Whether you want to create a subsidiary or to relocate your company, we know that Germany is a smart choice of places to establish companies. A traditional and geographical link unites our two countries, Germany has a strong economy and an interesting tax framework. Let’s look more closely at the most important reasons that you should consider establishing yourself in Germany.
Germany came out of the 2009 crisis with a stronger economy than before. It’s unemployment rate is low, and its economy is growing, which both ensure the country’s prosperity and the German market’s stability. Germany is notably strong in exportation, and its best sectors are automobiles, machine construction, the electrotechnical sector, and chemistry.
The German Model
We often hear about the German model, a rather vague term that often refers to the Mittelstand: mid-sized companies that are specialized in niche markets and are very competitive. They perform well mainly because they strongly invest in research and development, which allows them to innovate and to remain independent. These mid-sized companies often work with big companies in order to have more impact on the international market.
Tax and Legal Framework
Germany’s tax system is one of the most advantageous among big industrialized countries, especially because it is stable. For example, the employer’s contributions are 20% in Germany, half of what they are in France, and the managers or the associates of what would be the equivalent of an LLC (GmbH in German) can also be completely exonerated. However, the tax system in German is a bit more complex. Don’t forget to hire competent bilingual lawyers in order to get better advice.
The importance of competition and the principal of market freedom is more marked than in France. There are way less nationalized companies than in France, giving way to more market freedom. Germany also welcomes foreign companies and agents, all in the name of market freedom, and the value of competition and transparency.
“Made in Germany”
This designation often pledges quality outside of Germany, especially in strong sectors such as the automobile one. That’s an advantage of having a production site in Germany in order to adopt that designation and to be more competitive in the international market.
Another asset of the German market for French companies is of course its proximity. The German market is stable, and it’s much closer than South America, for example. Not only from a geographic point of view, but we are also culturally closer, and the ways our companies work is recognizable. France is actually Germany’s first commercial partner, since 1961!
If you have any questions or require further information, please do not hesitate to contact Smylingua today by e-mail or by phone at +33 176 43 32 76.