5 Essential Tips To Know Before Investing in Germany
As the country with the strongest economy in the Eurozone, whose population has an unbeatable work ethic and enthusiasm about the future, Germany is a wise choice for investments of any kind. The German central bank is renowned for its stability and German products are world-famous for their high quality and efficiency. The country is extraordinarily business-friendly in terms of tax benefits and the open market –even to foreigners. And while its meticulous organization of the legal process may be frustrating at first, there is no more fertile ground to starting or investing in an upcoming enterprise. As long as you do your research and follow these five tips in how to go about planning your investment, you are sure to yield an abundant profit.
1. Register Your Corporation. There are two places where German law will require you to register: the local trade office where the business is set up and the commercial register. Exemptions from this include civil law partnerships and freelancers, but be sure you have all the details straight before you head over, because German bureaucracy can be a stickler for the fine points.
2. Know Your Taxes. While Germany offers start-up businesses incredible tax benefits, subsidies, and investment grants to help them get off the ground, residents of Germany are also required to pay income tax, corporation tax, and VAT. Make sure you’re clear on which of these apply to you before you go through with your investment.
3. Be Sure To Report Capital You Bring Into the Country. If you transfer capital in excess of €12,500 into a German account, you are required to report it, solely for tracking purposes, unless you are residing overseas. This is the same for liabilities or receivables in excess of €5 million.
4. Manage Your Loans Properly. If your company is exporting products from Germany, even as a foreigner you are entitled to a low-interest federal loan, often with a guarantee from the state. You may rest assured that the political and legal system, as well as the rest of the German infrastructure, are all organized to give your business the best chance to succeed.
5. Take Advantage of Your Business’s Location. Both German’s proximity to other key players in the world market as well as Germany’s reputation for being responsible, ethical, and innovative producers and business players means that you will have a loyal customer base cut out for you. Moreover, other European countries will be eager to support the German economy, knowing that their contributions will come back to help them in the long run.
With so many good things going for it, it’s clear to see why Germany, despite recent setbacks, remains one of the strongest economies, which the rest of Europe turn to for help during hard times. Whether you’re planning on physically following your investment to Germany or not, prepare yourself for your new business venture by sending us an inquiry or taking our German language level test.