Germany recently rose to second place on consultancy firm A.T. Kearney’s Foreign Direct Investment Confidence Index, and for good reason. The country is becoming increasingly enticing for foreign investors, attracting attention from businesses all over the world.
A.T. Kearney’s Index looks at changes in investors’ perception of the business climate in a host of different countries and regions, and demonstrates that Germany is now only behind United States in terms of foreign investor confidence. Here are three of the major reasons behind this growing popularity of investing in Germany.
Significant help for startups
One of the major reasons behind Germany’s rise is the help the country provides for startups. For example, the German government makes it easy for workers to acquire visas, allowing small businesses to attract the very best talent from across the globe. Many British entrepreneurs are flocking to Berlin to launch their businesses there instead of London. This practice has become so widespread that the English language is can be heard all over the city. This has had a knock-on effect on the translation industry and German translation now a near-essential in many industries.
In addition to this, the government have also recently announced a new state-owned fund that will provide startups with even more capital from 2018. There is also financial support on a regional level, too. In Hamburg, local government accelerator schemes have encouraged large companies to provide expertise and funding for startups in a number of different industries, including logistics, media and ecommerce. Between 2014 and 2016 an average of 253 people for every 10,000 economically active persons in the city started a business.
Berlin’s start up scene is also flourishing, again thanks to the help given to them through initiatives like Factory Berlin. Factory is a campus that stimulates startups by giving them a chance to use meeting rooms and exchange ideas with fellow startups, all while rubbing shoulders with some of the world’s leading tech companies. Renowned companies on the campus include Soundcloud and Uber. The city raised a cool €2.4 billion in venture capital funding in 2015.
Sustained economic stability
Germany is also becoming more attractive to foreign investors due to its flourishing economy.
The country’s GDP grew an impressive 0.8% in the third quarter of 2017, much faster than the 0.6% growth rate predicted.
Economic activity has been buoyed by a thriving jobs market and high corporate investment. This is despite political uncertainty in the country, and a stronger euro potentially undermining the price-competitiveness of German exports. Such a strong economic performance is also impressive in light of the performance of many European countries in comparison. For example, Britain’s GDP has slumped in recent times, with only a 0.4% rise in the third quarter of 2017.
Germany’s recent economic growth is a far cry from the country’s previous label as ‘a sick man’ of Europe in the 1990s and the early 2000s, with its economy struggling due to the cost of reunification. Since then, Germany has been bolstered by a series of momentous moves, such as becoming the the largest source of imports to eastern Europe, the leading source of machinery imports into India and the largest exporter of vehicles to China. Such factors have led to the prosperous economy that is attracting so many foreign investors today.
Germany’s attractive culture
Germany’s renowned culture is attractive to those wanting to do business in the country, with a number of enticing destinations putting the best of the country’s culture on show.. Berlin is fast becoming one of the coolest weekend destinations in Europe, with its quintessentially German food scene, its traditional beer festivals, and its vibrant art scene.
Another favoured destination is Munich, which features a wide range of castles and museums, as well as palaces, and like Berlin, traditional German beer. Other popular tourist hotspots include Hamburg, with its canals, art and buzzing nightlife, and Black Forest, with its spas and skiing.
In fact, the country is so popular that there is a longstanding boom in tourism, with the industry posting its seventh record year of growth in a row in 2016. The country had 80.8 million overnight stays by international visitors, an increase of 1.1 million over the previous year and a 1.4% growth in tourism from 2015. With Germany’s culture proving immensely popular, the significant help for startups and booming economy, it is no wonder that so many from the outside are wanting to invest in the country.