Doing business in Germany: the most important strengths and weaknesses

Germany has the largest economy in Europe and is one of the largest economies in the world. The country is known as the engine of the European economy, although that has certainly not been the case in recent years. In 2023, economic growth amounted to -0.6%, while the eurozone scored a small positive average (+0.6%). While Germany used to lead the way in economic recovery, it is now acting as a brake. The prospects are also not very bright. The German economy needs a thorough overhaul. There are plenty of plans for this, but too little happens in practice.

Even though things are bad now and the tone is pessimistic, Germany is still an important economic bulwark. This is especially so with respect to the traditional manufacturing industry. It is one of the strongest in the world. German industry specialises in high-quality products such as cars, machines, chemicals and electronics. Industrial brands such as Mercedes-Benz, Siemens, BMW, Bosch and Volkswagen enjoy tremendous fame worldwide. German products are associated with quality, reliability and innovation all over the world.

Of course, the large industrial concerns are important for the German economy, but the strength of German small and medium-sized enterprises (SMEs) should not be underestimated. There are more than 3 million SMEs in Germany, which account for more than 50% of employment.

Of course, the Belgian business community is affected by the decline of the German economy. It remains our most important sales market. But at the same time, you see that dependency is decreasing. Figures from the Central Planning Bureau show that the German share of total Dutch exports has fallen from 30% to 20% in recent decades. That trend continues. If you look at the corona crisis, you will see that Germany has mainly stagnated since then, while Dutch exports have experienced strong growth.

Despite economic difficulties, Germany remains the 4th largest global economy and our largest trading partner. The German market therefore remains a good market if you want to develop your business abroad.

In many ways, the Germans can be considered masters of planning and organisation. Companies have a well-defined and strictly enforced hierarchy, with clear responsibilities and distinctions between roles and departments. The meetings follow a formal procedure and punctuality is taken very seriously. Being 15 minutes late is considered a serious violation.

German companies are generally risk-averse, which slows down the decision-making process. You can expect that every detail of your proposal will be considered with care and attention to detail. Be well prepared and use facts and figures.

The communication style is formal, direct, short and precise. Emotions and unnecessary content have no place in a discussion. If you don't speak German, make sure you don't systematically address someone in English. Germans generally speak very good English, but some may feel offended.