Doing Business in Germany

GERMANY
Introduction:
Germany is a country located in the heart of Western Europe. It is bordered by Denmark,
Poland, Czech Republic, Austria, Switzerland, France, Luxembourg, Belgium, Netherlands,
the North Sea, and the Baltic Sea. Germany has a strategic location on North European Plain
and along the entrance to the Baltic Sea. The government system is a federal republic; the chief
of state is the president, and the head of government is the chancellor. Germany has a mixed
economic system which includes a variety of private freedom, combined with centralized
economic planning and government regulation. Germany is a member of the European Union
(EU).

History:

Germany Timeline(BCE)
500 German tribes move into the northern Germany.
113 Germanic tribes begin to fight against the Roman Empire.
57 Much of the region is conquered by Julius Caesar and the Roman
Empire during the Gallic wars.

Germany Timeline
(CE)
476 German Goth Odoacer becomes king of Itlay signalling an end to the
Western Roman Empire.
509 The King of the Franks, Chlothar I, took control of much of Germany.

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Doing Business in Germany

800 Charlemagne is crowned the Holy Roman Emperor. He is considered

the father of the German monarchy.

Printing Press:
843 The Treaty of Verdun divides the Frankish empire into three separate regions including
East Francia, which would later become the Kingdom of Germany.
936 Otto I is crowned King of Germany. The Holy Roman Empire is centered in Germany.

1190 The Teutonic Knights are formed.

1250 Emperor Frederick II dies and Germany becomes a number of independent territories.

1358 The Hanseatic League, a powerful group of merchant guilds, is established.

1410 The Teutonic Knights are defeated by the Polish at the Battle of Grunwald.
1455 Johannes Gutenberg first prints the Gutenberg Bible. His printing press will change the
history of Europe.
1517 Martin Luther publishes his 95 Thesis which marks the beginning of the Protestant
Reformation.
1524 German peasants revolt against the aristocracy.
1618 The Thirty Years' War begins. It is fought largely in Germany.
1648 The Thirty Years' War comes to an end with the Treaty of Westphalia and Treaty of
Munster.

Theses:
1701 Frederick I becomes the king of Prussia.
1740 Frederick the Great becomes king. He expands the German Empire and supports the
sciences, arts, and industry.
1756 The Seven Years' War begins. Germany allies with Britain against France, Austria, and
Russia. Germany and Britain win.
1756 Famous composer Wolfgang Amadeus Mozart is born.
1806 The French Empire under Napoleon conquers much of Germany.
1808 Ludwig van Beethoven's Fifth Symphony is first performed.
1812 German writers the Brothers Grimm publish their first collection of folk tales.
1813 Napoleon is defeated at the Battle of Leipzig in Germany.
1848 German philosopher Karl Marx publishes The Communist Manifesto which would be
the basis for Marxism and communism.
1862 Otto von Bismarck is elected Prime Minister of Prussia.
1871 Germany defeats France in the Franco-Prussian War. The German states are unified and
the national parliament, called the Reichstag, is established.

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Doing Business in Germany

1882 The Triple Alliance is formed between Germany, Austria, and Italy.
1914 World War I begins. Germany is part of the Central Powers with Austria and the Ottoman
Empire. Germany invades France and Russia.

Adolph Hilter:
1918 World War I ends and Germany is defeated.
1919 The Treaty of Versailles is signed forcing Germany to pay reparations and give up
territory.
1933 Adolf Hitler becomes Chancellor of Germany.
1934 Hitler declares himself Fuhrer.
1939 World War II begins when Germany invades Poland. Germany is part of the Axis
alliance including Germany, Italy, and Japan.
1940 Germany conquers much of Europe.
1941 Germany declares war against the United States after Pearl Harbor.
1945 World War II in Europe ends when the German army surrenders to the Allies.
1948 The Berlin Blockade occurs.
1949 Germany is split into East and West Germany.
1961 The Berlin Wall is built.
1973 East and West Germany both join the United Nations.
1989 The Berlin Wall is torn down.

President Reagan at the Berlin Wall:

1990 Germany is reunified into a single country.
1991 Berlin is named the capital of the new unified country.
2002 The Euro replaces the Deutsche Mark as the official currency.
2005 Angela Merkel is elected as the first woman Chancellor of Germany

About 55 BC Julius Caesar conquered the Roman province of Gaul. He made the Rhine the
frontier of the new province. It was a natural defensive barrier. Later the Romans also chose
the Danube as a frontier. They also created a ditch and earth bank with a wooden palisade on
top from the Rhine to the Danube. In 9 AD the people who lived beyond the Rhine inflicted a
crushing defeat on the Roman army in a battle at the Teutoburg Forest. The Romans lost about
20,000 men and their leader committed suicide. The battle ensured that the Romans never
conquered Germany beyond the Rhine. However the Romans occupied southern and western
Germany. They founded a number of towns which still survive (Augsburg, Cologne, Mainz,
Regensburg and Trier).

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Doing Business in Germany

In the late 5th century a Germanic people called the Franks carved out an empire in what is
now France. (They gave the country its name). In 496 Clovis, the leader of the Franks became
a Christian and his people followed. In 771 Charlemagne became king of the Franks. In 772 he
attacked the Saxons. After a battle in 782 more than 4,000 Saxon captives were beheaded.
Charlemagne also annexed Bavaria. In 800 he was crowned emperor. However Charlemagne's
empire did not long survive his death. In 843 it was divided into three kingdoms, west, middle
and east. In time the eastern kingdom, East Francia, was divided further into 5 duchies. In the
early 10th century fierce Magyars from Eastern Europe attacked them.
Geography:
Germany covers an area of about 357,000 square km (138000 square miles) in the central path
of Northern Europe. The country borders on Denmark, Poland, the Czech Republic, Austria,
France, Luxemburg, Switzerland, Belgium and the Netherland, and on the North and Baltic
Seas. As might be expected from her geographic location, Germany enjoys a temperate climate;
there are no great extremes of heat or cold, although the weather can often only be described
as wet. The topography rises progressively from the flat plains of the northern coasts through
the undulating hills and forests in the centre of the country to the Alphine foothills in the south.
Indeed the southern border passes through the Alps themselves, giving Germany her own area
for skiing and other winter sports.
Except for Danube in the south of the country and its tributary, the inn, Germany’s rivers all
flow in the general direction of south to north. The Danube flows east ultimately into the black
sea south of Odessa. The other main rivers are the Rhine with its tributaries, the main, the Elbe
and Oder. The Rhine and the Main are linked to the Danube by a canal and all three rivers are
navigable by large, freshwater barges. This system is recognised international waterway
between Rotterdam and the Black Sea ports.
Country Facts
Capital Berlin
Constitutional form Federal Republic of Germany
Area 357,000
Population 82.5
Language German
Currency Euro

Population and social patterns:

The German population on December 31, 2019 was estimated at 82.44 million on the basis of
extrapolations taken from a mini-census taken in December 2018. Annual deaths regularly
exceeds birth, so the general tendency is that of a falling and aging population. For the present,
this is compensated by immigration from abroad. Official estimates suggest that the population
will fall to some 68 million by 2060, if current trends remain unchecked. However the short
term and long term effects of the current influx of refugees from Africa and the Middle East
are not yet clear.

