Doing Business in Germany and Europe Doing Business

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Doing Business in Germany and Europe Doing Business in Germany

Doing Business in Germany and Europe Doing Business in Germany

Agenda 1. General facts and figures 2. German Economy 3. German Business Environment 4.

Agenda 1. General facts and figures 2. German Economy 3. German Business Environment 4. German Business Culture Doing Business in Germany

General facts and figures Doing Business in Germany

General facts and figures Doing Business in Germany

Geography Ø Located in Central Europe Ø Size: 357, 021 sq km Ø Neighbouring

Geography Ø Located in Central Europe Ø Size: 357, 021 sq km Ø Neighbouring States: Austria, Belgium, the Czech Republic, Denmark, France, Luxembourg, the Netherlands, Poland Switzerland Ø Largest Cities (in million inhabitants): Berlin (3. 5), Hamburg (1. 8), Munich (1. 4), Cologne (1. 0), Frankfurt/Main (0. 69) Doing Business in Germany

Geography Germany consists of 16 states: Baden-Wuerttemberg Bayern (Bavaria) Berlin Brandenburg Bremen Hamburg Hessen

Geography Germany consists of 16 states: Baden-Wuerttemberg Bayern (Bavaria) Berlin Brandenburg Bremen Hamburg Hessen Mecklenburg-Vorpommern (Mecklenburg. Western Pomerania) Niedersachsen (Lower Saxony) Nordrhein-Westfalen (North Rhine-Westphalia) Rheinland-Pfalz (Rhineland-Palatinate) Saarland Sachsen (Saxony) Sachsen-Anhalt (Saxony-Anhalt) Schleswig-Holstein Thueringen (Thuringia) Source: The World Factbook 2006 Doing Business in Germany

People Ø Population: 81. 7 million Ø Population Growth Rate: -0. 06% (2011 est.

People Ø Population: 81. 7 million Ø Population Growth Rate: -0. 06% (2011 est. ) Ø Language: German - Age Structure: - 0 -14 years: 11. 0% - 15 -64 years: 72. 1% - 65 years and over: 16. 9% (2010) Ø Ethnic groups: - 91. 9% German - 2. 0 % Turkish - 6. 1% others (esp. Greek, Italian, Polish, Russian, Serbo-Croatian, Spanish) Ø Religion: - Protestant 29. 2%, - Roman Catholic 29. 9%, - Muslim 5. 0%, - unaffiliated or other 35. 9% Doing Business in Germany

Government Ø Federal Republic of Germany Ø Government type: federal republic Ø Consisting of

Government Ø Federal Republic of Germany Ø Government type: federal republic Ø Consisting of 16 federal states Ø Capital: Berlin Ø Legal System: civil law system Ø Member of international organizations: e. g. EU, UN, NATO, OECD, WTO Doing Business in Germany

Government Ø Executive Branch: Ø chief of state: President Joachim Gauck (elected for a

Government Ø Executive Branch: Ø chief of state: President Joachim Gauck (elected for a 5 -year term) Ø head of Government: Chancellor Dr. Angela Merkel (elected for a 4 -year term) Ø cabinet: Bundesminister Ø Legislative Branch: bicameral Parliament, consists of Ø Bundestag Ø Bundesrat Ø Judicial Branch: Bundesverfassungsgericht (judges are elected by the Bundestag and the Bundesrat) Ø Main political parties: CDU, CSU, SPD, FDP, Alliance ‘ 90/Greens, Linkspartei, Alternative für Deutschland Doing Business in Germany

German Economy Doing Business in Germany

German Economy Doing Business in Germany

Economic Facts Ø Largest economy in Europe, fourth largest in the world Ø GDP:

Economic Facts Ø Largest economy in Europe, fourth largest in the world Ø GDP: $2. 5 trillion (2014) Ø GDP real growth rate: 2. 0% (2014) Ø GDP per capita: $45. 000 (2014) Ø Currency: € (Euro) Ø Exchange rate: 1 Euro equals 1, 05 US-Dollar (March 2015) Ø Public dept: 75 % of GPD (2015) Doing Business in Germany

