Capital: Berlin
Largest city: Berlin
Official Language: German
Government: Federal Parliamentary Republic
Area: 357,022 km2
Population: 83,166,711
Currency: Euro (EUR)
GDP total: EUR3.905 trillion (USD4.743 trillion)
GDP per capita: EUR46,893.19 (USD56,956)
Time zone: UTC +1/UTC+2
Calling code: +49
Internet TLD: .de

[Source: Wikipedia]

Total Foreign Investment in Germany
2018:  USD934 billion  (EUR765.8 billion)
2019: USD953 billion (EUR781.5 billion) with the top 3 foreign investors being the Netherlands, Luxembourg and United States

[Source: UNCTAD’s 2020 World Investment Report]

3 largest trading partners: United States, France and China
Top 3 exports: Machinery, vehicles and mineral fuels


Q&A on Foreign Investment
  1. Are there any foreign investment laws in Germany?
    Germany is a free market economy, which significantly benefits from its exports to the open markets of other countries, and therefore, does not have a general foreign investment law to inhibit imports or foreign direct investments (FDI). There are specific regulations in the Foreign Trade and Payments Act (Außenwirtschaftsgesetz), which set out the legal requirements for foreign trade investment in Germany.
  2. Is there a governing or regulatory body responsible for overseeing foreign investment in Germany?
    The German National Contact Point (NCP) for the new EU-wide cooperation mechanism on FDI is the Federal Ministry of Economics and Technology, also known as the Bundesministerium für Wirtschaft und Technologie (BMWi). The BMWi screens FDI and also considers aspects of national security and critical infrastructure. In 2019, Germany recorded more than 2,200 foreign investment projects of which 146 cases were screened by BMWi. Of those screened, less than 10 decisions by BMWi were rejections of proposed FDI projects, and according to the Germany Trade and Invest (GTAI) the investment amount equated to EUR5.1 billion.
    GTAI, as the central foreign trade agency of the Federal Republic of Germany, is in charge of, among other things, attracting FDI and providing advisory services to both foreign and domestic companies.
    In principle, there are no other administrative controls specifically for foreign investment in Germany nor any special key laws or regulatory bodies that govern FDI.
  3. What restrictions exist in Germany on foreign investment?
    In general, foreign investment is welcome in all areas within the framework of the applicable law. In most cases, foreign investors can acquire shares in German companies without restriction.
    Investment screening only covers acquisition transactions through which the investor directly or indirectly acquires control over at least 10% or 25% of the voting rights in a German company. Minimum amounts – in relation to the purchase price, turnover, the number of employees or other requirements are not provided for – in contrast to some investment audit regimes in other EU member states.
    A notification requirement has been introduced for company acquisitions and for critical infrastructure. There is a list of economic sectors in which acquisitions are subject to approval.
    This approach is consistent with the EU Screening Regulation (EU) 2019/452. There are three areas of screening:

    • Sector-specific screening
      This covers acquisition transactions whereby a non-EU person directly or indirectly acquires control of at least 25% of the voting rights in a domestic company. If the domestic company belongs to a particularly security-relevant sector, the threshold is 10 percent of the voting rights. Acquisitions that are subject to the sector-specific review must be reported to and approved by the BMWi. They are ineffective until they are cleared, and fines may also be imposed on the parties involved if not approved first.
    • Cross-sectoral screening, in accordance with public order or public security in sensitive areas
      This covers all acquisition transactions by which a foreigner (also from other EU member states) directly or indirectly acquires control over at least 10% of the voting rights in a domestic enterprise that manufactures the goods legally established in Germany; predominantly this applies to certain military equipment.
    • Screening of critical infrastructures in the broader sense
      There is a notification obligation for the acquisition of critical infrastructures in the broader sense. Accordingly, the BMWi must be notified in writing of the conclusion of a contract under the law of obligations on the acquisition of a shareholding of 10% or more or the assets of a domestic enterprise that is active in certain legally established areas.
  4. Can foreign investors acquire real estate/property/land in Germany?
    The nationality of the purchaser of a property in Germany is irrelevant for the purchase of real estate.
  5. Which industries do these restrictions apply to (if any)?
    There is increased “control” over critical infrastructure (including water, energy, transport, communications, media, finance), critical inputs (including energy and raw materials), critical technologies, sensitive information (including personal data), media freedom and pluralism.
  6. Are there any sanctions or restrictions on foreign investors from certain countries?
    European law provides that in the EU restrictions on the movement of capital are in principle also prohibited in respect of non-EU countries. An exception is made for “indispensable measures… justified on grounds of public policy or public security”.
    Despite the existence of the EU Directive (EU 2019/452) on screening for investments from third countries, the principle of non-discrimination must be respected.
    Economic embargoes are in place against some countries, which focus primarily on military actions, e.g. Belarus, Sudan, Russia, Iran, Iraq, and Armenia.
  7. Are any governmental approvals required for foreign investment in Germany?
    There is no governmental approval required for FDI.
  8. What are the common types of foreign investment in Germany?
    Key sectors include consumer goods (Germany has the highest population in Europe), advanced materials, aerospace, agriculture, automotive, pharmaceuticals and chemicals, wholesale and retail, online retail. Offering high potential are sectors such as consumer services, high-tech, multimedia, electronics, health and biotechnologies, renewable.
  9. What are the common business entities open to foreign investors?
    The following business entities are open to foreign investors:

