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Doing Business In Germany: A Guide

Germany has long had a reputation as an economic powerhouse and a great place to do business, and in recent years this has extended from its world-leading automotive industry to smaller ventures. Indeed, a recent survey saw it named the best nation for startups in Europe.

If you’re thinking about extending your corporate network into Germany, read on to learn more about just what makes the country so conducive to entrepreneurship, and how your business can flourish in this all-important European hub. If you’re interested in improving your English-to-German communications, please read about our German translations.

Why Germany is a sensible investment

The size of its market

Germany is the most populous country in the European Union, with roughly 83 million inhabitants, and has access to the 500 million individuals in the bloc’s single market, which allows the nation’s entrepreneurs to target a massive number of consumers. The country is also home to a diverse mix of booming industries, including the automobile production, chemical and electronics sectors, meaning there are a wealth of opportunities for innovation.

As Europe’s biggest economy by far, and the fourth-largest worldwide, Germany is extremely financially stable, making it even more attractive to overseas investors. Furthermore, its EU membership is a huge advantage to UK-based businesspeople, especially in the face of Brexit. Consequently, hiring German-speaking employees will be particularly favourable, as the language is spoken by around 100 million people, and among the top ten used online worldwide.

A nurturing business environment

Germany offers its businesses a high level of economic freedom, and a wealth of options when it comes to acquiring financing. These include government funding opportunities, from the GRW cash grant to the Entrepreneur Loan, while the nation’s startups received around £9 billion in venture capital funding in 2018 alone. Another reason so many businesses flock to Germany is how affordable it is to set up shop there, with the country’s 15% corporation tax rate one of Europe’s lowest.

Its huge pool of talent

German companies also have a wealth of talented individuals to pick candidates from. More than half of 20 to 24-year-olds have some form of higher education qualification, while 29% of those aged between 30 and 34 have university degrees, double the number from a generation ago. Employment levels are at their highest since 1991, while the country’s productivity levels are also formidable — Germany’s GDP in 2018 stood at $108.8 per hour, more than nations like the US ($104.7) and the UK ($102.7).

What are the best ways to forge connections with German businesses?

As with doing business anywhere, the most effective means of making connections with other companies in Germany is to network, and you’ll find plenty of ways to build corporate relationships here.

Attend networking events

Networking events are the best way to meet fellow entrepreneurs in person, giving you the chance to build a face-to-face rapport from the off. There is an abundance of B2B networking events across Germany, geared towards businesses from a huge breadth of industries, from technology and cybersecurity, to fashion and winemaking.

Join a trade association

Becoming a member of a trade association gives you immediate access to others in your niche who know the industry and can give you invaluable help and guidance. There is almost certainly a German trade association dedicated to your sector, so using these organisations to make connections and share advice is a must for any business starting to make inroads in the country.

Build a social media presence

Social media is a vital way of building relationships with fellow businesses, at both a global and local level. By establishing a strong social media presence, publishing good content and—most importantly—using your platforms to interact with other entrepreneurs, it shouldn’t be too hard to make connections this way. Platforms you should use include LinkedIn and Facebook, though German professional social network site Xing is also popular in the country and shouldn’t be ignored.

The importance of great communication

Business etiquette in Germany isn’t too different from other countries, though Germans are generally more formal, and greatly value punctuality. Effective communication is imperative in the business world, so follow the tips below to ensure you make the right impression.

Greetings

A firm but brief handshake is the most common way to greet somebody in German business meetings, typically accompanied by saying “Guten Tag” (Good day) or “Hallo” (Hello). It is also customary to shake hands at the end of a meeting as well — be sure to maintain eye contact and keep your other hand out of your pocket when doing so. Once you’ve learnt somebody’s name, you should address a man as Herr (Mr.) and a woman as Frau (Mrs.) followed by their surname.

Communication basics

After introducing yourself, it’s critical that you use basic German phrases such as ‘Bitte’ (please) and ‘Danke schön’ (thank you) when speaking to others, even if you’re conversing in English or through an interpreter. This demonstrates that you take a genuine interest in their language, culture, and country, something that your prospective business partner will appreciate.

If you do address somebody as ‘you’ in German, be sure to use the formal version (Sie) rather than ‘Du’ unless expressly invited to do so. Avoid using overly animated communication styles and excessive hand gestures as Germans may see this as insincere, and learn some common German gestures before you attend.

Topics to raise

Most Germans tend to keep their personal and professional lives separate, and refrain from small talk before or after a meeting, so avoid initiating this yourself. Should you become engaged in an informal conversation, stick to subjects like personal interests, sports, and German culture. Avoid discussing potentially controversial topics like politics or religion.

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