German Economy and Business Practices

Economy

Currency

The euro (1 EUR = 100 cents) is the legal tender for 19 of the Member States of the European Union:

Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

Go to the European Central Bank for more information.

Exchange rates

1 EUR = 1.12 USD (May 2019)

1 USD = 0.90 EUR (May 2019)

Economic Data

Year	Average Unemployment rate	Annual Inflation rate (HICP)
2002	8.7%	1.4%
2003	9.8%	1.0%
2004	10.5%	1.8%
2005	11.3%	1.9%
2006	10.3%	1.8%
2007	8.7%	2.3%
2008	7.5%	2.8%
2009	7.8%	0.2%
2010	7.1%	1.2%
2011	5.9%	2.5%
2012	5.5%	2.1%
2013	5.2%	1.5%
2014	5.0%	0.9%
2015	4.6%	0,3%
2016	4.1%	0,4%
2017	3.8%	1.70%
2018	3.2%	1.90%

Source: Eurostat

Note: Unemployment rates differ in the regions that were formerly divided into East and West Germany.

Please check the German Department of Labor for detailed information.

Year	GDP Germany (billion EUR)
2002	2132.2
2003	2147.5
2004	2195.7
2005	2224.4
2006	2313.9
2007	2428.5
2008	2473.8
2009	2374.2
2010	2495.0
2011	2609.9
2012	2666.4
2013	2735.8
2014	2915.7
2015	3025.9
2016	3144.0
2017	3263.3
2018	3338.2

Source: Federal Statistical Office Germany

U.S. Exports and Imports to Germany

As of 2016, after China, Canada, Mexico, and Japan, Germany is the fifth largest trading partner of the U.S.

U.S. trade in goods with Germany: 2000-2018

Note: All figures are in millions of U.S. Dollars on a nominal basis.

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	41,159.1	89,082.0	̶ 47,922.9
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	48,155.3	82,450.4	̶ 34,295.1
2011	49,146.8	98,687.9	̶ 49,541.1
2012	48,797.1	108,708.1	̶ 59,911.0
2013	43,807.4	105,109.2	̶ 61,301.8
2014	49,363.3	123,259.6	̶ 73,869.3
2015	49,946.7	124,139.2	̶ 74,192.6
2016	49,362.0	114,227.4	̶ 64,865.4
2017	53,492.8	117,744.8	̶ 64,252.0
2018	57,653.8	125,904.1

Source: U.S. Census Bureau

Main Exports and Imports by Commodity with Germany 2018

Commodity	Imports from Germany	Exports to Germany
Air- and Spacecraft (incl. parts)	USD 2.5 billion	USD 8.9 billion
Optical, Photo, Surgical Instruments	USD 10.6 billion	USD 6.7 billion
Electric Equipment	USD 8.8 billion	USD 5.5 billion
Pharmaceutical Products	USD 15.3 billion	USD 3.4 billion
Nuclear Boilers, Machinery (incl. parts)	USD 27.2 billion	USD 6.8 billion
Vehicles (incl. parts)	USD 25.4 billion	USD 7.2 billion

German Business Practices

Business Hours

Labor

Wages and Productivity

When compared internationally, wages in Germany are among the highest in the European Union and worldwide. The minimum wage in Germany is EUR 9.19 per hour as of January 2019. Additionally, German labor is known to be productive and skilled, as 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 preceded 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 Law of Parental Allowance (Gesetz zum Elterngeld und Elternzeit) grants a mother a total of 36 months leave, and father leave is also becoming common practice. Six weeks prior to the birth and eight weeks thereafter are on paid leave. The mother and the employer can agree on a parental leave (max. 36 months), after which the employer will provide her with the same job she had prior to the birth of the child.

Social Security and Health Care costs are equally split 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

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 wish to reclaim VAT, 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 overcoming officialdom in Germany: http://www.lg2g.info