Foreign Investors Appreciate Germany

March 17, 2010 · Filed Under Countries

Germany has proven itself internationally as an investment location, even in the crisis year 2009. Compared to the previous year, investment project inquiries increased slightly.

Germany Trade & Invest, the foreign trade and investment promotion agency of the Federal Republic of Germany, assisted 190 companies with site visits in Germany in 2009. In 2008, this figure was 180.

Especially in the service sector, Germany Trade & Invest recorded a high level of investor interest. Further attractive industries include renewable energies, mechanical and electronic technologies, as well as chemicals and healthcare. Foreign investors especially value Germany as a production location, for research and development, and for the establishment of company headquarters.

Dr. Bernd Pfaffenbach, State Secretary in the Federal Ministry of Economics and Technology: “Germany Trade & Invest’s record confirms the high level of interest in Germany. Despite the difficult economic environment, the country fares even better in 2009 than in the previous years. Germany is valued as reliable and competitive – this is true for its entire spectrum of advanced technologies and services.”

Of the 190 projects assisted in 2009, Germany Trade & Invest turned over 80 investment projects to the economic development agencies of the federal states. At this point within the investment process, a company has selected the federal state in which the investment should take place. These 80 projects translate to approximately 2,800 jobs and an investment volume of EUR 700 million.

Michael Pfeiffer, Chief Executive Germany Trade & Invest: “Foreign investors value Germany as a location for production, research and development and for the establishment of headquarters. As an investment destination, Germany belongs to the frontrunners in international rankings.”

Approximately half of foreign direct investment projects assisted by Germany Trade & Invest focused on production and research and development. The majority of projects fall within the mechanical and electronic technologies industry or the service sector. However, the renewable energies industry leads in the number of jobs created (56 percent), followed by chemicals and healthcare (24 percent).

While investor requests in 2009 increased considerably in comparison to 2008, the macroeconomic environment had repercussions on the investment volumes and number of jobs created. Financing proved an obstacle for some investment plans, resulting in a delay of some projects or an extremely limited execution of investments compared to original intentions.

Changes could also be witnessed in the countries of origin. Investors continued to originate primarily from Europe (34, compared to 37 in 2008), Asia (32; 2008: 27) and North America (11; 2008: 19). With seven projects, the USA confirmed its position, also in Germany Trade & Invest’s statistics, as the most important investor country. However, the shift to greater interest from Asia has become clear. Indian and Chinese companies especially increased their presence in Germany. Interest in Germany by Israeli and Turkish companies could also be witnessed. Especially in high-tech industries, such as medical technology, healthcare and nanotechnology, Germany became increasingly attractive to Israeli investors. In the consumer goods industry, primarily in textiles and household goods, companies based in Turkey are increasing their presence in Germany.

In terms of total foreign investments in Germany, the country improved its position within Europe and worldwide. The database fDi-Markets (Financial Times Group) records a total of 470 FDI projects in 2009 for Germany. With this figure, Germany comes in fifth in the ranking of the most attractive investment locations worldwide (behind the USA, China, Great Britain, and India). Within Europe, Germany improved its position as an FDI location and ranks for the second time in front of France, coming in second behind the United Kingdom.

Germany Trade & Invest is the company for foreign trade and business location marketing of the Federal Republic of Germany. The company advises foreign enterprises which plan to expand their business to the German market. It supports German companies seeking to tap foreign markets by providing foreign trade information.