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German Legislation Related to Foreign Investments

Updated on Wednesday 05th April 2017

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German-legislation-related-to-foreign-investmentsForeign investments in Germany

Germany is one of the world’s most attractive countries for foreign investors, currently occupying the 6th position in the UNCTAD (The United Nations Conference on Trade and Development) World Investment Report. Many multinational companies seek to have an established presence by opening subsidiaries or branch offices in Germany because of the pro-foreign investment legislation the Government offers. Among the factors attracting such high numbers of international investors are its developed industries, skilled labor force, its infrastructure and the economic stability.

Legislation for Foreign Direct Investment in Germany

 One of the most important aspects of doing business in Germany is that foreign investors have the same rights and benefits as any other local enterpriser when companies here. Moreover, they are offered more advantages through the Foreign Trade and Payments Act, also known as the Foreign Economic Law (Außenwirtschaftsgesetz) which is the legislation enabling foreign entrepreneurs to open companies in Germany.  Under the Foreign Economic Law, international investors can own a majority holding in a German company and are rarely imposed any restrictions.

For detailed information about the Foreign Economic Law you can refer to our specialists in opening a business in Germany.

Governmental aid for foreign investors who are considering opening a business in Germany

The German legislation related to foreign investments does not stop at the Foreign Trade and Payments Act. The Government is deeply involved in creating a welcoming environment for foreign enterprisers in Germany. Among the governmental aid programs are:

  • -          investment incentives granted at both federal and state level,
  • -          labor-related subsidies,
  • -          research and development subsidies,
  • -          low-interest public loans,
  • -          public guarantees for contracted loans.

Investment incentives usually take the form of grants which vary depending on the size of the company and the region where the company is being set up. These grants start from 30% for large companies, 40% for medium-sized enterprises (SMEs) and can reach up to 50% for small companies in Germany, thus covering all types of businesses.

If you are interested in setting up a company in Germany in a certain industry you can contact our German consultants in company registration for details about specific incentive programs.

 

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