Development of GDP in Billion € Source: destatis. de Doing Business in Germany

Development of GDP in Billion € Source: destatis. de Doing Business in Germany

Development of GDP Source: www. destatis. de Doing Business in Germany

Development of GDP Source: www. destatis. de Doing Business in Germany

Economic Facts Ø „Soziale Marktwirtschaft“ (Ludwig Erhard) as a brand name Ø Labor force:

Economic Facts Ø „Soziale Marktwirtschaft“ (Ludwig Erhard) as a brand name Ø Labor force: 41. 6 million (2012) Ø Unemployment rate: 5, 4% (08/2012) extremly positive! Ø Inflation rate: 0. 9% (2014) (Deflation? ? ? ) Ø Industrial production growth rate: 3, 7% (2010), 3, 0% (2011) Ø Economy characterized by small and medium-sized-enterprises (>85%) Ø Very attractive foreign investors (>10, 000 foreign companies, with >2 million employees and sales of >750 billion/year) * Source: http: //www. destatis. de Doing Business in Germany

Unemployment rate in Germany Source: www. destatis. de Doing Business in Germany

Unemployment rate in Germany Source: www. destatis. de Doing Business in Germany

Development of Inflation Germany Economic Forecast October 2010 Source: destatis. de Doing Business in

Development of Inflation Germany Economic Forecast October 2010 Source: destatis. de Doing Business in Germany

Economic Sectors Data from CIA World Factbook 2008 Doing Business in Germany

Economic Sectors Data from CIA World Factbook 2008 Doing Business in Germany

Data from CIA World Factbook 2009 Made in Germany… Agriculture Products Industrial Products Potatoes

Data from CIA World Factbook 2009 Made in Germany… Agriculture Products Industrial Products Potatoes Iron Wheat Steel Barley Coal Sugar beets Cement Fruit Chemicals Cabbages Machinery Cattle Vehicles Pigs Machine tools Poultry Electronics Food and beverages Shipbuilding Textiles Doing Business in Germany

Germany – one of the leading holders of patents Source: http: //www. invest-in-germany. de/en/

Germany – one of the leading holders of patents Source: http: //www. invest-in-germany. de/en/ Doing Business in Germany

International Trade Current Account Balance: € 158 billion (2011) (Germany) Exports € 1. 060

International Trade Current Account Balance: € 158 billion (2011) (Germany) Exports € 1. 060 trillion Imports € 902 billion Export Commodities: Import Commodities: • • • Machinery Vehicles Chemicals Metals & Manufactures Foodstuffs Textiles Source: destatis. de • • • Machinery Vehicles Chemicals Foodstuffs Textiles Metals Doing Business in Germany

Foreign Trade Source: destatis. de Doing Business in Germany

Foreign Trade Source: destatis. de Doing Business in Germany

Foreign Trade Source: destatis. de Doing Business in Germany

Foreign Trade Source: destatis. de Doing Business in Germany

Importing and exporting countries Source: docstoc. com Doing Business in Germany

Importing and exporting countries Source: docstoc. com Doing Business in Germany

Trade of goods and services – a comparison Source: http: //www. invest-in-germany. de/en/ Doing

Trade of goods and services – a comparison Source: http: //www. invest-in-germany. de/en/ Doing Business in Germany

German Business Environment Doing Business in Germany

German Business Environment Doing Business in Germany

Business Environment EASE OF… 2009 RANK 2012 RANK Doing Business 25 19 Starting a

Business Environment EASE OF… 2009 RANK 2012 RANK Doing Business 25 19 Starting a Business 84 98 Registering Property 57 77 Getting Credit 15 24 Protecting Investors 93 97 Paying Taxes 71 89 Trading Across Borders 14 12 Enforcing Contracts 7 8 Closing a Business 35 36 Source: World Bank – Doing Business. org *The rankings are from the Doing Business 2010 report, covering the period June 2008 through May 2009 Doing Business in Germany

Infrastructure in Germany Ø Highly developed infrastructure in Germany Ø One of the densest

Infrastructure in Germany Ø Highly developed infrastructure in Germany Ø One of the densest railway network worldwide Ø >12, 800 km motorways Ø Many international airports (e. g. Frankfurt, Munich, Düsseldorf, Cologne/Bonn) Ø Many seaports (e. g. Hamburg, Bremen, Bremerhaven, Rostock) Doing Business in Germany

Infrastructure in Germany Quality of Infrastructure in 2011 1. Hongkong, SVR . . .

