Exporting to Germany – Overview
Exporting to Germany – Germany is the biggest economy in the European Union and is regarded as an industrial powerhouse which drives the European Union. In 2022 it made up 4.39% of the world’s Gross Domestic Product (GDP) (source: Investopedia). So, Germany is the 4th largest economy in the world, according to the World Bank. It has a stable government, a strong rule of law and an effective regulatory system. Secondly, the population of Germany is 82.4 million people, with only 22.8% of the population under 25 years of age (source cia.gov). Germany has challenges with an ageing population, and it has become dependent on migrants to support its economy.
Germany is a founder member of the European Union trading block. So, it makes its international trade deals through the European Union. It is the largest consumer market in the European Union and accounts for 25% of the European Union’s GDP.
German Business Culture
The official language in Germany is German. Additionally, English is widely spoken. But, it is good manners to ask beforehand if English can be spoken.
German businesspeople are experienced and very adaptable in conducting international business and trade negotiations.
In Germany, business relations are very formal, and they reflect the German values of order, privacy, and punctuality. So, the use of formal titles and surnames is more common compared to the use of first names. The dress code is conservative understated, and formal. Men should wear a suit and tie, while women should wear a suit.
Secondly, punctuality is extremely important. It is advisable to arrive at a meeting 15 minutes early. In case of any delay, it is imperative to inform your contacts in advance. Meetings adhere to strict agendas, including starting and ending times. Additionally, when meeting someone for the first time, give a short and firm handshake and maintain eye contact, but avoid staring for uncomfortably long periods.
Business cards are exchanged quite soon after the commencement of a meeting. They should be in English; unless you have already set them up in Germany, it is unnecessary to have them translated into German. You should include any higher degree or honours with your name.
Germans usually prefer to get down to business and only engage in the briefest of small talk. You should avoid any form of irony and should not interrupt the participants. Germans are direct to the point of bluntness.
German customers can be very price-sensitive. However, even though price plays an important element, other factors such as quality, delivery times and service are highly regarded.
If you have Quality Problems with a Supplier in Germany, please read this blog about how to solve quality issues in Germany.
Setting up in Germany
The Germany Trade and Invest (GTAI) have information for companies considering setting up in Germany.
Therefore, companies wishing to enter the German market can consider a variety of route-to-market options, including:
- Using a sales agent. Companies must ensure that any agreements they put into place are in accordance with EU laws – Council Directive 86/653/EEC.
- Establishing a representative office. Anyone can open an office in Germany – irrespective of nationality or place of residence. There is no specific investment legislation or minimum percentage of German shareholdings required for foreigners. Investors can choose the most suitable legal form, i.e., a corporation, a partnership or conduct business via a German branch office.
- Franchising. Germany is friendly to franchise systems.
- Joint venture or strategic alliance. This can be challenging in Germany, especially when competition laws are applied.
Banking and Finance
The unit of legal tender in Germany is the Euro (€ EUR).
Germany has an established banking and financial system. Frankfurt is a major centre for international business and commerce because more than 60 national and 150 international banks have a registered office in Frankfurt.
Exporting to Germany – Tariffs and Non-Tariff Barriers
Tariff
Germany is part of the European Union trade bloc. Any agreements with the European Union apply to Germany. To find out more about the countries which the European Union has trade agreements with, please visit the EU’s Negotiations & Agreements page.
Tariffs and duty rates are constantly revised and are subject to change without notice. It is worth visiting the Germany Customs Service to determine any customs or import taxes in Germany for your goods or services.
Non-tariff barriers
Germany imposes restrictions on the sale or use of certain products, including:
- Agricultural products.
- Chemical products.
- Food products.
- Medical products,
- Pharmaceuticals products.
- Weapons and explosives
- Products for Torture
Please click on prohibited goods to find a list of restricted items for Germany.
Product labelling, certification, and packaging
Labels in Germany must not only meet its national regulations but also must conform to European Union requirements. Information on the labelling of products in the interest of consumers and compliance procedures are available at Summaries of EU Legislation. Labels must be in the German language and/or Multilanguage.
Food information and labelling legislation must comply with EU legislation. Please click on Food Labelling Information to learn more. Additionally, for organic produce, EU legislation requires that imported organic food from non-EU countries (third countries) be produced to the same standards as that from the EU. For more information, visit Trade in organic products.