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Doing Business in Germany

Germany is more densely populated than either of her two largest neighbours France and
Poland. The population density is greater in the traditionally industrial areas of the Ruhr and
parts of Saar the commercial centres of Cologne Dusseldorf, the Rhine- Main area of Frankfurt/
Wiesbaden, Berlin and on a smaller scale in and around the other larger cities. Few areas can
be described as under-populated.
There is no significant tendency on the part of the population to emigrate, although all residents
are free to do so, and to take all their assets with them. There is still a certain amount of
migration within Germany herself, generally from east to west, although this trend is now
slowing as living standards and costs in the east rice towards the national average.
The German population does not have a tradition of mobility within the country. Movement is
hampered by cultural differences and by other factors such as the decentralised education
system with a different syllabus for the schools of each province. There are only two indigenous
national minorities a small Danish minority in northern Schleswig-Holstein and a small Sorb
population living in the general area to the south east of Berlin. The foreign population numbers
10 million of which Turkish citizens form by far the largest single national group, numbering
1.5 million. Other significant groups are Poles, Italians, Romanians and Greeks.
From the early 1950s to the early 1970s, the then West Germany state actively encouraged the
recruitment of foreign labour, particularly in other European countries with high
unemployment, to live and work in Germany for a temporary period. This policy was reversed
in 1973 to one of restriction, with the general aim of reducing or at least containing the number
of non-EU citizens working in Germany. The restriction gave foreign workers already resident
a considerable inducement to remain if they possibly could, so the foreign population tended
to become permanently rather than temporarily, resident. Indeed, by now, at least half the
foreigners living in Germany have been here for more than ten years and many of the younger
individuals are second to third generation residents who have never lived anywhere else.
Language:
The official language is German. English is by far the best known foreign language and is
generally accepted as the common medium for all forms of communication abroad it also quite
usual for educated Germans to have a good command at least one other foreign language, the
most widespread being French, Italian, Spanish and the various Slav languages.
Political System:
The constitutional form is the federal republic of Germany. Sixteen provinces form the
federation implied by the name. Each level of government is directed by an elected body
competent to take decisions on all matters remitted to it by the constitution. Berlin is the capital
and the home of both chambers of the federal parliament. Many government departments are
located in various other German towns, particularly in Bonn, the former West German capital.
The federal parliament has two chambers. The lower chamber is elected by the population for
a four year term. Its seats are allocated on a system of proportional representation. The
government is formed by the party or coalition with a majority of the seats. The remaining
parties in the Bundestag form, collectively the opposition. The upper chamber (Bundersrat) is
made up of members delegated by the parliaments of the individual provinces with votes in

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Doing Business in Germany

rough proportion to the size of their populations. The party allegiances of its members reflect
the identity of the governing party or coalition in each province.
Most acts of parliament are initially proposed and debated in the Bundestag. The Bundesrat
does have certain rights to propose, or to propose changes to bills, although its primary
functions is to safeguard the interests of the provinces against acts of expropriation by the
federation. Since al the laws affecting the interests of the provinces are subject to its approval,
very few laws of national importance can be passed by Bundestag without the support of the
majority of the Bundesrat. This division of political functions and responsibilities encourages
a spirit of compromise on all major political issues.
Bills are enacted on signature by the federal parliament (Bundesprasident) to whom they are
submitted after acceptance by both chambers of parliament. The signed acts than take effect on
promulgation in the Federal Journal of Statutes (Bundes-gesetzblatt).
The present government is a coalition of the Christian Democrats (CDU/CSU) and the social
democrats (SPD).
Germany is a founder member of the European Union (EU) and takes an active part in the
activities of all its subordinate institutions.
Legal System:
The ultimate source of all law is the constitution or “Basic Statue” (Grundgesets). Acts of either
the federal or the provincial parliament are void if they conflict with the constitution or are
passed in an unconstitutional manner. Similarly all acts of the provincial parliament must be in
accordance with the provisions of the constitution of the relevant province.
The government individual ministries and other authorities have the power to issue guidelines,
decrees and other pronouncements. These ordinances are of varying degrees of authority and
require the approval of differing levels of government. Tax guidelines, for example, but not
decrees, require the consent of the Bundesrat. These extra-stuatory instruments bind, at lead to
the extent of their terms, the issuing authority and its subordinate authorities, but not courts of
law. They cannot amend the law as its stands, but give guidance on the issuing authority’s
preferred interpretation thereof.
The German court system is decentralized. Initially, cases are held locally and appeals are made
to a higher court responsible for a wider geographic area. The courts are divided into a number
of different streams, each specializing in its own field of law. There are for example separate
courts to try suits on tax or labour law. At the head of each stream is single, federal Supreme
Court to which appeals can be made by either side on points of law but not of fact. He ultimate
arbiter is the constitutional court in Karlsruhe to which final appeal can be made, although only
on the grounds of conflict with the constitution.
The judgement of the Federal Constitutional Court are binding on all other courts. The
judgements of all other courts including the supreme court of each stream are only binding in
respect of the case tried and do not set binding precedents for other cases of a like nature. They
may however give guidance to other courts, especially to lower courts of the same stream,
although even a lower court is free to depart from an established precedent if it feels that
circumstances warrant a change.