Infrastructure in Germany Quality of Infrastructure in 2011 1. Hongkong, SVR . . . 2. Deutschland 15. Japan 3. Singapur 16. USA 4. Frankreich . . . 5. Schweiz 36. Tschechische Republik. 6. Vereinigtes Königreich . . . 7. Niederlande 46. Ungarn 8. Vereinigte Arabische Emirate (VAE) . . . 9. Korea (Rep. ) 57. Slowakische Republik 10. Dänemark . . . 74. Polen 12. Spanien . . . Source: Invest in Germany (2012) Doing Business in Germany

The German Banking System Ø Universal banking system (one shop policy) Ø Universal banks

The German Banking System Ø Universal banking system (one shop policy) Ø Universal banks – Commercial banks – Saving banks (Sparkassen) – Cooperative banks (Genossenschaftsbanken) Ø Specialized banks – Mortgage banks – Credit institutions with specialist functions Doing Business in Germany

Legal system - different types of courts 1. Administrative Courts Companies and Citizens are

Legal system - different types of courts 1. Administrative Courts Companies and Citizens are protected from arbitrary or incorrect decisions by the authorities 2. Ordinary Courts Hearing criminal and civil disputes 3. Labour Courts Dealing with disputes arising from industrial relations 4. Fiscal Courts Responsible for disputes relating to charges and taxes, subject to federal legislation 5. Social Courts Dealing with disputes arising from social institutions (health care, pension and others) 6. European Court of Justice Standarized application of European law to be ensured Doing Business in Germany

Starting a Business in Germany Nature of Procedure (2006) Proc # Duration (days) Clear

Starting a Business in Germany Nature of Procedure (2006) Proc # Duration (days) Clear the name of company at the local Chamber of Industry and Commerce 1 1 0. 00 A notary notarizes the articles of association and foundation agreement 2 1 1, 183. 23 Open a bank account and deposit paid-in capital 3 1 0. 00 Notary public files the articles of association with the local Commercial Register, kept at local courts 4 14 Notify the local Office of Business and Standards of the establishment of the business 5 3 38. 38 Register with the professional association of the relevant trade 6 1 0. 00 Notify the local labor office of the establishment of the company 7 1 0. 00 Register employees for health and social insurance 8 1 0. 00 Mail out the documentation to the Tax Office 9 1 0. 00 Totals: 9 24 Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*). Source: World Bank – Doing Business. org Doing Business in Germany US$ Cost 553. 58 $1, 775. 19

Financial assistance and development grants Ø Kf. W bank group (Kreditanstalt für Wiederaufbau) –

Financial assistance and development grants Ø Kf. W bank group (Kreditanstalt für Wiederaufbau) – Kf. W assistance through ERP capital (funds from the European Recovery Program – Kf. W start-up funds (Startgeld) – Kf. W capital for start-ups – Kf. W capital for growth – Kf. W entrepreneur loans – Kf. W micro loans – ERP environmental and energy-saving programs – ERP regional promotion program Ø Regional business development agencies Ø Federal development database (Förderdatenbank) www. bmwi. de For further information see http: //www. invest-in-germany. de/en/ Doing Business in Germany

Legal forms for starting a business 1. 2. 3. Representative Office Sole Proprietorship Partnerships

Legal forms for starting a business 1. 2. 3. Representative Office Sole Proprietorship Partnerships - 4. Corporations - 5. Gb. R OHG KG Gmb. H AG Trusts Doing Business in Germany

Representative Office • Suitable for initiating business and maintaining contacts • Very low costs

Representative Office • Suitable for initiating business and maintaining contacts • Very low costs • One person required the minimum • No minimum capital required • No formal costs required • Managed by representatives • No business activity, therefore no liability • No partners, representatives only Doing Business in Germany

