Foreign investments in Germany

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Foreign investments in Germany

Germany’s doors are open to companies and individuals looking to invest capital there, with the Government focussed on boosting employment growth. The only practical limitation on doing so is a requirement to seek Government permission, in advance, for the sale of firms in the defence industry to overseas buyers.

It’s also possible, in certain circumstances, to the Government to deny permission for or delay the purchase of a German entity by a non-EU company. However, this would typically only happen if there was a risk of the purchase undermining law and order in Germany. All foreign investors are free from regulations on currency exchanges.

Foreign investors are treated similarly to German businesses in terms of being granted Government subsidies, licences to operate, and permissions for construction.

Finance

Investors seeking to secure funding should look first to the large commercial banks, both domestic and international, and major mortgage providers and insurers. All financial institutions operating globally have a presence in Germany, with activities centred around the commercial hub of Frankfurt. Each are subject to regulation by the Federal Financial Supervisory Authority. Frankfurt is also the location of the European Central Bank, the German central bank (Bundesbank), and much of Germany’s state-owned enterprise.

Forex legislation

Germany allows currency to be exchanged freely. Everyday exchange transactions are not subject to legislation and foreign investors are able to borrow, lend and return profits to other countries without limit. The ease of converting euros also makes Germany a more attractive proposittion for investors. The central bank simply requires companies to notify its regional branches of incoming and outgoing transactions in order to keep statistical tabs.

Economy

Strong GDP growth in recent months has boosted Germany’s appeal for foreign investors. Business confidence and investment is rising, while unemployment remains low.

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