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How to Do Business in Germany

Germany is Europe’s largest economy and second most populous nation. It has the fifth largest economy in the world and is a leading exporter of machinery, vehicles, chemicals and household equipment. Germany has a very strong technical and engineering background, and is very well known for these types of products. It has a highly skilled labor force and a very stable economy. It is the world’s third largest exporter of goods and is typically considered an export nation.

 

Germany itself is the largest consumer market in the EU with a population of over 80 million

 

Germany is part of the EU single market, which represents more than 500 million consumers. Germany itself is the largest consumer market in the EU with a population of over 80 million. Germany’s top imports are machinery (including computers), vehicles, mineral fuels, pharmaceuticals, plastics, medical equipment, organic chemicals, iron and steel, and aircrafts. The consumer base of Germany is affluent and the country is home to many small and medium sized businesses, called Kleine und mittlere Unternehmen (KMU in shorthand), by the Germans. This means there are many trade opportunities.

 
 

Introduction to Germany

 

The capital of Germany is Berlin. Although the unification of the east and west was nearly twenty years ago, the eastern part of germany still has a long way to go in comparison to the west when it comes to industrialization. Germany is divided into states, each of which has their own capital. Note that the Federal Statistic Office of Germany calculates GDP by state; you can find a link to it in our useful links section.

 

The Ruhr Gebiet

With a population of 5.1 million, the Ruhr Gebiet is the largest agglomeration of cities in Germany and the fifth largest in Europe. The Ruhr area is formed by several large cities that have grown together. It is an industrial center. According to a survey by the German newspaper Die Welt, 37 of the 500 largest companies in Germany have their headquarters in the Ruhr region, of which 16 are industrial and 21 are in the commercial and service sectors.

 

The Ruhr Gebiet includes the independent cities of Bochum, Bottrop, Dortmund, Duisburg, Essen, Gelsenkirchen, Hagen, Hamm, Herne, Mülheim an der Ruhr and Oberhausen and the districts Recklinghausen, Unna, Wesel and the Ennepe-Ruhr district, the parts of the Rhineland and Westphalia.

 

Major Cities

 
Map of germany
 

Note that Hamburg, Frankfurt and Munich contain the largest airports. You can find links to the official websites of each city in our useful links section.

 

Berlin

Berlin, the nation’s capital, is characterized by its well-developed infrastructure, an ultramodern telecommunications structure, a large number of affluent consumers, as well as an excellent science and research community.

 

Berlin’s economic structure is identified by its diversity: it is home both to industrial firms long in existence and small and medium sized businesses. Berlin is geographically central with a large airport and modern railway service.

 

Frankfurt

Frankfurt is considered one of the most versatile transport hubs in Europe. It is home to the eighth largest airport, extensive highways, and intricate railway network. It is known as the city of short distances.

 

Frankfurt is a world-class financial and services center and is one of Europe’s leading locations for companies

 

Frankfurt is a world-class financial and services center and is one of Europe’s leading locations for companies. It is the location of the European Central Bank and so is of international importance in terms of monetary policy. Frankfurt is also home to many other industries such as the creative industry, the IT and telecommunications sector, biotechnology and life sciences, and logistics.

 

Munich

Munich, the economic center of Southern Germany, has the strongest economy of any German city. Located in the heart of Europe, it has an excellent rail system and major airport. It has thriving automotive, aerospace, IT, medical engineering, and creative industries.

 
 

Currency

 

The currency of Germany since 2002 is the Euro (€), which is the common currency of 19 EU Member States.

 
 

Language

 

The official language of Germany is Standard German. Most Germans learn English as part of the school curriculum. However, there are many smaller communities of immigrants from countries such as Turkey, where they speak other languages.

 

English is a common language for business and you can find someone who speaks English in any community.

 

English is a common language for business and you can find someone who speaks English in any community.

 

However, be wary that although you are speaking the same language as your business counterpart, cultural customs vary. You can find out more about these in the Business Culture and Small Talk sections below.