Sole Proprietorships • Suitable for start ups and small businesses • No minimum capital

Sole Proprietorships • Suitable for start ups and small businesses • No minimum capital required • Just one person needed to open the business • Low formal costs • ! managed by the founder / owner of the business only • Personal unrestricted liability of the owner • Only natural persons as partners possible Doing Business in Germany

Partnerships - Gb. R • Suitable for small and new companies • No minimum

Partnerships - Gb. R • Suitable for small and new companies • No minimum capital required • At least two partners required • Low formal costs, articles of association not required but advisable to clarify obligations and rights • Managed by all partners or just by one/several appointed ones, also possible by non-partners • Personal unrestricted liability of all partners • Partners can be natural person and/or legal entity Doing Business in Germany

Partnerships - OHG • Suitable for large and medium-sized companies • No minimum capital

Partnerships - OHG • Suitable for large and medium-sized companies • No minimum capital required • At least two partners required • Formal costs for written articles of associations and accounting obligations, that are more strict than for Gb. R • Application for entry in commercial register required • Managed by all partners or just by one/several appointed ones • Company management by non-partners possible • Personal unrestricted liability of all partners • Partners can be natural person and/or legal entity and partnership Doing Business in Germany

Partnerships - KG • Suitable for large and medium-sized companies • No minimum capital

Partnerships - KG • Suitable for large and medium-sized companies • No minimum capital required • At least two partners required • Formal costs for written articles of association and stating level of capital contributions • Application for entry in commercial register required • Managed by all general (personally liable) partners or just by one/several appointed general partners • Company management by non-partners possible • General partners unrestricted liable, limited partners just liable up to the level of their contribution • Partners can be natural person, legal entity and partnership Doing Business in Germany

Corporations - Gmb. H • Suitable for large and medium-sized companies • One partner

Corporations - Gmb. H • Suitable for large and medium-sized companies • One partner required the minimum • Minimum capital of 25, 000 Euros • Formal costs for articles of association that need to be certified by notary • Application for entry in commercial register required • Managed by managers, that are appointed by the partners • Company management by non-partners possible • Liable with the company assets, partners liable only to the level of their obligation of investment • Partners can be natural persons and/or legal entity Doing Business in Germany

NEW Limited One Euro GMBH Law of modernisation for the GMBH / Ltd ,

NEW Limited One Euro GMBH Law of modernisation for the GMBH / Ltd , Nov. 1 st, 2008 Das neue GMBH – Recht • • • • Im neuen GMBH –Recht gibt es hinsichtlich Stammkapital und Haftung zwei Varianten der GMBH. Neben der bewährten GMBH (Mindeststammkapital 25. 000 Euro) gibt es nun die haftungsbeschränkte Unternehmensgesellschaft (§ 5 a GMBH Gesetz) - „ein Euro –GMBH“ -. Diese kann ohne bestimmtes Mindestkapital gegründet werden, darf dann aber ihre Gewinne nicht voll ausschütten, sondern soll diese durch entsprechende Rücklagenbildung das Mindeststammkapital der normalen GMBH nach und nach ansparen. Die Verteilung, Zusammenlegung und Übertragung von Geschäftsanteilen wurde deutlich flexibilisiert. Jeder Geschäftsanteil muss nun nur noch auf einen Betrag von mindestens einem Euro lauten. Zur Vereinfachung der GMBH – Gründung und ersten Handelsregistereintragung gibt es Standardprotokolle. Diese sind zwar weiterhin beurkundungspflichtig, führen aber bei Verwendung zu einer Kostenprivilegierung. Genehmigungen (z. B. Handwerkskammer) als Eintragungsvoraussetzung im Handelsregister entfallen. Der Nachweis der Kapitalerbringung kann das Gericht nur bei erheblichen Zweifeln verlangen. In diesem Zusammenhang gibt es jetzt konkrete Regelungen zur „verdeckten Sacheinlage“. Der Verwaltungssitz (z. B. im Ausland) kann von der Satzung abweichen. Dadurch, dass die Gesellschafterliste (beim Handelsregister) dem öffentlichen Glauben unterliegt, wird der gutgläubige Erwerb von Geschäftsanteilen von in der Liste bezeichneten Gesellschaftern möglich. Dies erhöht den Anreiz, die Liste permanent aktuell zu halten. Das Gesellschaftsrecht wurde auch an geltende Insolvenzrichtlinien angepasst. Es gibt Verfahrenserleichterungen für Gläubiger, mehr Sicherheit hinsichtlich der Haftungsrangfolge und der Pflichten der Gesellschafter bei fehlenden Geschäftsführern. In the new GMBH Law regulations there are two varieties regarding the capital structure and liability. Besides the reliable GMBH (minimum capital 25. 000 Euro) there now is the option for a New Limited (§ 5 a GMBH Law)- “one Euro Limited”-This kind of company can be founded without any minimum of capital but after then it is forbidden to take out the total profit of the company. Part of the profit has to fill up the capital stock until it has reached step by step the minimum capital of a traditional Limited. The distribution, fusion and transfer of shares now can be done much more flexible. Each share now has to have the amount of a minimum of one Euro. To simplify the foundation of this Limited and its first registration there are set up standard protocols. They still have to be signed by a notary but if it is made use off these there will be a privilege of costs. There is no longer any necessity for approval in order to get registered in the commercial register. By that there is an incentive to keep this list permanently actual. This Law also was adjusted to the actual regulations regarding insolvency. There now are facilitation in procedures for the creditors, more security regarding the ranking of liability and the obligation of the shareholders in case of missing managers. Doing Business in Germany

