Exporting to Germany

Germany is the world’s fourth largest economy (World Bank, 2019) and the largest economy in Europe. It is highly industrialised, diverse and stable, offering long-term potential and many opportunities for UK businesses offering innovative, quality products.

Strong trade partnership

Germany is the UK’s second largest export market for goods and services and second largest trading partner, accounting for more than 10.2 % of all UK trade in 2019 (ONS, 2019). During that period, total trade between the UK and Germany was worth £136 billion.

Digital industry and economy

The digitisation of Germany’s industry and economy will impact on all sectors and enhance opportunities associated with business models, manufacturing processes, digital marketplaces, mobility, cyber threats and supply chains. There is demand in areas of UK strength such as big data, artificial intelligence, cyber security, food and drink, consumer goods and the internet of things.

Strong economic framework

Germany offers competitive tax regulations, investment incentives and a secure, highly developed political and economic framework. This is supported by an excellent infrastructure, a highly qualified workforce and a legal system that protects property and individual rights. Germany also host some of the largest international trade shows, where companies have access to German and international buyers.

Ease of doing business

22nd

out of 190 countries, World Bank 2020

Currency

Euro

Business languages

German

You may need a translator

GDP per capita

$47,662

UK is $41,030 (IMF, 2019)

Economic growth

1.5%

2019, IMF

Time zone

GMT +1

Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in Germany have identified particular opportunities for UK businesses in the following sectors:

Doing business in Germany

Preparing to export

VAT

The standard rate of VAT in Germany is 19%. Convenience goods and day-to-day services are charged at 7%. Some services including banking, healthcare and non-profit work are VAT exempt.

Goods exported from the UK to Germany are zero-rated if your customer provides their VAT registration number.

Packaging and labelling

Packaging has a strong influence on German consumers and informs how they choose products. It’s worth doing research to check that your packaging is to German tastes.

EU standards apply to packaging. For more information see the EU trade helpdesk.

Labelling should be translated into German. Certain products, such as food and textiles, have specific labelling requirements.

Payment terms

Standard payment terms for business-to-business transactions are 60 days and 30 days for public authorities. You can claim late payment interest when terms are not met.

Operating in Germany

Routes to market

In a stable and secure market, there’s a wide range of routes to market.

Options which may work well for you are:

  • agents and distributors - using local agents or distributors is an effective way to develop a presence in Germany due to the size of the market. German is the language of business and fluency is a major advantage for your company when using local partners.

  • direct sales - due to the relative closeness of the market, direct sales are possible. However, the need for German language skills should be considered. Ensuring full coverage of the whole market could be a challenge.

  • e-commerce - selling online or through e-marketplaces may be a good option for your company. It’s relatively cheap and easy to deliver products into Germany. DIT can suggest online marketplaces to help you get started. DIT’s E-Exporting Programme can also help.

The British Chamber of Commerce in Germany is a useful source of further information on routes to market in Germany.

Business culture

German firms are often family-owned and take a longer-term view. They value personal relationships highly.

Often businesses will not necessarily go for best price, but for long-term shared vision or relationship.

Business people will be well prepared for meetings, and will have carefully researched your products and services.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.