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Brexit drives British firms to Germany: Report

The number of British companies in Germany is rising due to Brexit, a new report states. Meanwhile, the southern state of Bavaria is planning to open an office in London in a bid to strengthen links.

Published: 13 May 2019 11:18 CEST
Updated: 13 May 2019 12:34 CEST
Brexit drives British firms to Germany: Report
Frankfurt am Main skyline. Photo: Depositphotos/phillipus

In 2018 more foreign companies than ever before opened up businesses in the Bundesrepublik, according to research by Germany Trade and Invest (GTAI).

The economic development agency of the Ministry of Economic Affairs reported that 2,062 companies launched or expanded in Europe's largest economy last year. That's an increase of 8 percent from the previous year.

SEE ALSO: How Brits in Germany can make the most of the Brexit delay

According to the GTAI, 17 percent of the companies use Germany as a production and research location.

The US holds its position as the top investor country leading the way with 345 investment projects – also a new record. The Americans were followed by Switzerland (229 projects), China (188) and the UK (168).

The report also showed that since the Brexit vote in 2016, the number of British firms established in Germany has risen by 34 percent, with the UK's decision to leave the EU deemed a key factor in the development.

In contrast, the German market seems to have become less desirable for Chinese investors. The number of Chinese companies establishing firms in Germany fell by 33 percent during the same period.

“These figures conclusively demonstrate that Germany is a popular investment location for foreign companies,” said Robert Hermann, CEO of GTAI.  

“It is particularly noteworthy that never before have so many British companies settled in Germany as last year.

“We asked them why and for almost half of the companies – 45 percent – Brexit was one of the reasons.”

As The Local has reported, Frankfurt, Germany's financial hub, has seen a rise in the number of firms relocating there following the Brexit decision.

According to the GTAI, the most popular sectors last year were corporate and financial services, followed by ICT and software, consumer goods, mechanical engineering and parts manufacturing.

“Many investors appreciate the positive environment for establishing a business in Germany,” Hermann added. “The size of the German market and its position within the EU are also powerful arguments.”

SEE ALSO: Opinion: Why Germany struggles to understand the issues at heart of Brexit

Bavaria to open office in London

It came after authorities in the German state of Bavaria revealed they are to open a “large office” in London because the region is eager to “maintain relations between Bavaria and Britain in the future”.

Britain is the fourth largest export market for the southern state, which has a strong car and plane making industry.

State premier Markus Söder said whatever happens with Brexit “we want to send a signal of understanding, togetherness, and of better relations”.

Söder made the comments last Thursday at a banquet held in Munich for Prince Charles and his wife Camilla during their visit to Germany.

The premier also gifted the couple with a pair of baby Lederhosen for their new grandchild, Archie Harrison, son of Prince Harry and Meghan, Duchess of Sussex.

Markus Söder and his wife Karin Baumüller-Söder gift the Lederhosen to Prince Charles and his wife Camilla. Photo: Joerg Koch/Bayerische Staatskanzlei/DPA

In his speech in German, Söder praised the visit of Prince Charles, the heir to the throne, as a very important signal for fostering good relations between Germany and the UK.

But he also stressed that he would “very much like to see the UK stay in the European Union”.

The new deadline for Britain leaving the EU has been set for October 31st, however Prime Minister Theresa May is hoping she can get a withdrawal agreement through parliament before this date.

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WORKING IN GERMANY

Five things to know about salaries in Germany

Finding a job is typically a top priority when planning a move to Germany. The country boasts the third largest economy in the world and a continuing need for skilled professionals. 

Published: 2 May 2024 12:26 CEST
Five things to know about salaries in Germany

If you are moving to Germany, you might soon start looking for a job in the country. However, like many other aspects of living abroad, there are several cultural differences and specificities when it comes to job hunting in Germany – especially when it comes to salaries.

Here are five things to know about salaries in Germany.

There is a minimum wage in Germany

Germany’s minimum wage of €12.41 per hour, pre-tax came into effect at the start of this year. This amounts to a monthly salary of €2,054 which ranks ninth in the world. The minimum wage will rise again in 2025 to €12.82 per hour before tax deductions.

There have been calls recently to hike the salary up higher to €14 per hour.

