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In this page: FDI in Figures | Why You Should Choose to Invest in Germany | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

Germany is a very attractive country in terms of foreign direct investment, but FDI flux have declined after the beginning of the global recession in 2008 and the euro zone crisis which followed in 2012. They should recover in 2014. According to UNCTAD, the country is world's sixth largest investor. Prior to the crisis, it experienced rapid growth of FDI flows from Asia, especially from China and India.

Among the country's strengths are its very high and powerful industrial network, a highly skilled workforce with a good command of English and a location in the heart of Europe. Its main weakness is a high tax rate (for both individuals and businesses).


Country Comparison For the Protection of Investors

  Germany OECD United States
Index of Transaction Transparency* 5.0 6.0 7.0
Index of Manager’s Responsibility** 5.0 5.0 9.0
Index of Shareholders’ Power*** 7.0 9.0
Index of Investor Protection**** 5.0 6.1 8.3

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 59,31713,20326,721
FDI Stock (million USD) 737,076788,098851,512
Performance Index*, Ranking on 181 Economies 86--
Potential Index**, Ranking on 177 Economies 8--
Number of Greenfield Investments*** 856858784
FDI Inwards (in % of GFCF****)
FDI Stock (in % of GDP) 20.323.023.4

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Germany

Strong Points
Germany's strong points are:
- A strategic location at the center of Europe;
- The biggest population of the European Union;
- Infrastructures amongst the most developed in European Union;
- Advanced technology and expertise;
- A highly qualified work force;
- Competitive taxation.
Weak Points
Public finances are structurally highly in deficit. The eastern part of the country is struggling to catch up in many fields. The ageing population weighs heavily on growth. The unemployment rate poses a real challenge for the development of the country and its future influence.
Government Measures to Motivate or Restrict FDI
The Germany government is implementing measures aimed at encouraging investments in the country:

- Financing by the European Union and/or by German federal entities;
- Aid aimed especially at the initial investment phase but also at the operational phase of the project;
- Eventually, Germany provides favorables incentives for investments into research and development.

In 2013, the Capital Investment Code replaced the German Foreign Investment Act. The Foreign Trade and Payments Act and Ordinance were also amended.
Bilateral Investment Conventions Signed By Germany
Germany has signed many bilateral agreements. To see the list of countries, consult UNCTAD website.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Yes. The German government and industry actively encourage foreign investment in Germany, and German laws provides foreign investors national treatment.
Acquisition of Holdings
Foreign investors may have a majority holding in the capital of a local company. The Foreign Economic Law contains restrictions on private direct investment for reasons of foreign policy, foreign exchange, national security, public order. Restrictions also concern armaments and cryptographic equipment.
Obligation to Declare
The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up.
Competent Organization For the Declaration
Federal Office of Economics and Export Control
Requests For Specific Authorizations
Investments have to be governed by the policies and the procedures which are specific to the sector.  For more information refer to the BAFA.
The investors that are not from UE or from the European Free Trade Association must specify if they are involved in the development of war weapons or armaments, or the production of cryptographic equipment.

Learn more about Foreign Investment in Germany on, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Invest in Germany
Tenders, Projects and Public Procurement
Bundesausschreibungsblatt, Tenders official body (in German)
Tenders Info, Tenders in Germany
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

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Learn more about Investing in Germany on, the Directory for International Trade Service Providers.

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Last Updates: December 2014