Among the reasons overseas investors find Germany attractive are the following: - A developed infrastructure including speedy and efficient access to all Europe. - A skilled labor force, with a good command of English and other languages. - A developed scientific and technological infrastructure.
As a general rule, 100% overseas ownership is recognized in most sectors and there is no discrimination against foreign companies compared to local companies. This is true as well in the privatization of national bodies in the telecommunications, mail and other sectors.
Overseas investors that are interested in penetrating the German market should remember that the German consumer has very high demands as to the quality of the brand purchased.
To this end, it is recommended, although there is no legal obligation to do so, that the prior approval of the German Standards Institute be obtained.
Benefits for Investors:
In general there is no difference between the benefits granted to overseas investors and those granted to local investors.
The benefits are granted in the form of investment grants, tax benefits, low interest loans or loans with a state guarantee for exporters. Occasionally, the benefit is granted as a combination of an investment grant and low interest loans, depending on the geographical area of the investment and the size of the investing company.
The Benefits are divided according to 2 types of investments:
An investment in new areas (East Germany, East Berlin).
The tax subsidy is granted at the rate of 25%-27.5% of the investment in new movable property and buildings in industry having more than 250 employees, or less than 250 employees in case of SME, small and medium sized companies.
The tax subsidy relates to investments in the period 1.1.2006 to 31.12.2010.
Research and Development Grants (R&D):
The benefits are granted in the form of grants and low interest loans to mainly to SME companies.
he grant may be up to 50% of the eligible costs.
Investment Grants
The current investment grants refer to investments in the years 2006 to 2009.
The investor has to provide at least 25% of the equity, the project has to be completed within 3 years and the new created jobs has to be kept for at least 5 years.
The grats are also provided for creating new jobs.
The maximum rates for the grants are 28%-50% for SME, small and medium sized companies, and 18%-35% for big companies, depending on the area.
