Guidance

Exporting to Germany

A guide for UK businesses interested in selling goods and services in Germany.

Visit www.great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

Germany in world business rankings

Germany is 20th in World Bank's ease of doing business 2017

Source: World Bank: Ease of doing business 2017.

Doing business in Germany

Germany has a Gross Domestic Product (GDP) of more than €3 trillion. This makes it the largest economy in Europe and the fourth strongest economy in the world. The economy is characterised by its small and medium-sized enterprises (SMEs). 99% of all companies are SMEs, with most being family owned and passed from one generation to the next.

Germany is the UK’s largest export market in Europe and second largest globally after the US. Its consistently strong economic performance offers long-term growth potential for UK businesses.

It’s a similar market to the UK with similar business risks and requirements. If your product or service is successful in the UK, there’s a good chance you’ll be successful in Germany.

However, some German companies prefer to buy local, and for this reason UK companies should think about what is unique about their product or service.

Read the EU’s practical guide to doing business in Europe which gives detail on rules and processes common to European countries.

Industries importing into Germany

The top 10 industries importing into Germany in ranked order are:

  1. machines, engines, pumps
  2. electronic equipment
  3. vehicles
  4. oil
  5. pharmaceuticals
  6. plastics
  7. medical, technical equipment
  8. organic chemicals
  9. aircraft, spacecraft
  10. iron and steel

You can read more about what Germany imports at World’s Top Exports.

The International Trade Centre (ITC) ranks the value of Germany’s top services imports.

Getting started in the German market

Visit great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

Consult local English-speaking lawyers to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity.

Direct exports and sales in Germany

With direct exports you handle all the logistics of marketing, selling, sending overseas and getting paid yourself. Direct sales are possible to retailers and through online sales.

If you don’t have a high level of fluency in business German, you may wish to use local representation. Options include using an agent, distributor or wholesaler.

The Department for International Trade’s (DIT) trade specialiasts can help you identify local representatives for your products in Germany.

Setting up a company or office in Germany

You must register a new business entity at the public commercial register (Handelsregister) and the local trade office (Gewerbe Ordnungsamt).

A business enterprise in Germany can be operated as a:

  • company
  • foreign branch
  • trust
  • joint venture
  • person
  • partnership

Find out more from Germany Trade and Invest (GTAI) about setting up a business in Germany.

If you set up a business entity in Germany you will need a bank account to organise day-to-day business activities. Most large international banks have offices in Germany, and it’s easy to set up foreign currency accounts.

The legal form of the company will determine what you will need to set up a company bank account. In addition to a valid passport you will generally need an excerpt from the commercial register and the company’s articles of association.

Online selling to Germany

If you’re selling your goods over the internet to private consumers you must be registered for Value Added Tax (VAT) with the German tax office when your annual turnover reaches €100,000.

Find out about DIT’s e-exporting programme which can help you export your products to Germany.

Check out online marketplaces in Germany where DIT has negotiated listings at better than commercial rates.

Licensing or franchising in Germany

You can license your goods or services to be sold in Germany.

Visit the international section of the British Franchise Association for more information on franchising.

Getting finance to fulfil an export contract to Germany

To make it easier to fulfil an export contract and grow your business, schemes are available to UK companies selling products and services to Germany. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to Germany. Contact one of UKEF’s export finance advisers for free and impartial guidance on your finance options.

Getting paid in Germany

You may wish to talk to a specialist about finance, including how to get paid in Germany. This could be a bank or an accountant or you can contact the DIT team in Germany to help find a financial adviser in Germany.

Your contract will specify the terms for payment. If there is any dispute you will need to go through the German legal system for resolution.

Within the EU, many businesses use payment on account in much the same way as within the UK.

Customers in Germany may require credit terms to buy your products and services.

Payment conditions must be factored into prices. For business-to-business transactions these can range from immediate payments on receipt of goods (often with a negotiated small discount) to a negotiated 60-day payment.

Standard payment terms for business-to-business transactions in the EU are 60 calendar days and 30 calendar days for public authorities. Late payment interest can be claimed when terms are not met.