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Doing Business in Germany

Economy:
Foreign and security policy:
Germany contributes actively to international peace and prosperity. It has played a key role in
addressing ongoing conflict in Ukraine and Islamic State terrorism in Iraq and Syria. As the
EU’s largest economy, Germany exerts significant influence over the group’s common foreign
and economic policies, including measures to help Europe recover from a multi-year debt
crisis.
Germany supports multilateralism. It is the third-largest contributor to the United Nations’
(UN) budget and largest contributor to the EU budget. It has lead responses to common
challenges such as energy security, climate change, nuclear non-proliferation and counter-
terrorism. It supports the Middle East Peace Process and as a member of the E3+3 nuclear
negotiations with Iran was influential in reaching agreement on a Joint Comprehensive Plan of
Action on Iran’s nuclear program. Germany is a major contributor to humanitarian assistance
projects across the world, with an official development assistance budget of US$17.8 billion in
2015.
The NATO alliance is the anchor of German defence and security policy. In Afghanistan,
Germany contributed many troops to the NATO-led mission, an expert to the UN Assistance
Mission and continues to provide troops for the Resolute Support Mission. Germany
contributes to UN peace missions in Darfur, South Sudan, Liberia, Lebanon, Western Sahara,
Kosovo and Mali and to the Building Partner Capacity Coalition in Iraq.
Bilateral relationship:
Overview:
Australia and Germany have a warm, vibrant and diverse bilateral relationship. Both countries
have closely aligned interests and perspectives on a wide spectrum of issues, as outlined in the
Berlin-Canberra Declaration of Intent on a Strategic Partnership. They work closely in
multilateral forums, including the UN and G20, to address global economic governance,
counter-terrorism, poverty alleviation, non-proliferation and disarmament issues, and climate
change. Australia and Germany are committed to promoting international trade liberalisation
and deepening economic linkages.
Significant recent developments:
The November 2015 report to Chancellor Merkel and Prime Minister Turnbull by the Australia-
Germany Advisory Group (AGAG) has been a driving force behind recent intensification of
the bilateral relationship. Containing 59 recommendations across five themes – trade and
investment, strategic dialogue, science and education, diversity and integration, and culture and
sport – the report provided a comprehensive blueprint to build on Australia and Germany’s
complementary strengths.
Implementation of AGAG’s recommendations over the course of 2016 has significantly
strengthened the bilateral architecture. The establishment of the 2+2 Ministerial Meeting, a
high- level meeting involving foreign and defence ministers, together with a new regular
officials-level Asia dialogue and a new 1.5-track dialogue, has led to closer strategic
engagement between our governments and public policy leaders.

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Doing Business in Germany

The progress report by AGAG co-chairs [PDF], Australian Minister for Finance Mathias
Cormann and German Minister of State Maria Böhmer, highlights the key achievements during
2016 by government and non-government stakeholders in implementing AGAG’s proposals.
High level contact and visits are important in promoting cooperation and understanding
between Australia and Germany. Recent high-level bilateral visits include:
According to the 2016 census, over 102,000 Australian residents were born in Germany, while
almost one million Australians claim German ancestry. In 2015-16, 25,980 working
holidaymaker visas were issued to young Germans, Australia’s second-largest source behind
the UK. Germany was the second-largest European market for tourists visiting Australia
(208,100) in 2017.
A significant number of Australian artists are based in Germany, working in music, performing
and visual arts, literature, as well as arts management. The cultural diversity of both countries
support a long history of exchange in culture, arts and sport. The Australia now 2017cultural
diplomacy program built on these ties by promoting contemporary perspectives on Australia’s
creative excellence, diversity and innovation among Germany’s sophisticated audiences.
AGAG’s recommendations included a major theme on strengthening bilateral exchange in arts,
culture and sport. Stakeholders in both countries are making good progress toward joint artistic
performances, friendly football matches and closer cooperation in wine manufacturing.
Innovation and R&D linkages:
Australia and Germany share strong ties in innovation and research. More than 500
partnerships and cooperation agreements exist between Australian and German universities.
Germany is a key partner for Australia’s peak scientific body, the CSIRO. German partner
organisations include the Fraunhofer Gesellschaft and the Max Planck Institute. Areas of
collaboration with German organisations include: ICT, food safety technology and food
processing, solar technology, materials science and engineering, crop science, science
education programs and radio astronomy and aerospace research.
In addition to the implementation of AGAG’s extensive recommendations in science, research
and innovation cooperation, the Australian Government in 2016 established an innovation
landing pad in Berlin to assist Australian start-ups and entrepreneurs access world-class in-
market business development, investment and mentorship in Germany and across Europe.
Education linkages:
Germany is the fourth-largest source country of European students after Italy, the UK and
Spain, with 5,147 German students studying in Australia in 2017. Postgraduate studies provide
Australian institutions with the greatest opportunities to enter the German market, particularly
in the areas of Information Technology, International Law and International Business and
Technology.
The German Academic Exchange Service (DAAD) and Universities Australia signed the
Australia-Germany Joint Research Cooperation Scheme in December 2014 to support bilateral
research exchanges. The Alexander von Humboldt Foundation also offers grants for research
exchanges.

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Doing Business in Germany

Bilateral economic and trade relationship:

Australia’s economic relationship with Germany is substantial:
Some of the largest German employers in Australia are Allianz, Hanson Australia
(Heidelberger Zement), BOC (Linde), Siemens, Bosch, DB Schenker and Deutsche Bank.
Other German companies have a presence across a number of industries in Australia, including
automotive and advanced manufacturing (Bosch, Hella, Continental, ZF, Fuchs, Carl Zeiss),
ICT (SAP Research, Software AG, IMC), pharmaceuticals/chemicals (Boehringer Ingelheim,
Bayer, BASF, Evonik, Fresenius Medical Care), logistics and transport (DBSchenker, DHL),
clean technologies (Remondis) and banking/insurance (Munich RE, Commerzbank, Allianz)
and clean energy (SMA, Schueco, Degerenergie).
A range of Australian companies have a large presence in Germany. Sonic Healthcare and CSL
Behring, both in the medical sector, employ around 5,000 and 2,000 people respectively,
making them the biggest Australian employers in Germany. High profile Australian
companies, like Macquarie Bank, have a broad range of interests in Germany, from wind farms
to internet start-ups. Large Australian investment companies, like IFM investors, have made
investments in sectors like the electricity grid, buying 40 per cent of '50Hertz Transmission,'
which transports power to 18 million people in Germany.
A number of other Australian companies also operate in Germany. Ceramic Fuel Cells (CFCL)
launched its BlueGen gas-to-electricity product and opened its fuel cell stack manufacturing
plant in the German state of North-Rhine Westphalia (NRW). Quickstep Technologies, a
composite materials manufacturer, has secured a manufacturing development contract with
Airbus Germany. Plantic Technologies, which produces biodegradable packaging, has its
European Headquarters in the German State of Thuringia. In recent years, other Australian
companies have been active in a wide range of German sectors, including Cochlear, Transfield
(solar cell technology), ResMED (anti-snoring), John Fairfax newspaper and magazines, Burns
Philp (yeast and bakery), Greencorp Magnetics, (recording tapes), Brambles (waste
management), Amcor (packaging), MIM, Moldflow (software solutions), SDI (dental
products), Nufarm (agricultural products) Goodman Group (real estate) and AHL (cinemas).
The Australian Trade Commission (Austrade) operates an office in
Frankfurt:
Bilateral trade:
Germany is Australia’s tenth-largest trade partner, with two-way goods and services trade
A$20.6 billion in 2018-19. Australia’s total goods and services exports to Germany were worth
A$4.3 billion in 2018-19, of which goods accounted for A$2.7 billion. Major Australian goods
exports to Germany are oil seeds, gold coins, precious metal ores and concentrates, coal and
pharmaceutical products. Germany is Australia’s fifth-largest source of imports (A$16.3
billion), comprising mostly goods (A$13.6 billion). Major goods imports from Germany are
cars, medication, pharmaceuticals and goods vehicles.
Bilateral investment:
Germany is the sixth-largest destination for Australian investment abroad. The level of
Australian investment in Germany at the end of 2016 was worth A$65.8 billion.

