the Federal government before it is passed to the Bundestag for debate.

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Germany Economy and Currency

Germany is the largest economy in Europe and world-leader in exports. The credit crunch affected the country badly and measures such as banking support and a car scrappage scheme were put in place. The second half of 2009 has seen an upturn and the outlook is generally positive.

The country’s economy consists of a strong service sector with approximately 70% of the workforce employed in this field. 22% of labour is used in industry and the rest in agriculture.

Unemployment is currently 7.7% but expected to increase in 2010 to around 9%.

The currency is the Euro.

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Germany Entry and Residence

Nationals of most EU states may live and work in Germany without restriction. Citizens from some of the new EU states such as Poland, Bulgaria, Lithuania, Latvia, Slovakia, Czech Republic, Hungary and Estonia must apply for a work permit prior to their arrival in Germany. Australian, Canadian, Israeli, Japanese, South Korean, New Zealand and US citizen may apply for a work permit after their arrival in Germany but must not commence employment until after the permit has been issued.

For non-EU nationals a visitors’ visa is generally required for entry into Germany.

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Germany Business Environment

Germany has excellent road, rail and water networks. It has many large airports, Frankfurt being an international hub. The port of Hamburg is one of the largest container ports in Europe. Germany prides itself in being the largest broadband market in Europe and most German households have internet access.

Germany boasts a well-qualified and conscientious workforce, and provides a balanced combination of schooling and on-the-job vocational training.

Foreign investment is encouraged and there are around 45,000 foreign-owned businesses established in Germany. 39 of the Fortune Global 500 are based in the country.

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Germany Investment Incentives

There are a number of investment incentives available in Germany. The country has a total of EUR26.3bn available to spend on new investments until 2013.

Investment in the former East German states and Berlin is particularly encouraged.

Furthermore, the individual Federal states have their own incentive programmes. The incentives range from tax subsidies in the property and building industry, to research grants to the value of 50% of the cost of the project.

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