Corporations - AG • Suitable for large companies • One shareholder required the minimum

Corporations - AG • Suitable for large companies • One shareholder required the minimum • Minimum capital of 50, 000 Euros • Formal costs for recording the statutes by a notary, the appointment of the first supervisory board and statutory auditor • Application for entry in commercial register required, that has to be certified by notary • Managed by the board of management, that is appointed by the supervisory board • Liable with company assets (basic capital) • Shareholders can be natural persons and/or legal entities Doing Business in Germany

Trusts • Suitable for pursuing of certain aims (incl. commercial ones) using assets •

Trusts • Suitable for pursuing of certain aims (incl. commercial ones) using assets • One founder needed • No minimum capital required, however fulfillment of the purpose of the trust has to be ensured • Formal costs for trust business and written trust statutes • No entry into register required but state recognition by the supervisory authority for trusts • Managed by the trust board of management (defined by the founder in the trust statutes • Liable with trust assets • No partners, instead beneficiaries of the trust assets Doing Business in Germany

Labour in Germany Doing Business in Germany

Labour in Germany Doing Business in Germany

What to know about the german labour market Ø Wages are among the highest

What to know about the german labour market Ø Wages are among the highest when comparing internationally (2012: € 30, 10 p. H. ) Ø Labour is known to be productive and skilled Ø Powerful and large Unions Ø Strong protection of workers by law Ø Costs for social security and health care split equally between employer and employee Ø Average working hours: 37. 5 hours/week Doing Business in Germany

The Contract of Employment Ø Written contracts between employer and employee are customary Ø

The Contract of Employment Ø Written contracts between employer and employee are customary Ø The following aspects should be included in the contract: - task description - Area of activity - remuneration - Effective day of the contract - Daily/weekly working hours - probationary period and its duration - Duration of the contract if short-term contracts - Declaration of confidentiality - Possible secondary occupations - Notice period - Leave allowance Doing Business in Germany

Labor conditions that have to be met Ø Minimum wages Ø Daily working hours

Labor conditions that have to be met Ø Minimum wages Ø Daily working hours of 8 hours (if >10 hours, a period of free time must be granted for compensation)* details to be read in AZG (Arbeitszeitgesetz) Ø In case of working hours between 6 -9 hours, employees can claim a break of 30 min. Ø Generally no work on sundays and holidays (some exceptions in specific branches) Ø At least 24 days of holidays per year Ø The employer has to continue paying if the employee is sick (up to 6 weeks with a doctor‘s certificate after then health insurance will pay up to 78 weeks) Doing Business in Germany

Notice of Termination Reasons for terminations: Ø Business reasons Ø Personal reasons Ø Conduct-related