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Doing Business in Germany

Germany is Australia’s thirteenth-largest source of foreign investment. Germany’s total

investment in Australia in 2018 was valued at A$38.8 billion. German investment spans
automotive and manufacturing, information and communications technology, pharmaceuticals
and finance.
Recent developments:
A key recommendation of AGAG was to sign a revised double taxation agreement (DTA). The
DTA entered into force on 1 January 2017, enhancing the infrastructure supporting bilateral
trade and investment. The revised treaty provides increased certainty for businesses in Australia
and German and reduces tax impediments to bilateral trade and investment.
The Asia-Pacific Regional Conference, held in Perth from 3 to 5 November 2017, brought
together business and government leaders from Germany, Australia and the Asia-Pacific to
showcase the opportunities in both countries’ economies. President Steinmeier and Prime
Minister Turnbull jointly opened the conference and Ministers Cormann, Bishop, Dutton,
Cash, Frydenberg and Pyne participated in elements of the conference program.
Industrial Production:
Germany's Industrial production fell 0.5 % YoY in Feb 2019, following a drop of 2.7
% YoY in the previous month. Germany's Industrial production index growth rate YoY
data is updated monthly, available from Jan 1959 to Feb 20 19, with an average rate of
2.6
%.
The
data

reached an all-time high of 17.3 % in Jun 1985 and a record low of -22.1 % in Apr
2009. CEIC calculates Industrial Production Index Growth from monthly Industrial
Production Index. Federal Statistics Office Germany provides Industrial Production
Index with base 2015=100. Industrial Production Index Growth prior to January 1992
is calculated from Industrial Production Index with base 2010=100 sourced from the
International Monetary Fund.
Economic growth is projected to decline but remain solid, backed by strong job creation and a
fiscal stimulus. Trade-related uncertainties and moderating world demand will weigh on
exports. Private consumption will accelerate due to strong wage growth and fiscal measures
that increase household disposable income. Low interest rates, high capacity utilisation and
growing housing demand will support residential and business investment. The current account
surplus will fall as stronger domestic demand fuels imports.

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Doing Business in Germany

Strong cyclical revenue growth will keep the fiscal balance in surplus. Fiscal space should be
used to increase spending on education, high-speed broadband and low-emission transport
infrastructure, which would strengthen productivity growth and inclusiveness. Tax reductions
for low-wage and second earners along with higher environmental and real estate taxes would
promote greener and more inclusive growth. Strengthening lifelong learning would help
workers cope with technological changes and prepare for the future of work.
Economic growth is driven increasingly by domestic demand
Strong export growth came to a halt in 2018, on the back of uncertainties about trade policies.
Moreover, new emission tests caused delays in car production. However, business confidence
and the appetite for investment are still strong due to high capacity utilisation and low credit
costs. Immigration, rising household incomes and low interest rates have boosted housing
demand and construction. House prices have risen markedly, especially in urban areas where
the supply of buildable land is scarce and inflexible. As a result, access to affordable housing
is increasingly difficult for lower and middle-income households in booming cities. While
national aggregate house prices are still low by historical standards, residential property is
starting to look overpriced in some booming urban areas. Mortgage
Germany

Business sentiment is still strong House prices are still moderate relative
to income¹
Ifo business climate index, Average since 1980 = 100
Seasonally adjusted
Index 2015 = 100
115 115 112
Ifo business climate 110
Assessment of business situation 106
110 Business expectations 110
100 100

105 105
94
90
88
100 100

82
80
95 95
76

90 90 70 70
2013 2014 2015 2016 2017 2018 1993 1998 2003 2008 2013

lending has only grown in line with income, and household indebtedness, which is moderate
relative to other countries, has been stable.
Vigorous employment gains have pushed the unemployment rate to a record low, while
the number of vacant jobs has continued to rise, in particular in long-term care and
construction. The strong labour market has resulted in a broad-based wage growth,
which supports private consumption. Job quality has also improved as the number of
full-time permanent contracts has grown strongly. Headline inflation has picked up
recently on the back of higher energy prices, but the core inflation rate remains modest.

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Doing Business in Germany

Fiscal policies should aim to improve productivity growth and

inclusiveness

Fiscal policy is supporting the expansion. Child tax allowances and benefits are
increasing along with pensions for mothers, while social contributions will be lower, in
particular for low-paid jobs. The government plans to invest 37.9 billion euros per year
from 2019 in infrastructure, education, housing and digital technology. A fund of 2.4
billion euros was set up to expand high-speed broadband and support municipalities’
investment in digital infrastructure in schools. Such discretionary tax cuts and spending
increases will reduce the government budget balance in 2019 and 2020.
Most of these fiscal measures are appropriate, as they promote long-run growth and
inclusiveness. However, subsidies for families who want to buy homes are likely to further

Germany

The labour market is Wage and price inflation are

tight Seasonally and projected to rise
working−day adjusted Seasonally adjusted
% of labour force % of total employment
9 1.9
← Unemployment rate ¹
8 1.7
Job vacancy rate ² →

7 1.5

6 1.3

5 1.1

4 0.9

3 0.7

2 0.5
2010 2011 2012 2013 2014 2015 2016 2017 2018

1. Population aged 15-74 years. Based on the German labour force survey.
2. Percentage of unfilled job vacancies relative to total employment.
3. Average nominal wage per employee.
4. Harmonised consumer price index (HICP). Core HICP excludes energy, food, alcohol and
tobacco. Projection from 2018Q4 for HICP and core HICP.
fuel an already booming housing market, which suffers from labour shortages and
insufficient flexibility of supply. This would further complicate access to affordable
housing for lower-income households. It would be preferable to concentrate on further
investment in education and infrastructure that contributes to productivity growth and
inclusiveness. Providing more opportunities for young children from disadvantaged
socio-economic backgrounds to enrol in high-quality childcare and increasing places in
full-day primary schooling will improve human capital in the long term, while making

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it easier to reconcile family life and longer working hours, especially for women. The
government has committed to introduce a legal guarantee of full-day primary schooling
by 2025. Financial support for municipalities’ investment in physical and digital
infrastructure needs to be coupled with simpler procedures to draw on the funds and
technical support from federal or regional governments to plan and manage
infrastructure projects.

Economic growth will remain solid:

Economic growth will decline due to slower growth of external demand and higher
uncertainty. It will, however, remain solid, supported by strong private consumption and
expansionary fiscal policy. Capacity constraints and labour shortages will constrain
production, especially in the construction sector, increasing wage and price inflation.
Strong domestic demand will continue to contribute to dynamic import growth and
thereby narrow somewhat the large current account surplus. A further rise in
protectionism would weigh on economic growth and employment, particularly if it
involved slower growth in China or tariffs on Germany’s car exports. Renewed financial
market turbulence and economic shocks in large European economies would also reduce
exports. On the other hand, successful integration of immigrants into the labour market,
improved education and training, and an increase in women’s working hours as a result
of recent reform efforts can alleviate labour shortages and allow companies to expand
production.

