Germany in focus: opportunities and challenges for investors!

Germany in focus: opportunities and challenges for investors!

Germany as a location is currently caught between criticism and positive perspectives. Despite challenges such as high costs, expensive energy and complex bureaucracy, companies report in a recent survey by Germany Trade & Invest (GTAI) that Germany remains attractive for investments. Loud t-online.de Around 1,800 companies from a wide international spectrum, including Great Britain, France, the USA, Japan and South Korea, gave Germany a mixed rating. While critical points such as over-regulation and high tax and duty burdens are addressed, economic stability and innovative strength are valued.

The survey shows that around 60% of respondents believe that the infrastructure, scientific institutions and production conditions in Germany are good. Traditionally, Germany is valued for its economic strength, stability and the qualifications of its workforce. These positive characteristics are particularly emphasized by managers responsible for expansion decisions.

Challenges and strengths

Nevertheless, there is a shadow cast by rising operating and wage costs, linguistic and cultural differences as well as high taxes and fees. The Ifo Institute found in a survey that German economic experts only place Germany in the middle of the European field. Almost 80% of experts believe that the attractiveness of the location has decreased over the last ten years.

However, the FDI study gives a differentiated view of Germany as a location: In 2024, 1,724 foreign companies announced resettlement and expansion projects. This corresponds to a slight decrease of two percent compared to 2023, but remains stable in a five-year comparison. How Germany Trade & Invest further reported, the volume of international economic projects was 23.2 billion euros, which is the third highest value for Germany.

Investments despite crises

The level of investment is also significantly higher than before the corona pandemic. Around 35 percent of the investing companies come from the European Union, with the USA being the leading country of origin, followed by Switzerland, China, the United Kingdom and the Netherlands.

In terms of wealth distribution, 17 percent of investments went to the digital sector, 16 percent to energy and resources, and 15 percent to electronics and automation. A fifth of 20 percent was accounted for by manufacturing and research and development.

With this mix of challenges and opportunities, Germany remains a crisis-resistant destination for direct investment and could benefit in the long term from the economic stability and innovative strength it has to offer.