Notice of Termination Reasons for terminations: Ø Business reasons Ø Personal reasons Ø Conduct-related reasons Ø Extraordinary termination Only written terminations are legal! Doing Business in Germany

Notice of Termination Ø In case of short-term contracts, no note of termination needed,

Notice of Termination Ø In case of short-term contracts, no note of termination needed, as already set in the contract Ø Within the probationary period (maximum 6 months) notice period of 2 weeks Ø In case of permanent contracts the notice period has to be met (4 weeks up to 7 months, depending on the time, the employee stayed in the company) Ø Kündigungsschutzgesetz in companies with >10 employees Ø Consider special rulings for protecting disabled people, young mothers and mothers to be Doing Business in Germany

Mini jobs and midi jobs 1. Mini jobs = part time jobs • Up

Mini jobs and midi jobs 1. Mini jobs = part time jobs • Up to € 400 per month • • • Or not working more than 50 days per year Flat rate charge (25 -30%) paid by the employer No taxes or charges paid by the employee 2. Midi jobs = low paid jobs • Between € 400 -800 per month • Goverment subsidizes social security contributions of the employee Doing Business in Germany

Social security system Forms of insurances: * 1. Health insurance (14. 9 -15. 5%)

Social security system Forms of insurances: * 1. Health insurance (14. 9 -15. 5%) 2. Nursing care insurance (1. 95%) 3. Unemployment insurance (3. 0%) 4. Pension Insurance (19. 6%) 5. Accident Insurance ( average 1, 53%) ** * notice: insurance 1. -5. split 50 % and to be covered by the entrepreneur , 50 % to be covered by the employee * * 100% to be covered by the entrepreneur, the amount is depending on the risk class; different for each branch Doing Business in Germany

Taxes in Germany Doing Business in Germany

Taxes in Germany Doing Business in Germany

Most important taxes for investors Ø Value added tax (VAT) Ø Income tax Ø

Most important taxes for investors Ø Value added tax (VAT) Ø Income tax Ø Company taxation Ø Corporation tax Ø Trade tax Ø Real estate transfer tax Ø VAT in the European single market Ø Import turnover tax Source: invest in Germany Doing Business in Germany

Taxes to be paid in Germany Tax Payments (number) Statutory tax rate Tax base

Taxes to be paid in Germany Tax Payments (number) Statutory tax rate Tax base Total tax rate (% profit) Value added tax (VAT) 1 19% value added 48. 5 Corporate income tax 5 25% taxable income 14, 4 Social security contributions 1 9. 75% gross salaries 11, 3 Trade tax 5 14%-20% Health insurance contributions 1 6. 25% Highway tax 1 € 485/100 l Unemployment contributions 1 3. 25% Insurance contracts tax 1 16% Fuel tax 1 € 484/1, 000 l Interest tax 1 Solidarity taxable income 9, 8 gross salaries 7, 2 fuel consumption 4, 5 gross salaries 3, 8 insurance premium 2, 9 fuel consumption 1, 7 20% interest income 0. 8 5 5. 5% corporate income tax 0. 5 Vehicle tax 1 € 5 -30/100 m³ engine capacity 0. 1 Property tax 8 > 0. 1% property value 0. 1 32 Totals: Source: World Bank – Doing Business. org Doing Business in Germany 57. 1

The biggest enterprises in Germany Doing Business in Germany

The biggest enterprises in Germany Doing Business in Germany

The ten biggest industrial companies in 2011 Company Sales in Million Euro Employees in

The ten biggest industrial companies in 2011 Company Sales in Million Euro Employees in 1, 000 Volkswagen AG 126. 875 399, 4 Daimler AG 97. 761 260, 1 E. ON AG 92. 863 85, 1 Siemens 75. 978 405, 0 BASF SE 63. 873 109, 1 Deutsche Telekom 62. 421 246, 8 BMW AG 60. 477 95. 453 Deutsche BP AG 54. 281 9, 7 RWE 50. 722 70. 9 Robert Bosch 47. 259 303. 0 Doing Business in Germany

