Germany imports and opportunities for export to Germany

Germany imports and opportunities for export to Germany

Germany export

Germany is home to a huge manufacturing sector. It is a market with numerous opportunities for companies all around the world. Out of the larger than 80 million populations, 73.9% live in the urban areas like Berlin, Munich, Frankfurt and Düsseldorf. This makes Germany one of the biggest and demanding markets in the world of goods and services.

 

What does Germany import?

Germany is a relatively open economy and has a broad spectrum of goods that it imports. German businesses add value to components and raw products. Germany usually imports in these commodities:

  • Machinery
  • Data processing equipment
  • Agricultural products
  • Foodstuffs
  • Metals
  • Vehicles
  • Chemicals
  • Oil and gas
  • Electric equipment
  • Pharmaceuticals

Export/import to Germany in numbers:

  • Petroleum Gas ($26B)
  • Crude Petroleum ($53B)
  • Cars ($47B)
  • Vehicle Parts ($38B)
  • Refined Petroleum ($31B)

For a more detailed drill down you can look here.

Main countries exporting to Germany:

  • Netherlands (10%)
  • China 98.9%)
  • France (7.5%)
  • United States (5.4%)
  • Italy (5.4%)

Although Europe in total accounts for 70% of the volume, Asia still contributes 20%. This means that if you have a product that has a cost or quality advantage over European products, it is certainly possible to do business in Germany.

What does Germany export? German imports and exports compared

Germany’s exports in 2015 were worth 1,410 billion dollars against the 1,130 billion dollars’ worth of imports. This gave Germany a trade surplus of 280 billion dollar. Germany is a leading exporter of machinery, vehicles, chemicals, and household equipment thanks to the hard work of its highly skilled labor force. To have this in numbers:

  • Machines ($382B)
  • Cars ($163B)
  • Vehicle Parts ($63B)
  • Planes & Helicopters, Spacecraft ($32B)
  • Packaged Medicaments ($52B)
  • Other chemical products ($130B)

Foreign direct investments in Germany

Despite the recent decline in foreign direct investment, Germany is still an attractive destination for international businesses. It is in the top 15 of the world’s FDI recipients. In 2015, sectors that invited most foreign investments were:

  • Financial mediation
  • Real estate, renting, and business activities
  • Transport, storage, and logistics
  • Trade and repairs

Importing goods in Germany: custom tariffs

Exporting products to or from Germany is not only subject to Germany’s own customs procedures, laws and guidelines, but also subject to the European Union regulations and guidelines. If you are importing from a non-EU state, then you will have to pay an additional 19% as a turnover tax, which 7% for fewer commodities.

Entering the market in Germany can be tricky due its customs regulations and the procedures at the bureaucratic level. Also, there are several restrictions on importing farm products after the European Union adopted Common Agricultural Policy.

The following transactions in Germany attract VAT:

  • The supply of goods or services made in Germany by a taxable person
  • The supply of goods or services made in Germany by a taxable person
  • Reverse-charge supplies, including supplies of services and supplies of goods with installation services
  • The self-supply of goods and services by a taxable person
  • The importation of goods from outside the EU, regardless of the status of the importer

What is the distribution structure in Germany?

The distribution structure in Germany is business to consumer. It comprises of suppliers, distributors and retailers. Hypermarkets are rare, and commodities usually reach target consumers through independent retailers. Although discount stores are growing increasingly as many big retail chains have entered the competition and now accounts up to 40% of food sales.

Hamburg, Frankfurt and Munich are the major airports of Germany however it has more than 40 minor airports. The Port of Hamburg is the largest and the busiest port of Germany. Whether your company is in a country with a coastline or not, it is easy to bring your products in the German market.

Germany: main facts and considerations for doing business

The German economy is the biggest of Europe and is very stable, with an affluent consumer base and a huge number of Small and Medium Enterprises (the 'Mittelstand'). This gives many selling opportunties. Also see our article Selling to the Germans.

If you want to enter the German market, the network of ports and airports makes transportation of commodities very easy. But be cautious and do a complete research and formulate a strategy before entering the market.

Where it comes to doing market research and approaching potential distributors or agents, you will get the best result if this is being done by a German, not by somebody from abroad. Our colleagues with typically German names like Hans Ulrich Reitzel and Matthias Hansen would be happy to help you.

Contact me to assist me in entering the German market!

 

This entry in Europe was updated on September 26, 2018 by specialist.