 
 

Holidays in Germany

Save for December 25th, the majority of public holidays are different than those in the US. See below for a list in 2018. For a list in future years you can visit the US Embassy in Germany website, found in our useful links section.

 

HolidayDateObservance
EpiphanyJanuary 6Munich
Good FridayFriday before Easter SundayNationwide
Easter MondayMonday after Easter SundayNationwide
Labor DayMay 1Nationwide
Ascension DayMay 10Nationwide
Whit MondayMay 21Nationwide
Corpus Christi DayMay 31Bonn, Dusseldorf, Frankfurt, and Munich
Assumption DayAugust 15Munich
Day of German UnityOctober 3Nationwide
Reformation DayOctober 31Leipzig
All Saints DayNovember 1Bonn, Dusseldorf, and Munich
Repentance DayNovember 21Leipzig
Christmas DayDecember 25Nationwide
Boxing DayDecember 26Nationwide

 

Business Hours in Germany

 

Germans work an average of 35 hours per week (which is capped by law at 48 hours per week). German law requires 20 paid vacation days. German business people typically start work at 8am and take short lunch breaks starting around 12pm.

 

Germans work hard and play hard. At work, Germans work. German workers doing exchange in English speaking countries are often shocked at how much office time is spent on chats that are not work related.

 

 

Germans like to keep work and private life separate, as a matter of fact the German government banned work emails outside of working hours by law. Be sensitive to German business people who want to spend time with their families.

 

Time Difference

The time zone of Berlin is Central European Time which is GMT +1. This is six hours ahead of Washington, DC time.

 
 

Communication from the US

 

Email

Address emails with “Dear.” use “Mr.,” “Mrs.,” or “Miss” and the last name of your recipient.

 

In Germany there is a proper form of address Sehr geehrter which translates roughly as “Most esteemed…”. A direct translation sounds strange and stuffy, but this fact will remind you that you should always use “dear” when making initial contact.

 

As you develop a correspondence with a German importer/exporter, you may if invited to do so, use their first name.

 

However, even once you are on familiar terms, never ever send an email without a form of address such as “hello…(insert first name)” because to German eyes it looks negative, like a command. It can come across as a scolding, like one would get from their mother.

 

Making calls from the US

First dial 011, the US exit code. Next dial 49, the country code for the Germany. Then dial the area code (2-5 digits). And finally the phone number (3-9 digits) to successfully contact a German importer/exporter.

 

When answering the phone in Germany, it is common to identify yourself by your last name.

 

When answering the phone in Germany, it is common to identify yourself by your last name.

 
 

Traveling to Germany

 

Visas

US citizens may enter Germany for up to 90 days for tourist or business purposes without a visa. Should you need to stay longer in Germany you can find a link to help you in our useful links section.

 

Using a Cell Phone in Germany

In Europe, cell phones are typically called “mobiles” or “mobile phones.” In German, it is called ein Handy.

 

In general, it is recommended to buy a SIM card when traveling in Germany or to use an international SIM card as roaming can be expensive. In Germany all mobile networks use GSM and LTE, so any cell phone with a SIM card will work.

 

The Internet

Wifi (called W-LAN in German, pronounced VAY-lahn) internet access in Germany is increasingly widespread. It is common to find internet access in cafes, restaurants, and bars. With the difference between internet cafes and cafe’s blurring, it is wise to bring your own device. Another reason is the German keyboards have a different layout than US ones. Most German business hotels offer high-speed wifi internet access for either an hourly or a daily charge.

 
 

Find a trade show

 

iXPOS, The German Business Portal, was initiated by the Federal Ministry of Economic Affairs and Energy. It is a contact platform that makes Germany and its domestic market more transparent to foreign companies. On it you can find a very helpful directory for searching tradeshows by topic in English. You can find a link for it in our useful links section.

 

There is also a list of trade shows in Germany supported by the US government, you can find a link for this in our useful links section.

 
 

Business Culture

 

As they do in the US, the Germans use the saying “When in Rome, do as the Romans do” or “wenn du in Rom bist, verhalte dich wie die Römer.” Germans will expect you to have some knowledge of their customs and culture when you do business with them.

