challenges of doing business in germany

If you are looking for the Challenges Of Doing Business In Germany, then you are on the right page. It contains advantages of doing business in germany. Suppose you want cultural considerations when doing business in germany instead. Then this article is what you need.

Nearly 4% of global direct investment flows into Germany and few countries are as tightly connected to the world economy, but doing business can still be a challenge for those unfamiliar with its legal and tax structures, which is why having local help is essential. 

Germany is the biggest economy in Europe and the fourth-largest in the world, built on research, innovation and its ability to attract foreign direct investment (FDI) from around the world. More than 45,000 foreign companies are doing business in the country, employing more than three million people, and almost one in four jobs are dependent on the export sector.

advantages of doing business in germany

Challenges Of Doing Business In Germany

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In addition to an excellent investment climate, Germany offers international businesses outstanding economic conditions. The economy is now far more competitive than it once was thanks to structural reform and changes to the corporate tax rate. First class infrastructure, a modern finance system and a huge consumer market are also investment magnets, but businesses should be aware of the many challenges to doing business in Germany, and the benefits of having local help on board to navigate legal, tax and cultural barriers. 

Starting a Business  
The process of starting a business underlines the complex nature of doing business in Germany. Despite its global standing and modern outlook, the World Bank and International Finance Corporation (IFC) rank Germany in 106th in the world for ease of starting a business, largely down to the several procedures companies are required to navigate. Among other steps, businesses are required to liaise with the local chamber of industry and commerce, the local commercial register, the local office of business and standards and the professional association of the relevant trade. 

Dealing with Construction Permits
Obtaining a building permit and approval of static calculation are the most lengthy procedures when dealing with construction permits, although obtaining a water connection and telephone line can also take some time. 

Getting Electricity
Germany boasts one of the most streamlined procedures for getting electricity to business in the world, requiring only three procedures and taking 17 days compared to the OECD average of 98. 

Registering Property
The registration of property is another task that is laden with bureaucracy. Companies must obtain an extract from the Land Registry and notarise the transfer agreement before obtaining waiver of preemption rights with the municipality and paying transfer tax. This takes an average of 40 days to complete. 

Getting Credit 
Germany is home to a modern financial sector that operates within a strict legal environment. Getting credit is therefore a relatively streamlined process, although there is no collateral registry in operation.  

Protecting Investors 
The World Bank and IFC rank Germany in 100th place for strength of investor protection, although steps have been taken to improve their ranking. The Strengthening Investor Protection and Improving the Functionality of the Capital Market Act, signed in 2011, gave more efficient regulation and supervision of the markets. 

Paying Taxes
Germany’s fiscal system is notoriously difficult to navigate. Businesses have to contend with nine tax payments a year taking 207 hours of their time; social security contributions take 134 hours to deal with alone and corporate income tax and VAT payments can also be extremely time constraining. Altogether there are 14 different taxes which may be payable by businesses operating in Germany. 

Trading Across Borders
Trading across borders is a relatively cheap endeavour, but it still requires four documents to be prepared when exporting and five when importing. It takes a week on average to both import and export goods. 

Enforcing Contracts and Resolving Insolvency
Germany’s modern legal system handles contracts and insolvency with relative efficiency. It takes 394 days to enforce a contract and 438 days to resolve insolvency. 

Culture
Doing Business in Germany without adequate cross-cultural awareness is a risky proposition, and businesses should ensure they carry with them an appreciation of both the business landscape and the culture. Hierarchy is valued in Germany and there is often a plethora of procedures and policies which can slow things down, so having a bit of patience is crucial to the success of business negotiations. 

TMF Group 
We have the local knowledge to help you navigate these minefields. Whether you want to set up in Germany or just want to streamline your German operations, talk to us.

cultural considerations when doing business in germany

BEST SITES LIKE ALIEXPRESS FOR ONLINE SHOPPING

AliExpress is a massively popular Chinese online retail service owned by Alibaba Group. It was launched in 2010 and hasn’t stopped its journey to becoming the ‘biggest online marketplace of the world‘ ever-since. AliExpress stands toe-to-toe even with Amazon in terms of buyers worldwide. It offers wholesale goods at direct-to-consumer prices from Chinese sellers.

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It also works as a great dropshipping model for a lot of e-commerce entrepreneurs. Along with a lot of good sides, AliExpress has some cons as well. The biggest problem is the shipping time of AliExpress orders, which is pretty long considering the goods come from China. Also, some orders can be very expensive after shipping charges and taxes.

So, it is a good thing to have some AliExpress alternatives whenever you don’t like its services. That’s why we are telling you about 21 best sites like AliExpress. Some of these websites offer cheaper prices and faster shipping on certain products. And, you can also use them to maintain a nice profit margin for your dropshipping business.