GERMANY: Business Practices

Business culture:

The Fundamental Principles of Business Culture:

German business culture is marked by organisation, planning and perfectionism. Business

relations are very formal, and they reflect the German values of order, privacy and punctuality.
A strict vertical hierarchy is established and respected, and the decision-making process is held
at the top of the company. The Germans respect authority and subordinates rarely contradict or
criticise their superiors publicly.
Germans do not need a personal relationship in order to do business and work and personal
lives are rigidly divided. To build and maintain business relationships, it is essential to follow
the established protocol and respect the formality of the communication style. Business lunches
will be organised later in the relationship, and will be great opportunities to establish a closer
relationship.
First Contact:
Being introduced by a third party can be an asset. You should use a bank, a German
representative or the Industrie und Handelskammer (Chamber of Industry and Commerce)
when possible. It is recommended to get in touch by telephone first in order to identify the right

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Doing Business in Germany

contact, and then to confirm our interest by e-mail, to call back and to arrange a meeting.
Appointments are usually set from 10am to 4pm; lunch-time (1pm - 3pm) and Friday
afternoons should be avoided.
Time Management:
Punctuality is extremely important, and arriving at a meeting 15 minutes early is well thought
of. In case of any delay, it is imperative to inform your interlocutors in advance. Meetings
adhere to strict agendas, including starting and ending times.
Greetings and Titles:
When meeting someone for the first time, give a short and firm handshake and maintain eye
contact, but avoid staring for uncomfortably long periods. An acceptable distance should be
kept. You should address your interlocutors by their surname preceded by “Mr” or “Mrs”, or
eventually by a title (“Dr” for example). University titles are important for Germans.
Gift Policy:
Gifts are normally not exchanged at business meetings, but small gifts may be appropriate at
the successful conclusion of negotiations.
Dress Code:
German business dress code is conservative understated and formal. Men should wear a suit
and tie; while women should wear a suit.
Business Cards:
Business cards are exchanged quite soon after the beginning of a meeting. They should be in
English and, unless you have already set up in Germany, it is not necessarily to have them
translated into German. You should include any higher degree or honours with your name.
Meetings Management:
As Germans are very focused on efficiency, meetings may only be scheduled for half an hour
and only then if it is clear what the purpose of the meeting will be. This requires a very clear
and focused approach, in which you show that you have found out already something about the
company and its challenges. Slogans are disregarded, proof is important.

On the whole though, Germans could be described as 'pre-planners' who like to attend meetings
having done a considerable amount of preparation in order to help them debate their point of
view with conviction. Some people charge that German's have always made up their minds on
an issue before arriving at a meeting but this is not necessarily the case. They just want to argue
their view point thoroughly and support it with well-researched data.

Germans place a high priority on academic and technical education and business houses value
the same. Mostly, companies are run by technocrats rather than lawyers and accountants.
Meetings are often large with a designated specialist from each area involved in the matter
under discussion. People are expected to contribute to the debate when discussions touch their
area of expertise but are not necessarily expected to have an opinion on everything.
During initial meetings (that do not last more than one hour), Germans usually prefer to get
down to business and only engage in the briefest of small talk.

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Doing Business in Germany

It is imperative to be well prepared and to have solid arguments because Germans often expect
informative and well-documented answers to their questions. The opinion experts invited to
attend the meeting will be the determining factor. Your presentation should be specific and
backed up by facts, figures, tables and charts. Germans usually prepare cautious plans including
fall-back and contingency measures, in order to avoid the unexpected. Many documents will
be produced to elaborate and confirm discussions.
As meetings tend to be serious and formal, you should avoid any form of irony and should not
interrupt the participants. Germans are direct to the point of bluntness. It is important to
maintain direct eye contact while speaking and to avoid confrontational behaviour or high-
pressure tactics. It is better to remain silent if the floor has not been given to you or if you are
not prepared to make an informed contribution.
The business lunch culture is less widespread in Germany than in other European countries.
Business lunches will be organised later on in the relationship, and will be an opportunity to
go beyond purely professional issues. If your partner buys lunch, you should invite him/her to
come to your country, where it will be your turn to take him/her out.
Opening Hours
Opening Hours and Days
Saturday and Sunday are not working days. On Friday afternoons, companies often close about
3-4 p.m.
Business etiquette in Germany:

 Germans do not think a personal relationship is needed to do business.

 They will check your academic credentials and the life span of your company.
 Germans respect authority, so acquaint them with your seniority level.
 Germans do not encourage an open-door policy- please knock before entering a
meeting.
 German prefer formal communication.
 Follow the protocol is to build and maintain business relationships.
 Germans take hyperbole, big promises with a pinch of salt.
 Germans are direct and can be even blunt

In many respects, Germans can be considered the masters of planning. This is a culture that
prizes forward thinking and knowing what they will be doing at a specific time on a specific
day. The German thought process is extremely thorough, with each aspect of a project being
examined in great detail. Careful planning, in one’s business and personal life, provides a sense
of security.

Background of German customers:

The German population comprises 91.5% ethnic Germans, 2.4% Turkish, 6.1% others mainly
of Greek, Italian, Polish, Russian, Serbo-Croatian and Spanish origin.
The official language of Germany is German and the main religions followed are as follows:

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Doing Business in Germany

1. Protestant 34%
2. Roman Catholic 34%
3. Muslim 3.7%
4. Other 28.3%
Up to the 20th century Germany consisted of various independent kingdoms, duchies and city
states. As these were relatively small and heavily dependent on each other, this has created a
culture in which modesty and the pursuit of agreement are important values. The protestant
beliefs, mainly practiced in the north, have only added to this.

Implications on the sales process:

This means also that the sales process can be longer than normal, with more contact points, and
personal sales is still valued very much. It also means that once they have chosen for a specific
brand, Germans won't switch so easily, although this will be less with the younger generations.

A website providing extensive information, a well-trained call-center and a good guarantee

policy is important. Also pay attention to online reviews and -if applicable in your sector-
articles written by journalists about your products.

E-commerce in Germany: selling online to the Germans:

Germany is also one of the leading European markets for e-commerce cross-border trade, and
their already established delivery infrastructure is another huge benefit to retailers looking to
reach the country’s 58 million online shoppers.

Many business opportunities in E-commerce:

The fact that over 50% of these shoppers are already purchasing from international sites, again
reiterates the opportunity Germany provides. Click and collect stations are becoming more
popular due to customer service convenience but the click and collect concept is yet to be
adopted by German shoppers.
As of 2014, twenty-eight German companies have made it to the Top 100 European E-
Commerce Companies. Zalando is one of the successful local brands that launched a mobile
first strategy in 2015 and has captured 15 international markets across the globe, owing to its
prowess in the areas of Technology, Marketing, Fashion and Logistics.

