Germany Offers A Host Of Business Opportunities

The industrial heartland of Germany has under massive restructuring to make it more conducive and attractive for investors who desire to do business with the country. Germanyh is decentralized with many cities having their own identity. While Berlin is the capital and seat of the government, other cities like Frankfurt, Munich, Cologne, Hamburg, and Stuttgart are all important business centers.

Being a part of the European Union, Germany is subject to European Law, which aims at bringing every country in the Union within the European Common Market. Businesses require to follow the rules set forth in Article 81 of the EC Treaty. Foreign companies are regulated by European Directives, which is why many federal statutes govern laws related to doing business in Germany. The government also offers loan programs through the commercial banks to companies desiring to invest in German businesses. These loans attract a low interest rate. Subsidies are also offered, based on the number of employment opportunities a business can create.

Foreign companies are required to choose a legal business entity to conduct business in the Germany in the form of Gesellschaft mit beschränkter Haftung or GmbH. This is a limited liability company where the liability of the shareholders is limited. GmbH is the most common form of business entity that is subject to independent taxation. The minimum share capital investment is 25,000 Euro. The company is allowed to operate abroad. One of the main advantages of a GmbH is that it is suitable for small, medium or large enterprises.

The other type of legal entity is an AG ((Aktiengesellschaft) or Stock Corporation. This type of commercial trading company requires the setting up of a management board and a supervisory board. The minimum share capital of an AG is 50,000 Euro which can be paid in cash or kind or both. The shares are transferable with no restriction on foreign ownership. The liability of the shareholders is limited to the value of the contribution of each shareholder. The shares of an AG can be traded publicly, which enables a company to raise capital from the public.

All commercial enterprises in Germany are subject to corporation tax, VAT, trade tax, and withholding tax. Rates may vary for foreign companies. Germany has a Double Taxation Treaty with the US where the branch office of a US company may only be taxed on profits from commercial activity in Germany. Any separate legal entity would attract corporation tax.

If you are on a business trip to Germany it is important to be punctual. Germans are known for their punctuality with a formal environment the norm during business meetings. A suit and tie is apt for a meeting. Always greet an individual according to his or her title. It is also prudent not to begin on first name terms. When it comes to business views and expressing them, the Germans are direct and will also expect you to reciprocate the same way. Even though you may not know a word in German it would be respectful and polite to learn basic greetings such as 'Guten Tag' or Good Day, 'Bitte' or Please, and 'Dankeshon" or thank you.

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