1. LIGHTINTHEBOX

LightInTheBox is the perfect AliExpress alternative as it is also a Chinese e-Store. It sells hot and trending products across the globe. Their products range from phone and electronics to fashion, jewelry, shoes, bags, and many other items. You can find almost anything here at a very cheap price.

The delivery time of LightInTheBox is also similar to AliExpress as their warehouses are located only in China. But, you may get a faster shipping time due to having fewer orders to ship. You can pay for your orders with PayPal, Western Union, or your credit card.

2. WISH

Wish is a widely popular online marketplace where you can buy almost anything. From clothing to footwear, electronics, healthcare items, and many more things, you can get them all for an incredibly cheap price. They are also known to offer great deals and coupons to their new customers.

Their shipping time is also faster than AliExpress as their products come from sellers located in small countries. Wish also provides an advanced rating system that is very helpful for both the consumers as well as sellers. It helps promote good ones.

3. OVERSTOCK

Overstock is a US-based online marketplace. It makes profit by selling wholesale products at a highly cheap price tag. A major portion of their stock is comprised of overstock from the major retailers or their seconds. You can find some really amusing deals here. The shipping time will also be lower as compared to the Chinese marketplaces. You can get your items within a week.

The product range of Overstock is incredible. You can find everything such as clothing, decor, kitchen appliances, and many more items. You can even find furniture and other big home items. So, you can use to fill your house with great stuff at a reduced price.

4. DEALEXTREME (DX)

DealeXtreme, more popularly known as DX, is an amazing online marketplace. The website works in a very similar manner as ‘Wish’ and sells cheap products coming directly from sellers. It has partnered with many small businesses and sells its products to a wide base of audience.

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The shipping time is a problem with DX also because their warehouses are located in China. Apart from this, you can get some really worthy deals on DX. You should always keep an eye on their clearance sales for the best prices.

5. GEARBEST

Gearbest is the perfect AliExpress alternative if you are looking to shop for the latest gadgets or electronic devices. It works with over 5000 Chinese brands and top suppliers to deliver the best products. It has products from top Chinese companies such as Xiaomi, Huawei, Lenovo, and many others. But, it isn’t just an electronic store.

You can also find a massive range of other products as well. The prices available on GearBest are reduced, and you can even reduce them with the available coupons. They also have warehouses in multiple countries. So, you can get faster shipping from the local warehouse.

6. BANGGOOD

BangGood is another Chinese e-commerce platform that provides worldwide shipping of cheap goods. You can find almost anything on this website, from clothing to electronics, and even home items. The prices available are marked down from their original prices. You can also get amazing deals during special clearance sales.

BangGood provides a free $20 coupon to every new user. The shipping time for BangGood orders is faster than AliExpress for certain products. However, the regular shipping time is similar.

7. CHINABRANDS

ChinaBrands is a widely popular Chinese e-Store where you can buy products at wholesale prices. You can find almost anything on this website at a highly affordable price. Their shipping prices are also low but you will get a long shipping time. It is the perfect website for buyers who want the lowest prices but can wait for their orders for at least a month.

Most of the ChinaBrands sellers run their factories from China, and their warehouses are located there only. This is the reason for the considerably long shipping time.

8. BONANZA

Bonanza is a unique American online marketplace where you can find a great range of products. They have over 20 million items from more than 50,000 sellers. It is a growing e-commerce store where even you can sell your items. It is a preferred platform by more than 20,000 entrepreneurial sellers. You can find some really amazing handcrafted items and collectibles here.

For people looking to shop regular items, this store may disappoint you a little. The prices of some items may be a little higher than some Chinese stores. But, the quality provided will be worth it.

21 ALIEXPRESS ALTERNATIVE STORES

Here are 21 AliExpress Alternatives that you can use to shop online.

  1. LightInTheBox
  2. Wish
  3. Overstock
  4. DealXtreme (DX)
  5. GearBest
  6. BangGood
  7. ChinaBrands
  8. Bonanza
  9. DHGate
  10. TinyDeal
  11. Target
  12. MiniInTheBox
  13. GeekBuying
  14. Jet
  15. TomTop
  16. Target
  17. MadeInChina
  18. American Greenwood
  19. Walmart
  20. eBay
  21. Amazon

FINAL TAKE

AliExpress is amazing but it is always good to have options when you are shopping. So, these are the 21 best sites like AliExpress. If you ever feel like you should look somewhere else, these are some stores that you should visit. You can also use these for your dropshipping business if you are an aspiring entrepreneur. Make sure you have a solid plan before beginning.

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