Digital point-of-sale strategies:

Consumers are becoming increasingly demanding. They are exercising a stronger will in
purchase decisions regarding purchase points, shopping behaviour and frequency. Thus, it is
very important to combine different sales and marketing channels to be able to cater to a wider
clientele. This variety is however lacking in the German market place.

“Click and Collect” combines offline and online shopping. This approach in shopping has
entered the in home furnishing markets. Click and collect stations are becoming more popular
due to customer service convenience but the click and collect concept is yet to be adopted by
German shoppers.

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Doing Business in Germany

Mature and affluent consumer trend:

The group that has the highest purchasing power in Germany is the 55 years and above
category. Though the younger generation always appears to be more online savvy, it is the
older group that is is catching the eye of local retail players. Even the 65 plus age group is fast
catching up to adopt online shopping habits in Germany. German consumers are using their
mobile phones to compare prices even when shopping in a store.

Growing demand for flexible logistic solutions:

Parcel service providers are now facing a challenge in order to meet the changing demands of
the German consumer. Hence, they have begun offering free deliveries, same-day deliveries,
pre-booked delivery time frames and eco-friendly delivery models. This industry presents
business opportunities due to its competitiveness.

E-payment systems on the rise:

The inclination to pay online is a growing one in Germany though they are traditionally known
as being averse at taking risks. However, online payments for expensive commodities will only
gain popularity once return and refund methods are introduced into the German market.

International B2B opportunities:

Selling to businesses in Germany:
Germany is home to tens of thousands of businesses ranging from small sole proprietorships
to large conglomerates. In fact, a large part of the reason for the prominence of Germany’s
economy on the world stage can be linked to the small and medium sized businesses (SMEs)
of the Mittelstand. So be prepared for smaller and mid-sized companies with a family member
as the director and a long-term vision.

Structure of German businesses:

Most German companies empower a few senior managers. Larger companies (AG & GmbH)
are governed by a Supervisory Board (Aufsichtsrat) which chooses the Management Board
(Vorstand). The management board however is the final decision-maker on matters affecting
day to day management.
Work and personal lives are rigidly divided, and Germans subscribe to the ideal that there is a
proper time and place for every activity. Talking about personal subjects and politics should be
avoided, and the focus should be on work-related things, even in the limited small-talk.

Germany - Infrastructure, power, and communications:

Germany has one of the world's most developed transportation and communication
infrastructures. Intensive investment since reunification in 1990 has brought the undeveloped
eastern Germany in line with that of western Germany. Transport and communications utilities
in Germany have been liberalized following EU requirements. A dense and efficient network
of motorways, railways, and waterways connects the country with major centers and the world

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Doing Business in Germany

Germany’s Air transport:

Germany's flagship air carrier, Lufthansa, is among the world leaders in the airline industry.
According to EU requirements, Lufthansa is majority owned by EU governments, while the
German government has relinquished its holding in it, and the state of Bavaria has reduced its
stake in the company. Since the liberalization of air transportation in the European Union in
1997, Lufthansa has fought to retain its dominant position on Germany's internal routes. In
1998 a total of 127 million passengers were carried by commercial air services in Germany.
There are 320 airports, including 14 with runways over 3,047 meters (1.89 miles), with 673,300
aircraft departures registered in 1998. The busiest airport, in terms of aircraft movements,
passenger departures, and freight traffic is the Rhein-Main airport outside Frankfurt am Main.
Munich is the second busiest in terms of passenger traffic and Cologne-Bonn is the second
busiest in terms of freight traffic. The other major passenger airports are Berlin-Tegel,
Dusseldorf, and Hamburg. The federal government and cities such as Berlin and Cologne are
preparing to sell their shares in major airports.
Germany’s Marine Transport:
Marine transport is also developed, with major ports on the Baltic Sea, including Kiel, Rostock,
and Luebeck, and on the North Sea, including Emden, Hamburg, Bremen, and Bremerhaven.
Major rivers ports are at Duisburg, Cologne, Bonn, Mannheim, and Karlsruhe on the Rhine;
Magdeburg and Dresden on the Elbe; and Kiel on the Kiel Canal which provides an important
connection between the Baltic and North Sea. The most important port for Germany, however,
is Rotterdam in the Netherlands. Hamburg is by far the largest port city in Germany, accounting
for about 33 percent of all the freight. In 1998 the merchant fleet totaled 8.01 million gross
registered tons, and freight traffic shipped through German ports that year totaled 210 million
tons. Historically, industrial centers have grown closer to ports due to the supply of cheaper
raw materials and coal. In recent decades, refinery and chemical industries have gravitated
towards the 1,550 miles-long network of oil pipelines. Fuel transport by pipeline in Germany
rose from 74.1 million tons in 1990 to 90.7 million tons in 1998.
Energy Supply System:
The country imports most of its energy sources, including almost all of its oil. In the 1970s and
1980s it worked to reduce its dependence on imported oil by developing nuclear power and
encouraging energy efficiency. In the 1990s, environmental considerations, including global
warming, became a serious concern, and in 2000 a program of gradual withdrawal from nuclear
power was agreed on by the SPD-Green government and electricity producers. In early 2001,
a shipment of nuclear waste from France to Germany sparked massive environmental protests
in the country, causing many injuries and hundreds of arrests. A total of 19 nuclear plants
accounted for about 40 percent of Germany's electricity consumption in 2000. In 1998 the
country produced 525.356 billion kilowatt hours of electricity and fossil fuel (coal-lignite, coal-
anthracite, and natural gas) accounted for the largest portion while hydroelectricity contributed
only 3.2 percent. Like all other industrialized economies, Germany has become increasingly
cautious about energy consumption.

