Investment Environment
Biggest Market at the Heart of Europe
Germany is the largest market in Europe. It constitutes 25 percent of Europe's GDP (EU-27) and is home to 19 percent of the total European Union (EU) population.
The German economy is both highly industrialized and diversified – with equal focus placed on services and production.
Share of Total GDP and Population in the European Union 2020
| GDP (in EUR tr) | Share of Total GDP (EU 27) | Population (in m) | Share of Total Population (EU 27) | |
| Germany | 3.3 | 25% | 83 | 19% |
France | 2.3 | 17% | 67 | 15% |
Italy | 1.7 | 12% | 60 | 13% |
Spain | 1.1 | 8% | 47 | 11% |
Netherlands | 0.8 | 6% | 17 | 4% |
Poland | 0.5 | 4% | 38 | 8% |
Czech Republic | 0.2 | 2% | 11 | 2% |
EU 27 | 13.3 | 100% | 447 | 100% |
USA | 17.1 | 328 | ||
China | 12.0 | 1,398 | ||
Japan | 4.1 | 126 | ||
UK | 2.2 | 67 |
Key Driver: The Manufacturing Industry
Ten percent of Europe's manufacturing companies are German. They generate more 30 percent of the EU's gross value added in the manufacturing sector alone. In fact, they represent more than one fifth of all of Germany's value added – one of the highest shares in Europe. Increasingly more foreign companies are placing their faith in Germany as an essential location for production sites and are benefiting from the country's excellent business framework and superior productivity rates.
Economic Backbone: Small and Medium-Sized Enterprises
Exports are driven by Germany’s backbone of highly innovative small and medium-sized enterprises (SMEs). These constitute more than 99.3 percent of all companies that employ 55 percent of all employees in Germany. Many of these SMEs are world market leaders in their respective niche segments. Together with internationally leading companies - such as Bayer, BASF, Daimler, Volkswagen, and Siemens to name but a few - they make up Germany’s manufacturing industrial base.
Company Structure in Germany (2019)
Total | SMEs | SME-Share | |
Number of Companies * | 3.56 m | 3.54 m | 99.3% |
Turnover of Companies * | EUR 7,153 bn | EUR 2,353 bn | 32.9% |
Employed * | 35.21 m | 19.24 m | 54.7 % |
Net Value-Added ** | 60.6 % |
All figures relate to the private sector (commercial business economy and the liberal professions without public sector, NACE Rev. 2 Codes A-N,P-S). Exceptions are marked.
* Figures provided by the business register (NACE Rev. 2 Codes B-N,P-S). Differentiation of SMEs by number of employees and turnover
** Estimates by the IfM Bonn. Basic data: turnover tax statistics (VAT). Differentiation of SMEs by turnover