READ ALSO: Millions of workers in Germany ‘earning less than €14 per hour’

Find out salary expectations

Germany does not require companies to list salary ranges for listed positions. But that may be changing soon. The EU parliament passed a wage transparency law to require companies to publish annual reports detailing wage and wage discrepancy information. The rules, which are set to go into effect in 2027, are intended to help close the gender pay gap. 

In the meantime, employees can utilise online resources to find industry averages and expectations for different roles:

  • Gehalt.de offers users access to salary information on more than 800 professions
  • Online platform, Kununu provides compensation information and employer reviews to users in the DACH region  
  • Berlin residents can utilise REDSOFA’s salary survey for an overview of salary averages in the country’s capital city

As of April 2023 the average gross monthly salary was €4,323 according to Germany’s Federal Statistical Office.

Two-thirds of full time workers make less than this average monthly salary and one-third of workers earn more than this average monthly salary.

While wages after deductions may be less than similar roles in other countries, it is also important to take into consideration what other benefits come with a salary. Paid holiday leave, pension contributions, long notice periods and annual bonuses can help make up some of that difference. 

READ ALSO: How much do employees in Germany typically earn?

Check your payment schedule

Internationals can usually expect their salary once a month when working in Germany. Many German companies choose to pay employees either on the 1st or 15th of the month. It is also important to note that most employees can expect to receive their first pay check within 30 or 45 days of starting. 

For positions that offer yearly bonuses, these payments are included in a 13th pay check which are subject to income tax.  

A person works on a laptop.

A person works on a laptop. Image by Bartek Zakrzewski from Pixabay

How many hours do you work?

When looking for a job, don’t forget to check how many hours you can expect. Job descriptions will include expectations for time commitments. 

Mini-jobs, as expected from the name, are limited in hours and pay. Employees can expect up to €538 per month. Mini-jobs do not provide social security because they do not require social security contributions. Employees are also not automatically covered by health and nursing care insurance. 

Teilzeit, or part time jobs, are defined as any job where working hours are less than a full time position.

A common misconception is that part-time work requires working 20 hours or less a week. But an employee working five days a week for 30 hours, at a position that is typically 40 hours when full time can also be defined as a part time worker. 

READ ALSO: The rules in Germany around ‘mini’ and ‘midi jobs’

In fact, Germany has a term for workers who work between 28 and 36 hours a week. Vollzeitnahe Teilzeit, or nearly full time part time workers, can be a popular choice for some people, including parents. These positions can give employees more flexibility to balance work and family responsibilities. It is important to note that these workers are paid according to their time worked, so it will still amount to less than full time.

Depending on the work schedule, part time employees can earn the same amount of vacation as their full-time counterparts. That’s because holiday leave is calculated based on days worked, not hours. If a part time worker comes in five days a week, they will be eligible for at least 20 days of holiday. If that same part time worker comes in three days a week, they will be legally entitled to twelve days of vacation, even if they worked the same hours as the other employee. 

In most companies, weekly working hours between 35 and 40 hours are considered full-time employment or Vollzeitbeschäftigung. 

Watch out for the gross v. net difference

Before you sign the dotted line, it will be important to check how much of your gross salary you’ll be able to keep come pay day. Companies that include salary expectations in descriptions include gross salary (Bruttoeinkommen) – not the net income after taxes and deductions (Nettoeinkommen). The amount deducted will depend on how much you earn, the tax class you’re in and on other factors such as how much you’re paying for healthcare but it is usually around 40 percent. 

Salaried employees can find information on the deductions on their pay slip. Some to expect to see include:

  • Taxes are deducted directly from the gross pay. The amount is based on the tax bracket your salary falls within 
  • A percentage of your gross salary is also deducted for your pension / retirement contributions
  • Church taxes between eight and nine percent of your salary will also be due if you are affiliated with a religion
  • Unemployment insurance amounts to a 2.5 percent deduction from your gross salary. It is important to note that the insurance covers a salary up to €90,600 
  • Health insurance contribution rates are typically split between employers and employees. The rate depends on the provider. In 2024, the TK contribution rate to health insurance is 15.8 percent of the gross income

READ ALSO: What you need to know about your payslip in Germany 

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