The EU also may require certain marks for certain products. A mark is a symbol and/or pictogram that appear on a product or its respective packaging. These range in scope from signs of danger to indications of methods of proper recycling and disposal. The intention of such marks is to provide market surveillance authorities, importers, distributors, and end-users with information concerning safety, health, energy efficiency and/or environmental issues relating to a product. For more information about EU Marks and requirements, please click here.
Certification
Germany abides by the import rules and regulations of the European Union. Additionally, this is especially true for food products. Information for EU Food requirements can be found here. However, each country also may maintain additional requirements, such as licenses.
Packing
You should have your packaging approved by the importer in Germany as their market might have some specific preferences. Goods must meet the European Union requirements on marking.
So Methods of quoting and payment
The most popular method of issuing and receiving payments in Germany is electronic funds transfer (EFT, equivalent to SWIFT or wire transfers).
Payment terms must be agreed to in advance, which can include 30/60/90-day terms. So, whatever payment terms are agreed upon. Make sure they are understood by all parties and that your client, representative or contact signs a mutually agreed document. Additionally, it is best practice for sellers dealing with new customers to use secured payment terms such as 100% payment prior to shipping, letters of credit, sight drafts or bills of exchange.
Finally, both private and public credit insurance is available in Germany. Companies such as Euler Hermes, Coface, and Atradius offer this service.
Exporting to Germany – Documentary & Clearance Requirements
Documentation required:
For information about the documentary requirement of Germany, you should visit the EU’s Trade Help desk Page.
The single administrative document (SAD) is a form used for customs declarations in the EU, Switzerland, Norway, Iceland, Turkey, the Republic of North Macedonia and Serbia. It is composed of a set of eight copies each with a different function.
Companies established outside of the EU are required to have an EORI number. For more information on EORI numbers please visit the EU EORI’s page.
Customs process:
Prior to moving goods into the Union’s customs territory, an entry summary declaration (Summarische Eingangsanmeldung – ESumA) shall be lodged. The declaration enables customs to conduct a risk analysis for security and safety. The entry summary declaration must be distinguished from the summary declaration for temporary storage.
Exporters to Germany can find information about the Import requirements of Germany from the German Customs website.
European Union Customs procedures for import and export can be found here.
Exporting to Germany – Business Risks
It is recommended to get insurance for your products. Goodada Insurance provides clients with online insurance facilities.
Businesses wishing to operate in Germany should commit to the highest level of corporate behaviour and familiarise themselves with German and European laws on bribery and the penalties pertaining to the bribery of officials.
Intellectual Property Protection
Patents and trademarks are administered by the German Patent and Trade Mark Office (DPMA). The Madrid International Trademark System (WIPO). So, Germany’s legal system is intertwined with the EU legal system.
Exporting to Germany – Web Resources
German Customs ‘Zoll’
Germany Trade and Investment
Bundesministerium fuer Wirtschaft & Technologie
German Customs ‘Zoll’
Bundesministerium der Finanzen
Arbeitskreis Deutscher Markt- und Sozialforschungsinstitute e.V.
Deutsche Auslandshandelskammern (Chamber of Commerce)
Useful European Union Web Resources
Coordination of the laws of the Member States relating to self-employed commercial agents (Council Directive 86/653/EEC)
Agreements of Minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty establishing the European Community
Directive on Late Payment
European Ombudsman
EU’s Data Protection Directive (95/46/EC)
EU’s General Data Protection Regulation (GDPR)(2016/676/EC)
EU Data Protection Home page
Distance Selling of Financial Services
EU VAT Directive 2006/112/EC and its Implementing Regulation 282/2011
The Unfair Commercial Practices Directive /
Nutrition and Health Claims made on foods- Regulation 1924/2006
Regulation on Food Information to Consumers
Tobacco Policy
Product Liability
Product Safety
European Patent Office (EPO)
EU Intellectual Property Office (EUIPO)
World Intellectual Property Organization (WIPO) Madrid
So Exporting to Germany – About the Author
Aidan Conaty MBA ACMA GCMA is the founder of TCI China and Goodada.com. Goodada also provides Quality Control Inspections in Germany. Aidan has spent over 20 years assisting companies to trade internationally. Additionally, TCI China provides trade support services for China. Goodada helps companies to trade internationally.
Therefore, Aidan can be contacted by email at aidan@goodada.com or at:
- (Europe/ Rest of the World) +353 1 885 3919
- (UK) +44.020.3287.2990
- (North America) +1.518.290.6604