The cultural bonds between the UK and Germany have changed quite dramatically over recent years. The underlying mood of Anglo-German relations has been shifting for some time and although we still may find certain episodes of Fawlty Towers amusing, the joke itself is finally wearing a bit thin.
In a 2014 poll by the Nations Brand Index (NBI), a minimum of 1,000 people per country were interviewed and asked to rank countries based on their positive influence on the world. Surprisingly Germany was voted the world’s favourite nation and a favoured among UK residents. It would appear that strong and tasty German beer can do wonders for your image.
Worlds Favourite Nations
2. United States
3. United Kingdom
People are finally starting to forget the teachings of their tweed wearing school history teacher where apparently Hitler was the only person of influence ever to come out of the country. In his place is a perception that’s more befitting of Germany’s place within modern society, and we’re recognising that hard work, quality and a formerly hidden sense of humour are positive virtues.
Nowadays if we’re asked to “name a famous German” many Brits will mention Boris Becker (our very favourite German) and smile wryly at the thought of his scandalous adventures in a restaurant broom cupboard. Ahh Boris, you old scallywag.
Finally and about time our perceptions of Germans as dour, robotic and efficient warmongers seem to be finally on the decline; and it only took 60 years!
Part of this changing perception is down to Germany’s strong economic and political position. Featuring the largest market, population and economy in the EU, businesses are starting to see the opportunities that Germany has to offer. The risk adverse nature of Germans and their efficiency in managing budgets without over-stretching themselves, has helped form the foundation of a strong economic climate that’s an attractive business proposition for many entrepreneurs looking to start a business in Germany.
The German economy is largely built on small businesses and according to the German American Chamber of Commerce there are 3.72 million companies throughout the country, with 99.5% of them either small or mid-sized.
Of course there will always be cultural differences, while many of us in the UK look to build a business to sell on, Germany’s differing ideals is to build a company for their families and the generations to come. Sustainability is of paramount importance.
Germany as a country though is welcoming foreign investment and as long as your business provides quality products that will benefit the country, it’s a good time to be contribute to the untapped giant of European efficiency.
What you’ll need to start a business
There can often be a good deal of bureaucracy when starting a new venture in Germany. You’ll need to apply for a business license, register your business, apply for a legal company name and draw up a robust business plan (often used to gain capital from lending banks).
It’s recommended to seek the advice of an expert as it’s likely you’ll need guidance with legal, tax, immigration and accounting practices that will differ from the UK.
You’ll also need to determine what type of business is best suited for your needs. There are four main types of business entities in Germany consisting of:
- GmbH (Limited Liability Company),
- AG (Stock corporation)
- Sole Trader
The GmbH is the most common form of company in Germany and the equivalent of the UK’s limited liability company. Share capital must be at least €25,000 with €12,500 to be paid up-front.
With a significant investment required for the GmbH, since 2008 entrepreneurs have been able to utilise the so called Mini-GmbH, developed especially for start-ups. The bureaucratic process is simplified and the minimum share capital is reduced to €1. The government still wants its €25,000 but is now willing to accept incremental payments. Entrepreneur’s can contribute a quarter of annual profits until they reach the €25,000.
If you’re looking to become self-employed you should check whether you’ll need a German Residence Permit (Aufenthaltserlaubnis) before taking up any self-employed work. Your country of origin determines if you need a special residence permit, but if you’re an EU national you will typically be allowed to move freely within the European Union for the purpose of self-employment.
Many businesses in Germany are funded by the banks and not by the venture capitalists popular in the UK. It can often be more difficult to obtain funding and convince a bank to lend you money, the strength of your business plan will play a large part of any successful loan.
There are however a good selection of incentive programs including governmental loans and grants of up to 50% to SMEs. Beneficial tax rates are also available for new companies but are generally not available in major metropolitan areas like Berlin, Hamburg and Munich.
Conducting Business In Germany
Yes we like Germany more now than we did 10 years ago, and yes they like the UK and our quirky royal family, but there are still certain cultural differences that are important to consider when doing business in Germany. If you ignore them then you could risk offending someone and negatively impact your business prospects.
Be On Time
Don’t ever be late. Even by 5 minutes. It shows disrespect and an inability to manage your time efficiently.
Use Titles & Surnames
Here in the UK we’re more than happy throw around a “Hey Bob” or “How’s it going Jimbo” as if we’re on the set of the Waltons. In Germany it’s customary and polite to use titles (Mr, Ms or Mrs) and surnames until we’re told otherwise.
The all-important handshake. Strong, firm but keep it brief. It’s also tradition to shake everyone’s hand in the room upon entering and leaving a meeting. A limp handshake isn’t a good sign, but I don’t think that’s reserved solely for the Germans.
If you’re pitching a business idea don’t use flashing graphics or fancy PowerPoint animations. Glitz and glamour isn’t the key. Keep your presentation to the point and factual. Back up your argument with data, stats and figures. It’s all about the detail.
Germany often has a distinct separation between business and personal life. Keep your small talk light but not personal. It’s customary NOT to answer emails over the weekend (again another example of poor time management) and don’t call out of hours. The personal wall has gone up.
It would seem that the tightening bonds between the UK and Germany are welcomed from both sides. The thawing of the past has allowed new businesses and entrepreneurs to work together, providing a great deal of optimism and opportunity for the future.
While we will always harbor some feelings of rivalry, this probably has more to do with the World Cup than anything else.
And that man with the funny moustache? For modern Germans, he’s kept firmly in the bunker of history while they get on and make their stamp on the world in a professional and businesslike manner.
By European company formation agent, EuroStart Entreprises- helping foreign businesses and entrepreneurs open their companies and expand their operations throughout the UK, Europe, US and the Emirates.