 

A Distinction Between What is Public and What is Private

Germans can appear to be less friendly and remote or cold when compared to US importer/exporters. The reason for this is that they keep business life completely separate from private life. They vary their behavior depending on whether an individual is part of their private life or part of their business life. Germans usually make the distinction between business partner and friend.

 

Germans can appear to be less friendly and remote or cold when compared to US importer/exporters. The reason for this is that they keep business life completely separate from private life.

 

For this reason, you will find that Germans may work together for a long period of time and never come to be on a first-name basis. It is important to recognize that if you are invited to use the first name of a German importer/exporter, it is an honor as you are crossing traditional boundaries.

 

Direct Communication

Germans make important statements directly and openly without softening them with niceties or “beating around the bush.” This can appear rude and threatening to a US importer/exporter, but it is entirely accidental. German import/exporters communicate very directly and explicitly.

 

It is important therefore to communicate explicitly and directly in kind, so that your German counterpart does not miss the meaning behind the message.

 

Formal and Hierarchical

Germans are very formal, and this extends beyond the setting for a meeting where people dress conservatively, arrive on time, greet everyone politely, and stick to the agenda. You can find this formality in details such as the rigidity with which one uses professional titles, and the importance of including academic credentials on your business cards.

 

Formality also has to do with a manner of speaking and an organization in discussion and thought. Logical, clear, and convincing reasons to do business are preferred to flare or “putting on a show.”

 

German business people are hierarchical in decision-making. It may take time for an importer/exporter to get back to you, as negotiations and contracts must be approved by upper management. It may also take time because German business people are thorough, detail-oriented, and adverse to risk.

 
 

Business Communication

 

Attire

 
people in business attire walking through street
 

Formal is a safe way to go. Men should wear a suit, shirt, and tie. Women should dress conservatively, with high necklines and nothing too flashy. You won’t be looked down on for being overly formal, but you may be for underdressing.

 

Timing

Germans are very punctual and believe that you should be also. Arrive 5 to 10 minutes early for meetings.

 

Hint: If you cannot attend a meeting, always give an explanation as to why you won’t be there.

 

 

German business people are most comfortable when they can organize and compartmentalize their day. Time, therefore, is managed carefully, and calendars, schedules and agendas must be respected. Trains arrive and leave on time to the minute, projects are carefully scheduled, and organization charts are meticulously detailed.

 

Introductions

German business people typically greet one another with a handshake. Throughout the day one can say Guten Morgen (meaning “good morning”), Guten Tag (meaning “good day”), and in the evening they say Guten Abend (meaning “good evening”). Even if you don’t speak German, it is very polite to make an effort using these few words.

 

Hint: In Germany, you are always wise to err on the overly formal side of things because it will be viewed as being very polite.

 

 

Address people using Herr (mister) or Frau (madame) unless you have been directed to use their first name. Don’t be offended if this never happens, as often colleagues in Germany who have been working together for years still address each other using last names. Professional titles, such as doctor or professor are also commonly used before the last name.

 

If you speak a few words of German be sure to use the more formal Sie rather than du when addressing someone.

 

Business Cards

When meeting, it is common to exchange business cards. It is not necessary to have them printed in German, but it is required to include any education beyond a bachelor’s degree on the card. Have a good supply of business cards at any meeting.

 

Small Talk

As mentioned in our Business Culture section, German business people keep their public and private lives separate. As a consequence, do not ask a German importer/exporter about his or her family. Also avoid topics of contention such as religion and politics. Finally, German people do not openly talk about money. Do not mention how much money you earn, how large your own house is, or what kind of car you own.

 

It is common for a meal to follow a business meeting. If alcohol is offered in the office cafeteria or at the restaurant, it is okay to have a glass of wine, but don’t overdo it.

 

It is common for a meal to follow a business meeting. If alcohol is offered in the office cafeteria or at the restaurant, it is okay to have a glass of wine, but don’t overdo it. Generally, follow the lead of your German counterpart when eating or drinking.

