German Economy and Business Practices
Economy
Currency
The euro (1 EUR = 100 cents) is the legal tender for 321 million people in 17 European countries:
Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Portugal, Slovenia, Spain, The Netherlands, Estonia and Slovakia.
Go to the European Central Bank for more information.
Exchange rates
1 EUR = 1.33 USD (January 2013)
1 USD = 0.75 EUR (January 2013)
Economic Data
Year |
Average Unemployment rate |
Annual Inflation rate |
2002 |
9.8% |
1.5% |
2003 |
10.5% |
1.0% |
2004 |
10.5% |
1.7% |
2005 |
11.7% |
1.5% |
2006 |
10.8% |
1.6% |
2007 |
9.0% |
2.3% |
2008 |
7.8% |
2.6% |
2009 |
8.1% |
0.4% |
2010 |
7.7% |
1.1% |
2011 |
7.1% |
2,3% |
2012 |
6.7% |
2,1% |
Sources: German Department of Labor and Federal Statistical Office Germany
Note: The unemployment rates of East and West Germany differ.
Please check the German Department of Labor for detailed information.
Year |
GDP (billion EUR) |
2002 |
2132,2 |
2003 |
2147,5 |
2004 |
2195,7 |
2005 |
2224,4 |
2006 |
2313,9 |
2007 |
2428,5 |
2008 |
2473,8 |
2009 |
2374,5 |
2010 |
2476,8 |
2011 |
2570,0 |
2012 |
2645,0 |
Source: German Central Bank
U.S. Exports and Imports to Germany
After Canada, Mexico, China and Japan, Germany is the fifth largest trading partner of the U.S.
2000-2011
Note: all figures in millions of U.S. Dollars
Year |
Exports to Germany |
Imports from Germany |
Balance |
2000 |
29,448.4 |
58,512.9 |
̶ 29,064.5 |
2001 |
29,995.4 |
59,076.6 |
̶ 29,081.2 |
2002 |
26,629.6 |
62,505.7 |
̶ 35,876.1 |
2003 |
28,831.9 |
68,112.7 |
̶ 39,280.8 |
2004 |
31,415.9 |
77,265.6 |
̶ 45,849.7 |
2005 |
34,183.7 |
84,750.9 |
̶ 50,567.2 |
2006 |
41,319.1 |
89,082.0 |
̶ 47,763.0 |
2007 |
49,419.7 |
94,164.1 |
̶ 44,744.4 |
2008 |
54,505.3 |
97,496.6 |
̶ 42,991.3 |
2009 |
43,306.3 |
71,498.2 |
̶ 28,191.9 |
2010 |
48,160.7 |
82,429.1 |
̶ 34,268.4 |
2011 |
40,837.0 |
80,616.8 |
̶ 39,779.8 |
2012 |
44,983.6 |
99,299.3 |
-54,315.7 |
Source: U.S. Census Bureau
Main Exports and Imports by Commodity with Germany 2010
Commodity |
Imports from Germany |
Exports to Germany |
Apparel |
USD 115.6 million |
USD 142.3 million |
Chemical goods |
USD 7.1 billion |
USD 7.2 billion |
Electric Equipment |
USD 9.5 billion |
USD 11.4 billion |
Beverages |
USD 611.9 million |
USD 426,.2 million |
Machinery |
USD 15.4 billion |
USD 6.8 billion |
Cars and car parts |
USD 25.4 billion |
USD 5 billion |
German Business Practices
Business Hours
- normal working hours: 09:00am – 05:00pm
- retail opening hours: German states have different regulations. Opening hours vary. 24h shopping on Sundays is only available at certain gas stations and at other sites related to travel.
Labor
Wages and Productivity
When compared internationally, wages in Germany are among the highest in the European Union and worldwide. Average industry wages in 2005 were 27.9 EUR (Western Germany) respectively 17.4 EUR (Eastern Germany) per hour. Nonetheless, German labor is known to be productive and skilled. German quality is famous throughout the world.
Labor Law
Unions are powerful and large in Germany. Workers are protected by strong labor laws that provide them with many different rights. They are much more substantial than in the U.S. Here are some examples:
Ordinary dismissal of workers must be proceeded by notice, which depends on the duration of the time the employee was with the company. It may vary from 1-7 months. The employee may also challenge the dismissal in court.
The Mother Protection Law grants a mother a total of 36 months leave. 6 weeks prior to birth and 8 weeks thereafter are on paid leave. The mother and the employer can agree on a parental leave (max. 36 months), after which the employer provides her with the same job prior to the birth of the child.
Social Security and Health Care cost are equally split up between the employee and the employer.
Average working hours are 37,5 hours/week and annual leave varies between 20 and 30 working days.
For additional information on labor in Germany please visit the Central Office of the Employment Agency.
Tax
- value-added tax: 19%
- value-added tax for food: 7%
- corporate income tax on distributed and undistributed income: 25%
If you are a foreign company looking to register for VAT in Germany, please contact the following institution:
Bundeszentralamt für Steuern
An der Küppe 1
D-53225 Bonn
phone: +49 (0) 228 406-0
fax: +49 (0) 228 406-2661
http://www.bzst.bund.de
eMail: poststelle@bff.bund.de
Depending on where you will carry out business in Germany, you will need to contact that local Finance office (Finanzamt). For all office listings please look at the following website: http://www.finanzamt.de/
If you are already registered for VAT in Germany and want to claim VAT back, please send an email to vatrefund@bff.bund.de
Legal
The Legal Guide to Germany
The project “The Legal Guide to Germany" is the expat's concise guide to overcome officialdom in Germany
http://www.lg2g.info