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Doing Business in Germany

Electric sector:
Prior to 1997 the electric sector was divided into 9 regional monopolies, with exclusive rights
over transmission facilities within their areas. At the local level, there were hundreds of
municipally controlled power distributors. City and state governments had direct financial
interests in the electric sector through concession agreements and in many cases ownership of
local and regional distribution organizations. Between the regional monopolies and the local
distributors were about 70 middle-level distributors of electricity. Although electricity prices
in Germany used to be among the highest in the European Union, they fell dramatically after
the Electricity Supply Law entered into force in 1997. This law implemented the EU power
market liberalization directive and went beyond its requirements to create a thorough electric
market liberalization in western Germany. By 1999 electricity tariffs for large users fell by up
to 30 percent. The local and regional monopolies were broken by permitting third-party access
for both commercial and residential customers. In addition, national utilities were allowed to
buy from competing power producers, and electricity purchasing pools were created. The
industry has undergone deep and rapid restructuring as large regional power generators have
merged and sought the integration of production and distribution by purchasing some of 900
local power distributors. The federal government participates, often as a minority shareholder,
in local energy utilities and is represented on the boards of supervisory authorities.
Telecommunication Sector:
Germany is among the world's leaders in telecommunications, served by a modern telephone
system and 46.5 million main lines connected by fiber-optic cable, coaxial cable, microwave
radio relay, and a domestic satellite system. The state-owned giant, Deutsche Telekom (DT),
one of the leaders of the European and global telecommunications sector, became a joint-stock
company in 1989, but it was not until January 1998 that it ended its monopoly in fixed lines
under EU law. DT was also partially privatized: 28 percent of the company was sold in the
financial markets in 1996, 25 percent was sold in 2000, and the remaining shares owned by the
German government were scheduled for future sale. Liberalization brought a variety of new
service providers with varying prices for services. In the first year after liberalization, DT lost
30 percent of its peak-time long-distance-call business and introduced price cuts of 60 percent
in January 1999. Competition from the nearly 200 new telecommunications companies and
about 1,300 companies in non-licensed sectors has fueled arguments over network access
charges and rates. Growth in the areas of multimedia, mobile communications, and the Internet
has also been spectacular. Germany is one of the fastest growing markets for mobile phone
equipment, and Germans owned 15.318 million mobile phones in 1999. The government is
considering further investments into the area because it still compares poorly with the United
States by the ratio of personal computers and Internet hosts per 1,000 people.
Life Style of Germans:

Going to a new place always means adjusting and learning about that country and its culture.
It is helpful to prepare yourself before going abroad, for the new things you will encounter, by
consulting books, websites and forums as well as getting recommendations from friends that
have been there before. To gain a good personal experience of Germany, you have to submerge

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Doing Business in Germany

yourself in its culture, by getting to know and spending as much time as you can with Germans
around you, be it students or locals.

There is no shortage of student clubs and activities on and off campus, so if you are interested
in activities like e.g. hiking or chess or whatever in your home country, you can continue
pursuing the same interests and engage in the same activities and make new friends and learn
German in the process. You may have heard that the Germans are somewhat reserved in their
interactions with others, and there may be some truth to it, but mostly in the case of the elders
and dwellers of smaller towns. But in larger cities and places with a lot of young people, you’ll
find out that they are friendly and accepting of students from abroad.

Be sure to address the elderly with “Sie,” which is the formal “you” to show respect and call
your professors by their last name; you can of course call your colleagues and friends by their
first names and use “du” if you speak German. Germans value punctuality very much so be in
time.

The best part: there are universities in both large cities or quaint towns – whatever suits your
personality and needs. Whether you enjoy going out a lot and partying, or have a more chilled
lifestyle you’ll have options.

Cost of living in Germany depends on the place you will be studying at and your lifestyle, but
generally the basic expenses (such as accommodation, study materials, transportation, food
etc.) is close to the European Union average – around €750 a month. Getting a student card is
recommended since you will get discounts at museums, theatres, cinema, public swimming
pools and many other places so make sure you make the most of your student status as much
as you can.

You can work part-time and earn extra money on the side to support your lifestyle while
studying. If you are a national of an EU member country or a national of Iceland, Norway and
Switzerland, then you have unlimited access to the job market, just as Germans. Beware that if
you work more than 20 hours during a week you will have to pay into social security.

If you come from a country not mentioned above, you only have the right to work for 90 full
days or 180 half-days a year and if you wish to work more than that, you need to get a work
permit. Internships are regarded as work hours too – even the unpaid ones – so please be
mindful not to work more than you are allowed to, so you don’t risk trouble with the authorities
or worse still – get expelled from Germany. Labour laws are very strict in Germany, so make
sure to respect them.

According to German law everybody studying in a state-recognized college or university has

to have health insurance to qualify for enrollment, thus one of the prerequisites to getting
admitted into a university is to have proper health insurance.

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Doing Business in Germany

Make sure you submit an insurance certificate (called “Kranken versicher ungnachweis” in
German) at the admissions office before the beginning of your term. Guest researchers, students
in language courses as well as students over 30 years old need to get insured from private
companies. The health insurance plans MAWISTA Student and MAWISTA Science are
specially customized for international students, language students (e.g. in preparation of a
language test), guest scientists, scholarship holders and internship students in Germany.

On average, Germans work 35 hours per week, but those 35 hours are all very focused on being
productive. Not only that, but Germans get a minimum of 20 days paid Urlaubstage (vacation
days) per year, with many employees getting between 25 and 30 days. The work culture that’s
common in Silicon Valley, with crazy hours and never being disconnected from the office, is
just not something that’s highly valued in the German way of life. Germans value a healthy
work-life balance, and when they’re out the door for the weekend, it really is the weekend.

Social System of Germany:

Upper Class:

This was the top most social class in the German social hierarchy. They enjoyed utmost power,
control and authority in the society. This class was the most influential one in the hierarchy.
These were the wealthiest one too. These were politically active people who were socially
symbol of high status and elegance. The lower classes usually worked for & under these people.
The manual work was kind of prohibited for these elite groups of people since their time was

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so valuable. Their simple, inartistic work was performed by lower level people. In some areas
they were also referred to as Aristocrats. This was the elite group that consisted:

 Royal families

 Scholars

 Administrators

 Other wealthy people

Middle Class:

The middle class was normally the mainly contested of all of the three cataloging in the German
social hierarchy. The reason was simple. There was actually a wide group of people in the
German society who socio-economically fell between the upper and lower classes. This group
was also termed as ‘White Collar Workers’ in the later periods. This was mainly the working
class but of higher ranks. They used to formulate that group of people who were doing high
rank jobs in the society. They did have powers, influence and control over the society but in a
limited array of options. The lower class usually used to work under their supervision while
these people used to mostly report to the elite upper class people.

Lower Class:

The poor people used to fall in this category of the German social hierarchy. Well these were
people who used to do the lower level, manual, disrespectful work in the society that was not
considered artistic at all. This class was further divided into two parts depending on the
economical point of view along with the work done. The two sub categories are as follows:

 Working Class – The working class was placed superior to the Under Class. Those people
who used to lead the Under Class or pay them used to be incorporated in this group. Also
the skilled labors used to be involved in this category.

 Under Class – Well this was the class that remained at the bottom of the society. They
were provided with very little rights which in actual practice were negligible. The higher
classes never treated them properly. These people used to work on daily wages system and
lived a life of hand to mouth. In simple terms, these were the poorest people of the society
and hence most under-privileged.

Pakistan German Business Forum:

The Pakistan German Business Forum was founded in 1997. Since then it has been engaged in
becoming a central instrument for the promotion and expansion of bilateral economic relations
between Germany and Pakistan.With members across Pakistan from different business sectors,

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Doing Business in Germany

PGBF is one of the most established business forums in Pakistan.Pakistan German Business
Forum works in close cooperation with the German Embassy in Islamabad, the Consulate
General in Karachi and the Pakistan Embassy in Berlin, for the purpose of fulfillment of its
objectives.