The ten biggest trade companies in 2010 Company Sales in Million Euro Employees in

The ten biggest trade companies in 2010 Company Sales in Million Euro Employees in 1, 000 Metro AG 67. 258 252, 2 Schwarz-Gruppe 60. 000 310, 0 Rewe-Gruppe 53. 040 336, 0 Aldi Gruppe 50. 800 200, 0 Edeka Gruppe 42. 500 302, 0 Franz Haniel & Cie 27. 432 58, 1 Phoenix Pharmahandel 21. 738 23, 2 Lekkerland 12. 200 6, 2 Otto Gruppe 11. 404 49, 7 Tengelmann 11. 340 80, 3 Doing Business in Germany

The five biggest credit institutes in 2011 Company Balance sheet total in billion Euro

The five biggest credit institutes in 2011 Company Balance sheet total in billion Euro Employees in 1, 000 Deutsche Bank AG 1850 101, 69 Commerzbank AG 661 58, 16 LB BW 411 13, 63 DZ Bank AG 405 27, 83 HVB Group 400 21, 47 Doing Business in Germany

German Business Culture Doing Business in Germany

German Business Culture Doing Business in Germany

Cultural Dimension by Geert Hofstede Source: http: //www. geert-hofstede. com/hofstede_germany. shtml Doing Business in

Cultural Dimension by Geert Hofstede Source: http: //www. geert-hofstede. com/hofstede_germany. shtml Doing Business in Germany

Cultural Dimension by Geert Hofstede Ø PDI: Power Distance Index Ø IDV: Individualism Ø

Cultural Dimension by Geert Hofstede Ø PDI: Power Distance Index Ø IDV: Individualism Ø MAS: Masculinity Ø UAI: Uncertainty Avoidance Index Ø LTO: Long Term Orientation Doing Business in Germany

What to know about the German culture… Ø German living and working is defined

What to know about the German culture… Ø German living and working is defined by structure (laws, rules, procedures) Ø For decision-making and problem-solving Germans focus on objective facts Ø Interpersonal relationships do not play an important role in business dealings. Instead focus on archieving your tasks Ø Focus on direct communication style Ø Germans are individualistic Doing Business in Germany

What to know about the German culture… Ø The business culture has a well-defined

What to know about the German culture… Ø The business culture has a well-defined hierarchy which includes clear responsibilities and distinctions between roles Ø Status and academic titles are quite important to Germans – address people by their full and correct titles Ø In formal business meetings, the highest-ranking person usually enters the room first Ø A seperation between private life and work is quite common in Germany Ø First names are used in more private situations. Use the formal version of „Sie“ unless you are invited to the informal „Du“ Doing Business in Germany

What to know about the German culture… Ø Germans dress quite conservative in business

What to know about the German culture… Ø Germans dress quite conservative in business (dark suits, blouses, ties etc. ) Ø Punctuality is essential (in business and social situations) Ø Appointments are made for almost every situation Ø Germans plan ahead (book meetings some weeks in advance) Ø In business situations, hands are shaken at the beginning and at the end Ø Germans keep a larger personal space around them Ø Decisions are made slowly and methodically Doing Business in Germany

Sources Internet Sources: • http: //www. tatsachen-ueber-deutschland. de • http: //www. destatis. de/ •

Sources Internet Sources: • http: //www. tatsachen-ueber-deutschland. de • http: //www. destatis. de/ • http: //www. invest-in-germany. de/en/ (Business Guide to Germany) • http: //www. auswaertiges-amt. de/ • https: //www. cia. gov/cia/publications/factbook/geos/gm. html • http: //www. doingbusiness. org/Explore. Topics/Starting. Business/Details. aspx? economyid=75 • http: //www. buyusa. gov/germany/en/practices. html • http: //www. cyborlink. com/besite/germany. htm • http: //www. kwintessential. co. uk/etiquette/doing-business-germany. html • http: //www. communicaid. com/germany-business-culture. asp • http: //www. worldbank. org/ • http: //www. german-business-portal. info/ Other Sources: • Deutschland in Zahlen 2009, Institut der deutschen Wirtschaft in Köln Doing Business in Germany