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TECHNOLOGY

Germany aims to protect tech firms from foreign takeovers

Germany's economy ministry on Thursday said it planned to tighten rules on non-EU takeovers of hi-tech firms, against a backdrop of growing alarm about Chinese firms buying up German know-how.

Published: 28 November 2019 13:15 CET
Germany aims to protect tech firms from foreign takeovers
Kuka robots on display at the Hannover Messe, an international technology fair, in April. Photo: DPA

The ministry said it had drafted an amendment to the Foreign Trade Regulation that would allow the government to review or block foreign purchases of stakes as low as 10 percent in “critical technology” companies.

It would affect firms working in the areas of robotics, artificial intelligence, semi-conductors, biotechnology and quantum technology.

“It's not about banning acquisitions, but about being able to look at them more closely in cases where it concerns critical technologies,” the ministry said in a statement.

READ ALSO: Germany to tighten rules on foreign takeovers: report

The move goes further than previous efforts by Berlin to protect strategic firms from foreign acquisitions.

Economy Minister Peter Altmaier will unveil the proposal at a Berlin press conference on Friday.

Concern has mounted in recent years as Chinese companies have bought up or
purchased controlling stakes in high-tech firms, airports and harbours in countries across the European Union.

In Germany, the 2016 takeover of industrial robotics Kuka by Chinese household goods maker Midea sparked an outcry with critics saying vital technologies were being sold off to Beijing.

The German government responded in 2017 by announcing closer scrutiny of acquisitions by non-EU firms, doubling to four months the time for reviews, and strengthening its veto powers.

Berlin toughened its stance again last December with stricter rules to shield “critical infrastructure” sectors like energy, defence and telecoms from such takeovers.

Those regulations made it possible for the government to review purchases of stakes as low as 10 percent in such companies, down from 25 percent previously.

But it still did not cover companies like Kuka — something Altmaier's latest proposal seeks to address.

During a visit to Berlin in July 2018, Chinese Prime Minister Li Keqiang sought to reassure anxious Germans.

Investments from China “do not threaten your national security”, he said, stressing that Chinese firms wanted to learn from German “experiences and technologies”.

That same month, the German government took a minority stake in electricity
transmission firm 50Hertz, thwarting Chinese investors from buying into the
company.

READ ALSO: How Germany plans to zoom out of the digital slow lane (and why it could struggle)

A Kuka device is sold at a “Reused Goods Fair” in Karlsruhe. Photo: DPA

'Unequal fight'

In another case last year, Berlin came close to using its veto right for the first time to halt the sale of machine tool manufacturer Leifeld Metal Spinning to China's Yantai Taihai Corporation.

Yantai preemptively abandoned its bid, avoiding the need for a veto.

Germany is far from alone in trying to curb Chinese appetite for European firms.

Sweden's Volvo Cars, Italian tyre-maker Pirelli and the French holiday group Club Med have all passed into Chinese hands this decade.

From just €2.1 billion in 2010, Chinese direct investment into the European Union hit a peak of €37.2 billion in 2016, according to a study by the Rhodium research group.

The volume of Chinese investments has dropped since, as Beijing clamped down on overindebted firms and European governments scrambled to tighten regulations.

Much of the Chinese investment has come from state-controlled groups, the study found.

Economy Minister Altmaier said German companies were increasingly competing
against rivals who benefitted from state intervention and protectionist policies.

“This is an unequal fight that our firms are losing more and more,” he told DPA news agency.

Altmaier's latest push to curb China's buying spree comes as the German government faces pressure to exclude Chinese tech giant Huawei from developing the country's next-generation 5G mobile network.

READ ALSO: Auction for superfast 5G launches in Germany

Critics, led by Washington, say Huawei has close ties to the Chinese government and its equipment could be used to spy for Beijing.

Huawei has strongly denied the allegations.

Merkel has so far resisted the calls to ban Huawei from the bidding process, saying those involved in the 5G rollout would have to comply with stringent security standards.

But opponents accuse her government of bowing to the economic might of China, Germany's largest trading partner.

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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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