Investing in Germany
A bilingual Guide for Chinese Investments in Germany
Deloitte Germany has recently published an investment guide, which provides a comprehensive overview over the economic environment, M&A opportunities and regulatory aspects in Germany tailored for the information needs of Chinese investors. It is published bilingual - in English and Chinese languages and includes insights on certain industries that have in particular attracted Chinese investors in Germany in recent years such as automotive, life science and health care (LSHC) industry or the banking sector. We hope this guide can provide insights to Chinese investors in the process of the investment.
According to the 2020 annual FDI report by Germany Trade & Invest (GTAI), China has been the third biggest investor in Germany, following the USA and Switzerland. This shows the enormous importance of Chinese investments in Germany.
China was one of the strongest performing economies in 2020, with a GDP growth of 2.3% despite the COVID crisis. China's GDP growth is projected to reach 8.5 percent on a yearly basis in 2021, thanks to the pent-up demand and strong exports, according to the World Bank, which updated the economic forecasts in its regional economic report on June 29, 2021. During the global pandemic, China has come back to a growth path faster than any other major economy.
China is one of the largest global outbound investors. While cross-border M&A activity slowed drastically in 2020, domestic M&A activity remained strong. In the early stage of the outbreak of the global epidemic, M&A activities were almost suspended until the second half of 2020 ushered in a rebound. China’s outbound M&As in 1Q21 more than doubled from a year earlier and are likely to rise further in the rest of 2021, as recovering corporate earnings, strong investment appetite and China’s promotion of the “dual-circulation” strategy to secure critical technology will prompt Chinese investors to keep seeking overseas acquisitions, says Fitch Ratings on July 29, 2021. In past years, Chinese enterprises have made considerable investments in foreign manufacturing businesses, but a wide range of industries and regions will see interest from Chinese outbound investors, be it pharmaceutical businesses in Europe or energy in North America. While Germany has always been a major recipient of Chinese investments, this may be even more the case following Brexit coming into effect on January 1, 2021. Given that the investors will be more selective than in the past, and pay more attention to the economic system and situation in Germany, as well as insights into the company-, tax- and accounting-law, therefore we present you the bilingual guide-book which provides a comprehensive overview of the aforementioned aspects. We hope you find this publication useful and welcome the opportunity to discuss our insights and thoughts with you in greater detail.
Investment decision and information needs
Deciding about or managing an Investment outside the domestic market requires knowledge about the economic and regulatory environment of the target-market. For Investments by Chinese businesses Germany has shown to be one of the top target countries for several good reasons. Through the joint efforts of our CSG teams in Germany and China, we hereby present you the updated version of Investing in Germany – A Guide for Chinese Businesses, to help you obtain an overview of the investment environment and business guidelines in Germany.
Economic Environment, Industry and Sector Focus
The first part of publication deals with the economic environment in Germany.
Besides general information that hold for a wide range of industries, the second part of the publication gives deeper insights into the German automotive and LSHC industry as they are especially attractive for Chinese investors.
The third part of the publication is about the regulatory environment in Germany and is designed to give an understanding of the fundamental principles and rules of the German company law, German tax regulation, and labor law as well as accounting and auditing regulation.
The section is rounded out by specific regulatory considerations for the banking industry in Germany. Throughout the whole publication the content focuses on the information needed by decision makers of Chinese Investors.
Established in 2003, Deloitte's Global Chinese Services Group (GCSG) advises Chinese companies expanding their global presence and multinational companies operating in China. We have over 3,300 Chinese speaking professionals and local experts who understand Chinese business culture across the 6 continents. This dedicated network is committed to providing professional advice and comprehensive solutions to Chinese companies going global and multinationals coming to China.