    • Limited liability company (GmbH):
      It is the most popular form of business in Germany. It is possible for a GmbH to be incorporated by a single individual (1-person GmbH), however, there must be a share capital of at least EUR25,000.
    • Public limited company (AG):
      Compared to a GmbH, a public limited company can raise capital more quickly (e.g. through an initial public offering or short-term capital increase). A share capital of EUR50,000 must be introduced, which increases trust towards business partners.
  10. Are there any tax advantages for foreign investment in Germany?
    Germany has about 90 Double Taxation Treaties with other countries.
    Travellers who have their place of residence in a non-EU member state and do not hold a residence permit can make purchases in Germany free of VAT.
  11. Are there any incentives for foreign investors in Germany?
    Germany has indirect funds to channel money flows into designated regions or economic and innovation sectors. The funding is also available to foreign investors as long as they meet certain requirements. Measures led by the German government include:

    • Grants for investment (Incentive Regulation Programme)
    • Grants for research and development (R&D) for various research categories (basic, industrial research, experimental development Environmental Innovation Programme)
    • Grants for the recruitment of personnel (focusing on recruitment subsidies, training subsidies, wage subsidies and training on the job)
    • Public loans: offered by various Public Development Banks at both Federal (KfW Bankengruppe) and State level, European Investment Bank (EIB)
    • Public guarantees: Guarantees up to the amount of EUR1.25 million are issued by the guarantee banks of the States, above EUR1.25 million by the States or their state development institutions. From a guarantee volume of EUR10 million, Federal-State guarantees are possible in the eastern States.
  12. Are there any free trade zones in Germany which are attractive to Foreign Investors?
    Free zones in Germany serve only the foreign trade-related transhipment and storage of goods and do not exist for other purposes such as tax reductions only, etc. In principle, import duties are only levied when the goods enter the economic cycle of the internal market. In Germany, there are the following free trade zones:

    • Freihafen (Freeport) Bremerhaven
    • Freihafen von Cuxhaven
    • Freihafen von Deggendorf
    • Freihafen Duisburg
    • Speicherstadt, Hamburg
  13. Can foreign investors obtain work visas in Germany?
    EU citizens enjoy the freedom of movement of persons and services and therefore do not require a work permit.
    As a rule, foreigners need a residence title to enter and stay in Germany. They may only work in Germany if their residence permit allows them to do so by a work permit. There are the following residence titles:

    • Visa
      • Business trips max. three months: Schengen visa
        It is an important instrument of business and company-related mobility and suitable for a self-employed person working abroad who wants to enter Germany.
      • Stays of more than 180 days: national visa
        Before entering Germany, a visa must be applied for at the competent German mission abroad (embassy or consulate).

    The following residence titles can be considered for the purpose of gainful employment:

    • Residence permit:
      This is issued for a limited period of time for a specific purpose: education, employment, family, humanitarian, political reasons. The granting of a residence permit requires that the foreigner’s livelihood in Germany is secured, that the stay for another reason does not impair or endanger the interests of the Federal Republic.
      Companies and skilled workers from third countries have the possibility to shorten the entry procedure.
    • Settlement permit
      This is an unlimited residence title. The basic prerequisites are that a person has held a residence permit for five years, can secure his/her livelihood and has sufficient knowledge of German. The settlement permit can be granted to a self-employed foreigner with a residence permit. The settlement permit can be granted after only 3 years. The requirements for this are the successful realisation of a business activity and a sustainable livelihood.
    • Permit for permanent residence – EU:
      This is an unlimited residence title which foreigners from third countries receive after five years of legal residence in a member state of the European Union. This title includes the right to move on to another Member State and, like the settlement permit, offers third-country nationals extensive equality with German nationals, e.g. access to the labour market and social benefits.
    • ICT Card
      This is a temporary residence permit and enables employees of a company based outside the European Union to work internally for the same company in an EU country. The ICT card is issued in Germany to managers and specialists for the duration of the transfer or for a maximum of three years.
  14. Are there any foreign currency or exchange controls regulations in Germany relating to foreign investment?
    The Money Laundering Act (Geldwäschegesetz) serves to combat money laundering. According to this law, reporting, due diligence and documentation obligations exist for transactions of EUR10,000 or more.
    The bank must report payments of more than EUR15,000 to the tax office.
    Travellers entering or leaving EU countries and carrying cash of EUR10,000 or more must declare this amount to the customs offices.
  15. Can foreign investors invest in government projects? If so, are there any restrictions or penalties imposed on the withdrawal of such investments?
    Foreign investors are allowed to invest in government projects. There are no special regulations here in comparison to private projects.
  16. Are there any safeguards or investor protection frameworks in place in Germany for foreign investors?
    There are no unitary safeguards, but there are regulations:

    • at the global level (e.g. Energy Charter Treaty, ECT and Multilateral Investment Guarantee Agency, MIGA),
    • at the EU level (e.g. Anti-dumping and Anti-Trust measures),
    • national (e.g. antitrust law)
    • bilateral (e.g. investment protection agreements with more than 130 countries).
  17. Is Germany a signatory to any investment protection treaties with any countries?
    As an EU member, Germany participates in all trade agreements concluded by the EU (e.g. CETA, TTIP). Germany has concluded more than 130 investment protection treaties.
  18. Have there been any recent changes in law or developments for reform that may affect foreign investment in Germany?
    The Foreign Trade and Payments Act was adapted to the requirements of the European Screening Regulation.
    In the wake of the Blue Card Directive, there have been a number of legal simplifications to residence laws, e.g. abolition of the minimum investment amount of EUR250,000, facilitation of the requirements for entry and residence of third-country nationals for highly qualified activities have been facilitated (i.e. STEM professions and/or those with a minimum annual gross salary of EUR56,800).
  19. What tips are there for foreign investors to be aware of when dealing with foreign investment in Germany?
    The most important aspect is a good business case which is provided by good preparation in economic, financial, legal and tax planning.
    The choice of the location plays a major role when applying for funding. Different funding rates apply depending on the region – especially in the eastern States (former GDR), where these are higher.
    There is no uniform trade tax rate, it depends on the municipality. The lowest possible rate amounts to 22.83% (average: 29.9%).

Henning Von Zanthier
Founding Partner, Von Zanthier & Schulz

Following his legal studies in Germany and France, Henning von Zanthier obtained the LL.M. degree at Tulane University in the United States in 1989. In 1991, he was admitted to the Berlin bar and started working at a large international law firm. He founded the law firm “VON ZANTHIER & SCHULZ” in Berlin in 1992, with its focus on business law, tax law and bookkeeping.

In 1995, he established the first German linked law firm in Poznań, Poland. In 2003, he was the first member as a foreign lawyer at the Poznań Bar. He is the first non-Polish lawyer who has also been fully admitted to the chamber in Poznań. He lectured on Polish law at the Free University of Berlin between 2004 – 2007. He focuses on corporate law, commercial law and Polish renewable energy law. Henning von Zanthier was the chairman of the Polish-German Association of Legal Experts between 1993 and 1998.

He is one of the founders and was President of the League of Lawyers in 2014-2020 – an association of 20 medium-sized business law firms from Asia and Europe. He has authored a number of articles on German Business law. He regularly gives lectures on this subject for various institutions. He also lectured at the Adam Mickiewicz University in Poznań on the UN Convention on International Sales of Goods (CISG). His law firm has clients from China, Japan and India, who invest in Germany or Poland. He has been a member of LAWASIA since 2006 and was a constant speaker in the M&A subcommittee (2006-2015). Since 2016 he is the Chairman of the Asian-European Subcommittee within LAWASIA.


Name: Von Zanthier & Schulz
Address: Kurfürstendamm 217, 10719 Berlin Germany
Telephone: +49 30 88 03 59 0
Website address:
Key contact: Henning von Zanthier, Partner,
Established: 1992
Number of lawyers: 17
Languages: German, English, Polish, French

Brief description:
We are an interprofessionally organised law firm of solicitors, auditors and tax consultants with offices in Berlin, Poznań and Warsaw. We offer consultancy services in Germany in the field of German business and tax law and can assess your economic situation. Since 1992, we have been dealing with international matters and guiding you in national and cross-border law. In Poland, we can support you with Polish business and tax law.

Key practice areas:
Commercial law, Corporate law, Real Estate law, IT law, Labor law, Law on Renewable Energy, Medicine law, Tax law and Bookkeeping

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