Find out more about the EU’s late payment directive.

Payment risks in Germany

UKEF helps UK companies get paid by insuring against buyer default.

Speak to one of UKEF’s export finance advisers for free and impartial advice on your insurance options or contact one of UKEF’s approved export insurance brokers.

Currency risks when exporting to Germany

If you have not fixed your exchange rate you have not fixed your price.

You should consider whether the best option for you is to agree terms in sterling or euros in any contract. You should also consider getting expert financial advice on exchange rates (sometimes called FX).

Transferring money from Germany

Capital can be moved in and out of Germany without any restrictions. However, amounts over €12,500, or equivalent payments with valuables, must be reported to the German Central Bank (Bundesbank).

Payments for the import or export of goods do not have to be reported.

EU legislation forms the basis of the law for trade and commerce in Germany.

The regulatory environment in Germany is very strong. You should make due diligence checks before going ahead with any investment. This is particularly relevant for artisans or business connected with the construction industry.

Contact the DIT team in Germany to help find tax and legal advisers before entering into agreements.

Agent or distribution agreements in Germany

German law is far more favourable than English law to the agent when entering into agreements. This is despite moves to unify agency law within the EU.

Professional advice should be taken when entering into an agreement with a German agent.

Export licences for Germany

You may need a licence to supply goods that are on the UK strategic export control list to Germany.

Some other products may need certification and licensing.

Consumer protection law in Germany

If you’re selling to consumers (rather than businesses) you must comply with EU consumer protection law.

Customers in Germany have various consumer rights when you sell at a distance (not meeting the customer face-to-face).

Standards and technical regulations in Germany

Find out about standardisation in the EU.

Packaging for export to Germany

Packaging must conform to EU legislation on the prevention of health risks to consumers and the protection of the environment, especially with regards to waste treatment.

Packaging plays an important role how German consumers choose products. It is essential that great care is taken in conforming to German tastes.

Find out more about packaging regulations in the EU.

Find out about requirements for using wood packaging in the EU.

Product requirements in Germany

Product standards are the same in most EU member states. If you sell products in the UK it’s likely that you already comply with standards in other EU countries.

Many products require a CE marking before they can be sold in the European Economic Area (EEA). This marking proves your product has been assessed and meets EU requirements for safety, health and environmental protection.

Find out more about CE markings.

Deutsches Institut für Normung (DIN) has responsibility for standardisation, certification and assessment in Germany.

You should consider taking out product liability insurance if you manufacture or supply a physical product.

Labelling your products for Germany

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

You can choose to use the e-mark on packaging when exporting food products to Germany, or use Germany’s rules on weights and measures.

Protecting your intellectual property (IP) in Germany

If you do business in more than one EU country, an EU trademark and a registered community design gives protection in all 28 member states.

Patent protection law is not totally harmonised within the EU. You can apply for a German patent at Deutsches Patent - und Markenamt or for a European patent through the European Patent Office (EPO). However, a European patent needs to be validated by the German patent office.

Read the Intellectual Property Office’s (IPO) more detailed guidance on IP protection in the EU.

Taxation in Germany

The UK and Germany have signed a double taxation agreement, ensuring the same income is not taxed in more than one country.

VAT

The standard rate of VAT in Germany is 19%. 7% is charged for convenience goods and services needed on a day-to-day basis such as food, newspapers or public transport. Some services including banking, healthcare and non-profit work are VAT exempt.

Goods exported from the UK to Germany are zero-rated for VAT purposes if your customer provides their VAT registration number (‘Umsatzsteuer-Identifikationsnummer’ or ‘UST-IdNr’) and you have proof of export.

You’ll need your German customer’s VAT registration number for your VAT Return and paperwork proving that the goods have been sent within certain time limits (usually 3 months).

You have to:

  • record all the goods sold to Germany on your VAT Return
  • fill in an EC Sales List
  • fill in an Intrastat declaration if your total dispatches are worth more than £250,000

Check to see if a German VAT number is valid.

