Doing Business with Germany
|Religion||27% Roman Catholic, 25% Protestant, 5.2% Islam, 39% no religion|
|State system||federal Republic|
|Head of State||Frank-Walter Steinmeier|
|Head of government||Olaf Scholz|
|Time shift||0 hours|
|Nominal GDP (billion USD)||4,868.80|
|Economic growth (%)||2.8|
The Federal Republic of Germany is a federal parliamentary republic consisting of 16 federal states (Bundesländer). The government is divided between the federal level and the individual states. The head of state is the federal president and the head of executive power is the chancellor.
Germany is the largest economy within the EU and the fourth largest economy in the world (after the USA, China and Japan). It owes its competitiveness and position in the world economy to its innovative capabilities and pro-export orientation.
The Federal Republic of Germany (FRG) has long been our largest trading partner, accounting for 28.6 percent of our total foreign trade turnover. Germany is the largest outlet for our goods. 31.9% of our exports go to the German market. 24.9% of our total imports come from Germany (also 1st place). From the point of view of the Czech Republic, the trade balance has been active for a long time. Czech-German foreign trade saw a recovery in 2021 after the coronavirus slump in 2020. In 2021, turnover increased by 17.1% and trade exchange reached EUR 97.2 billion.
Opportunities for Czech-German cooperation are mainly found in new and promising fields: automotive (hydrogen, electromobility, autonomous driving), ICT (digitalization, e-commerce, artificial intelligence, technology enabling work with remote access, implementation of 5G networks), Industry 4.0, energy (renewable sources, electricity storage, decommissioning), industrial decarbonization technology, pharmaceutical industry and biotechnology, nanotechnology, weapons technology and industry, organic food, tourism and spa industry.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
- Police: 110
- Fire brigade, rescue service, medical emergency: 112
- Domestic telephone information: 11833, online: www.11833.de
Important web links and contacts
The main portal of the German state administration is www.bund.de
Important links for entering the German market (chambers, associations and agencies for the promotion of investment and trade, etc.)
- Germany Trade and Invest www.gtai.de
- Chamber of Industry and Commerce – DIHK
- Foreign Chambers of Commerce AHK
- Czech – German Chamber of Commerce DTIHK
- Customs administration www.zoll.de
Economic research institutes
- Institut für Wirtschaftsforschung München www.ifo.de
- Deutsches Institut für Wirtschaftsforschung Berlin www.diw.de
- Institut für Wirtschaftsforschung Halle www.iwh.uni-halle.de
- Rheinisch-Westfälisches Institut für Wirtschaftsforschung Essen www.rwi-essen.de
- Institut für Weltwirtschaft Kiel www.uni-kiel.de • Hamburgisches Welt-Wirtschafts-Archiv www.hwwa.de
Other important addresses:
- Information portal of practical information and links for Germany www.msn.de
- Travel planning www.reiseplanung.de
- Deutsche Bahn timetable and information www.deutschebahn.de
- Municipalities and cities of the Federal Republic of Germany www.kommon.de
- City plans in Germany www.stadtplandienst.de
- German telephone directory www.teleauskunft.de
- Postcodes https://www.postdirekt.de/plzserver/
PaulSourcing: Ten Commandments for doing business with Germany
The PaulSourcing agency has prepared ten recommendations for doing business with Germany for Czech entrepreneurs interested in business relations with Germany. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the German market during the coronavirus pandemic:
- Search and selection of business partners Use the database
Wer liefert was?
to find contacts and initial market mapping. It is the largest B2B database for the DA-CH region, over 570,000 German companies are registered in the database. The database is free and very intuitive – just enter a keyword. The database is available in German and English. You can further filter the search results according to various attributes, such as the nature of the company (manufacturer, wholesaler, retailer, service provider), number of employees or zip code. The PaulSourcing foreign office can supplement the search for suitable contacts with contacts or information from paid database sources.From the searched list, select a group of companies that are the most promising according to your focus and you want to contact them. Search for a specific contact person from the company on the professional social networks LinkedIn and XING (XING is the German equivalent of LinkedIn). The Hunter.io tool will help you find out the composition of a personalized email.
- Contact and feedbackWe recommend making the first contact by e-mail in German. In the body of the e-mail, briefly introduce your company and the products or services you offer. Add your catalog, price lists, delivery terms and other marketing materials in PDF to the attachment, all ideally translated into German. The more information you provide up front, the better.After sending e-mails, we always recommend phone verification, when you need to find out whether the person received your e-mail and request feedback. In this case, it is ideal if you speak German and can talk to the company representative in his native language. Germans like to talk on the phone. If you talk to Germans on the phone in German, you have a better chance of success. If you don’t have a direct phone line to a contact person, always want to connect with a specific person by name. If you want to talk to, for example, the purchasing manager without mentioning a specific name, they will often refuse to connect you. Consider buying a SIM card with a German phone number and prefix +49. It can be purchased in German supermarkets for 13 euros.
- ReferencesIn Germany, credibility is more important than price. Work with references – if you have references from Germany, companies from Western Europe or subsidiaries of German companies operating in the Czech Republic, mention them in your contact form.
- Preparation of documentsAt the moment, some companies are already operating normally, but many administrative workers are still in home office mode. It is therefore possible that you are not allowed to join one of the companies. In the meantime, spend time preparing high-quality materials for addressing in German. We recommend that translations into German be corrected by a native speaker before printing the materials.
The Ten Commandments for Trading with Germany
- You respect cultural differences and prepare for negotiations Prepare for the different style of dealings of the German partner, whose characteristics are matter-of-factness and directness, do not be discouraged by the partner’s seeming moderation. Germans are not afraid to go into conflict, so it is advisable to be well prepared for negotiations and equipped with arguments.
- Communicate systematically Try to have a substantive discussion, do not deviate unnecessarily to details, act point by point, in a structured way, distinguish between priorities and less important things.
- Use the ability to improvise In addition to adapting to the German organization, it is also an advantage not to give up the Czech ability to improvise and to exercise creativity.
- Present yourself confidently A high- quality and modern website and promotional materials play an important role in the external presentation of the company. Today, the website is the company’s business card, which determines its position and perception on the market. Continuous and very active professional marketing promotion is key to a stable position on the market.
- Don’t be afraid to talk on the phone Due to the formal and often measured way of communication, you will find out much more from a telephone conversation than simply communicating via email.
- Do not rely on the fact that you can communicate in English In small and medium-sized companies, you cannot do without German. Knowledge of German is always an advantage, it increases the “comfort” of communication during long-term cooperation and, at the same time, credibility in front of a German partner.
- Keep deadlines and be reliable. Reliability, trustworthiness, keeping your word and agreed deadlines, pragmatism and punctuality are necessary for the long-term development of business relations with German partners.
- Do not underestimate the German partner’s knowledge of the information. Do not inflate the prices unnecessarily! German companies have perfect price information not only from the hyper-competitive German market, but thanks to their position as export champions from almost the entire world.
- Only good price and quality are not enough in a demanding concentrated market Design and innovation today mean a selling point and a source of competitive advantage. Don’t forget about certifications and references. Germany is a close but really challenging market.
- Look for a sales representative Germans are excellent salesmen – look for sales representatives with already established distribution channels – the motivation is given by the nature of the commission rewards. It is a financially less demanding and significantly faster way to get to the German market.