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Doing Business in Germany

by Prof. Dr. Dieter Endres, Service Line Leader Tax & Andrew Miles Tax Editorial Board of PricewaterhouseCoopers AG, Germany

For decades, Germany has been a country with a highly developed, high-cost, economy. The opportunities - but also the risks - of a German investment are therefore numerous, real and calculable. On the positive side, Germany offers the foreign investor exciting national and international marketing and business perspectives. These are inextricably linked to the long-standing commitment to European integration and to the traditionally strong business and cultural ties to most other European countries. The cultured, highly trained and educated working population provides the medium for turning these perspectives to practical advantage.

The downside to this is that costs - and especially employment costs - when measured in terms of wage rates, social security and other charges levied on employers - are comparatively high. Investment success in Germany is thus dependent on a carefully planned, sophisticated operation. In this sense, Germany is very much an “up-market” country.

The German investment climate, both inward and outward, is both open and complex. Over the past few years, much has been done to encourage further investment, and more is planned. However, the complexity remains, so any encouragement measures benefit mostly those with a carefully considered investment structure. The article below has been adapted from our business guide “Doing Business and Investing in Germany” which gives those planning investments, in or from Germany, the necessary insight to determine their own specific areas of interest. The guide can be found at www.pwc.de. Any reader who would like a more detailed discussion of any of the subjects dealt with herein is cordially invited to contact a partner in any of our German offices.

Prof. Dr. Dieter Endres
Service line leader Tax