 

Gifts

Gift-giving is typically inappropriate in a business setting. Anything that may oblige the recipient is taboo or possibly even illegal.

 

If you are invited into the private sphere of the German business person, such as to their home or out for a social occasion, it is appropriate to bring a small gift such as flowers, wine, or chocolates, or a traditional item from the US.

 

A gift of flowers: Give flowers in uneven numbers (avoiding 13). Do not give roses as they symbolize romantic intentions. Do not give lilies or chrysanthemums as they are used for mourning.

 

 
 

Business Negotiations

 

German business people have excellent negotiation skills. Expect negotiations to move quickly, as German importer/exporters are very direct and don’t beat around the bush.

Here are a few things to bear in mind when negotiating with a German business person:

 

  • Cost-conscious: Expect your German counterpart to concentrate quickly on the price during negotiation, and especially price-quality relationships.
  • Directness: German business people usually mean exactly what they say and they expect you to do the same. It is okay to say “no” during negotiations, but give reasons why in a positive and constructive way.
  • Don’t like to be pressured: If a German business person says they will consider it, they mean exactly what they say. You will achieve more if you give them time to make a decision.
  • Compromise: German business people will come up with a compromise that suits both parties if negotiations reach a deadlock. They have a fundamental sense of fairness, and tend not to take advantage.
  • Credibility: Building credibility with your German counterpart is very important. German importer/exporters will honor the fact that they have a positive past with your business. If it is the first meeting or negotiation, you can build credibility by always offering constructive reasoning that is delivered directly.
  • Comparison: Do not compare your company to your competitors in a negative light. Focus on the positives about your business. Note that comparative advertising is not common in Germany. German negotiation is a stand alone process. They are interested strictly in your business when they negotiate with you.

 

 
 

Making Payments

 

The fastest, easiest, most inexpensive, and completely safe way to pay your supplier in Germany is to use Veem. Veem is safer than your traditional bank, and it allows you and your supplier to track the payment from end to end. This will help build credibility with your suppliers as they will always know when they’re getting paid.

 

Using Veem to make a payment is as simple as sending an email.

 

With Veem you’re assured that our staff has verified your supplier by confirming their bank details and making sure that they have passed all regulatory compliance requirements.

 
 

Regulations and Permits

 

Importing Goods from Germany

 

Hire a Customs Broker

A customs broker acts as your liaison with the government, takes care of the paperwork of importing, and helps you navigate any regulations. They can also help you to estimate import costs and how long your shipment will take to be imported. Failing to comply with customs regulations can be very costly, so just be sure to add your custom broker’s fee as an expense you must cover with the sale of your goods. You can find links to help you find a broker in our useful links section.

 

Exporting Goods to Germany

 

Trade Barriers

Regulations in Germany can be difficult for US companies to navigate. Germany has complex safety standards that require close attention by US exporters. US suppliers are wise to research these thoroughly. A link for where to begin researching these can be found in our useful links section.

 

Tariffs

Exporting products to Germany is subject not only to the regulations of the EU, but also to Germany’s own customs procedures. For the EU regulations, you can visit TARIC, the site for the integrated tariff of the EU, and for Germany’s you can visit the German customs site, both found in our useful links section.

 
 

Useful Links

 

About Germany:

CIA World Factbook: Germany
Statistics Office of Germany
US Commercial Service Guide to Germany

 

Regional webpages:

Ruhrgebeit
Berlin
Frankfurt
Munich

 

Holidays in Germany:

US Embassy in Germany

 

Find a Tradeshow:

iXPOS Exhibition Directory
Trade shows Supported by the US Government

 

Visas:

Passports and International Travel: Germany

 

Finding a Customs Broker for Importing from Germany:

National Customs Brokers and Forwarders Association of America
International Federation of Customs Brokers Associations

 

Regulations when exporting to Germany:

Trade Barriers
Tariffs from the EU
German Customs for Business

 

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