Find more information on VAT in EU markets.

Find out about VAT requirements if you’re supplying digital services to EU markets.

Find out more about complying with Intrastat rules.

If your customer is not VAT-registered you must charge VAT at UK rates and include the amounts on your VAT Returns.

Excise duty in Germany

You should check you’ve paid excise duty on any alcohol, alcoholic drinks, energy products, electricity or tobacco products you send to Germany.

Find out more about excise duty and duty drawback within the EU.

Company and corporate tax in Germany

Germany does not have a nationwide tax rate for companies. Corporate tax rates average about 30% depending on the local municipality. You can find out more about local corporate tax at Germany Trade and Invest.

On the federal level, corporations, such as limited liability companies (GmbH) and stock corporations (AG) are subject to corporate income tax. Partnerships pay personal income taxes (Einkommensteuer) instead.

On the local level, all companies are subject to the trade tax (Gewerbesteuer) raised by local municipalities. Due to this local tax, the overall tax burden can vary by up to 10% between different locations.

Customs and documentation for Germany

Germany is part of the EU single market. This allows the free movement of goods and services without customs checks or need to pay duty (except excise).

Goods can be sent to Germany without special customs documentation.

Excise or controlled goods will need extra documentation.

Read HMRC’s guidance on dispatching your goods within the EU.

Shipping your goods to Germany

You can usually send samples of your goods through the postal system.

Your local post office can also be used to export small orders to Germany if they can be easily packaged and are within the current weight restrictions.

If you’re sending goods by post you must check that the items are not prohibited or restricted by mail services in the UK and in Germany.

Find out more about prohibited or restricted items in Germany on Royal Mail’s website.

When using postal services on a more commercial basis you must complete the required customs form with the commodity code that relates to your goods.

Find your commodity code in the UK Trade Tariff.

Email HMRC’s Tariff Classification Service for more help on tariffs.

You must get a Certificate of Posting (form C&E 132) from the post office branch and you should ensure it’s date-stamped. This supports the VAT zero-rating of your goods. If you’re exporting UK duty-paid excise goods, you will need the certificate of posting form to support a claim for reimbursement of the UK excise duty.

For bigger orders, most businesses use a courier or freight forwarder.

Special rules apply if you’re shipping dangerous goods to Germany.

A pro forma invoice (and licence, if you need one) must be attached to your consignment. Records of pro forma invoices must be kept for 4 years.

Terms of delivery for Germany

Your contract should include agreement on terms of delivery using Incoterms.

Trade agreements

Germany is a member of the EU and the World Trade Organization (WTO).

Contact the SOLVIT team if you have market access issues relating to the operation of the single market.

Language and culture in Germany

Business people in Germany will be well prepared for any face-to-face meetings. They will have thoroughly researched your company’s products and services before any meeting. You should be punctual at meetings and be able to answer specific questions.

Meetings tend to be formal in Germany unless you’re in a one-to-one situation.

German firms are often family-owned and take a longer-term view. That means they value personal relationships highly, and will not necessarily just go for best price, but for long-term shared vision or relationship.

Finding opportunities in Germany

You should do as much market research and planning as possible before exporting to Germany, using both desk research and visits to the market. You need to determine if there is a market for your product or service and whether your pricing is competitive.

DIT’s OMIS service can help you research the German market.

DIT provides free international export sales leads from its worldwide network. Find export opportunities in Germany.

Government tenders in Germany

Find high value public procurement notices from the EU and EEA on Tenders Electronic Daily (TED).

Entry requirements for Germany

You don’t need a visa to enter Germany.

Travel advice for Germany

If you’re travelling to Germany for business, check the Foreign & Commonwealth Office (FCO) travel advice first.

DIT contacts for Germany

Contact a local DIT trade adviser in the UK if you’re interested in finding out more about doing business in Germany.

If you want more information and advice on opportunities in Germany, contact the DIT team in Germany.

Published 12 November 2016
Last updated 18 November 2016 + show all updates
  1. Change to HMRC tariff contact detals
  2. First published.