D Watson Chemists:

Serving people in medicine from last 35 years. Now more things added in D.Watson stores for
our valued customers. We have Medicine department all kinds of medicines, Optician
department have all major brands Sunglasses, Frames and we also have state-of-the-art hearing
test center.

History:

Everyone needs cost-effective quality tools and materials they need to improve their health and
well-being and D. Watson has earned the reputation of being one the most respected and
dependable supplier of medical equipment in Pakistan today.

D. Watson Group is the supplier of home medical and health related products designed with
the needs of the user in mind. D. Watson Group was founded by its chairman, Mr. Zafar
Bakhtawari in 1975. We provide a wide variety of local and imported allopathic and
homeopathic medicines, drugs, cosmetics, herbal products, optical products, surgical supplies
and toiletries.

We are doing free hearing test for our valued customers. On 1st floor, Cosmetics department
containing all major brands cosmetics products for our valued female customers.

Products and services:

They also have branded perfumes, deodorants, shampoos. Watson company is playing a vital
role to provide complete & substantiate range of Local & Imported Allopathic & Homeopathic
Medicines, Drugs, Cosmetics, Herbal Products, Optical Products, Surgical supplies etc.

D. Watson offers a variety of key services including Pharmacy, Allopathic Medicines,

Vitamins & Health Supplements, Family Planning, Sexual Well-being Products, Perfumes,
Medical Store, Medicines Retailer, Eye Clinic & Optical, Optometrist Consultants, First Aid,
Plaster & Painkillers Tablets, Antibiotics, Orthopedic, Herbal Products, Beauty Products, Baby
Care Products, Toiletries, Electrical Items and Pet Products.

We also have branded perfumes, deodorants, shampoos, tooth pastes, and pampers, feeding
bottles and many more. Last but not least, on 2nd floor now we have branded shoes & bags for
ladies.

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Doing Business in Germany

Mission:

Our mission is to supply cheaper products to everybody who has access to the internet. Through
harnessing the power of the internet and supplying you directly, this website will save up to
50% off the cost of many well-known products found in your local chemist. Watson Group
mission is to supply cheaper products to everybody who has access to the internet.

D Watson Chemists and General Store in Germany:

The Main Question of our study is why Germany is Suitable for D. Watson chemists to go
global.

A pharmacy in Germany is called an Apotheke. Apotheken are easily identified by a large, red
A on the outside of their locations. There are thousands of Apotheken in Germany and German
law requires that an Apotheke be owned and operated by a pharmacist. An individual
pharmacist is only allowed to own up to three locations. Consequently, there are not any large
drugstore chains that are found throughout countries like the USA. In fact, a “drug store” in
Germany (Drogerie) sells toiletries and other consumer items, but not medicines.

All medications, including non-prescription drugs, are kept on shelves behind the counter or in
large drawers behind the counter or in a back room. There is normally a selection of different
types of non-medicinal health related products in the pharmacy. Included in that selection you
could expect homeopathic products. Pharmacists are highly trained and will always ask if you
understand the dosages regarding prescriptions. They can also offer advice on non-prescription
medicines, ointments and other products that you can use to treat minor ailments. Most drugs
are in packs that come in three different sizes – N1, N2 and N3. (Small, medium and large)
The actual number of pills packaged depends on the medication itself. There is always a paper
in the packaging that explains in detail what the medicine is designed to treat, recommended
dosages, contra-indications and other important information.

Law Enforcement and Availability:

The law on prescriptions is very strict. Many medicines that you may be able to buy over the
counter in your own country, such as antibiotics, must be prescribed by a doctor in Germany.
However, some painkillers, such as headache tablets, are available at pharmacies without a
prescription. As previously described that Germany has directed toward Foreign direct
investment and encouraged it so it’s the first reason. Most Europeans have convenient access
to drugs (the kinds prescribed by doctors, at least) around the clock, and can order online. Not
so the Germans. They not only have to purchase medicine in person but also face restricted
opening times, and cartel-inflated prices on top. This is because Germany’s pharmacists have
successfully lobbied their regulators to shield themselves from modernization, and thus
competition. So this is an opportunity for D.Watson to provide their services to germans.

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Doing Business in Germany

Population:

In Germany, the population in some regions, especially the former Communist East Germany,
is undergoing a current decline and depopulation. ... In 2017 28.0% of the population of
Germany was over 60 years old, and it is projected to increase to 37.6% by the year 2050.

According to aarpinternational.org, Germany is currently one of five “super-aged” societies in

the world, and its population of those age 65 and older will continue to grow, reaching nearly
one-third of the total population by 2050.

Governmental Health Expenditures:

The Federal Republic of Germany has one of the most expensive health care systems in the
world. The expenditure on health in 2010 amounted to EUR 287.3 billion or EUR 3,510 per
capita, representing approximately 11.6% of the gross domestic product, with the vast majority
(57.6%) borne by statutory health insurance. A major cost factor (EUR 40.9 billion in 2010 or
14.2% of the total healthcare costs in 2010 ) is expenditure on pharmaceutical products.
Consequently, the German Government has taken regulatory action and presented a number of
healthcare reforms, aiming – at least partly – at containing the cost of pharmaceutical products.
Most prominently, the “GKV-Modernisierungsgesetz” (Modernization Act for the Statutory
Health Insurance System, GMG 2004) and the “Arzneimittelmarkt-Neuordnungsgesetz” (Law
on the Reorganization of the Pharmaceutical Market, AMNOG 2011) were introduced to
increase (inter alia) competition among public pharmacies.In a bid to attract foreign
investment, the German Government has made it a mandatory rule as to not to discriminate
between the local investors and foreign investors. Foreign investors can all avail all the benefits
granted to local investors.

Corruption Level:

The corruption levels in the country is extremely low, this greatly augments the interest of
foreign investors.Transparency International's 2017 Corruption Perception Index ranks the
country 12th place out of 180 countries.

Taxation Policy:

Another significant advantage of investing in Germany is that the taxation policy of Germany
is liberal and highly competitive. This gives the country an edge over other countries in the EU
for foreign investment.

Geography:

The country’s strategic geographic location of Germany, it is situated in the center of European
continent provides foreign investors to easy access to the rest of European Union.

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Doing Business in Germany

Conclusion:

In this project we had briefly talk about the Germany history its geography its legal and social
position. We have studied about the culture of the Germany, their population their social
patterns etc. we had discussed about the economy of the Germany and their economic growth
is declined due to slower growth of external demand and higher uncertainty. What are the
business practices that are followed in the culture of Germany and how they are adopt by
people? We had choosen a pharmacy company of Pakistan that is D Watson Chemist because
there is more need of pharmacies in Germany.

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