Country Overview

Country Overview

Authors: German Startups Association

When coming to Germany to start a business, it is useful to know some basic facts, which can help to put the new business place into perspective and manage everyday life more easily.

 

1. Basic Facts

Population: 82 522 million
GDP: 3.263.35 Billion Euro
GDP growth (net): 2.2%
Unemployment rate (as % of economically active persons): 3.7 %
Labour force: 43.3 million
Inflation rate compared to previous year (2017): 1,7%
Currency: Euro €
Number of university students: 2.8 million (2017)
Number of self-employed business men/women: 3.65 million (2016)
Diversity: 18.6 million people with migration background

 

2. National Holidays and Workweek

A good work-life balance is an important requirement for most employees in Germany. A normal working day is not allowed to exceed 8 hours as averaged over 6 months, and a normal working week is from Monday to Friday. In 2016, a full-time employee worked 38,1 hours a week on average. Part-time employment had an average working week of only 16.4 hours on average. Combining these numbers, Germany is among the countries with the lowest working hours in Europe.

In addition, there are 9 national holidays guaranteed in all 16 federal states:

New year – January 1st
Easter Friday – varies every year
Easter Monday – varies every year
Labour day – 1st of Mai
Ascension Thursday – Easter Sunday + 39 days
Pentecost Monday – Ascension Thursday + 10 days
Day of German Unity – October 3rd
First Christmas day – December 25th
Second Christmas day – December 26th

Nevertheless, each federal state is free to determine additional religious- or state holidays. On Sunday most supermarkets and shops are closed, and people largely do not work, but take time for themselves and their families. Nevertheless, some stores located at train stations, petrol stations, and come small convenient stores (kiosk) are open. Furthermore, most restaurants are open on Sundays – they often take a break on Mondays instead.

 

3. Cost of Living

On average, the living cost of a German private household is 2,391 (2015) Euros per month. Across Germany, living expenses vary from one state to another, with the eastern cities, such as Berlin, under the national average. Cities like Hamburg, Munich and Frankfurt are among the most expensive to live. Housing costs amount to the highest proportion of living expenses with 877 (2016) Euros per month, including energy and maintenance, for an average household. German households on average spend 342 Euros in food, beverages and tobacco per month (2016), while 335 Euros (2016) is spent on transportation.

 

4. English Proficiency

Most of the everyday life in Germany involves speaking German, and the locals appreciate foreigners trying to speak at least some German, even if it is just small words like Danke (thank you) and Bitte (please; you are welcome). However, English is a essential part of the business and startup scene where English as a business language is spoken fluently. According to the EF English Proficiency Index, Germans have “good knowledge” of English. This means that one can always communicate in English, especially in big, international cities.
Furthermore, almost every 10th founder is not German and 28,6 % of Startup employees have a non-German background. For Berlin, this figure even rises to 47,7 %. Therefore, the Startup scene is characterized by the frequent use of the English language.

 

5. Transportation and Mobility

When it comes to traveling between cities, the national railway company (Deutsche Bahn) offers train services all across the country, and “Saver fares” and group tickets offer opportunities to save money. For frequent travelers, it might be interesting to look at the different BahnCard offers, where one subscribes and pays a fixed price per year, and receives additional discounts and benefits in return  (https://www.bahn.com/en/view/offers/bahncard/bahncard.shtml)

Another option for travelling between cities are line buses like Flixbus, which are less expensive, but also slower than the trains. Furthermore, car-pooling through the BlaBlaCar App has become very popular in Germany.

For travelling within cities, even medium-sized cities have a relatively well-developed public transportation system based on buses, subways, trams, urban trains and even car-sharing. If one plans to stay in a city more long-term, it is recommended to get a subscription, for instance in the form of a monthly season ticket. These can be purchased at the municipal public transportation provider, which differs in every city. In Berlin, it is called BVG (https://www.bvg.de/en/Welcome)

As long as they do not formally reside in Germany, Indians can drive with their international driver’s license.
However, as soon as one becomes a registered resident in Germany, there is a time limit of six months to translate the Indian license into a German one. This time period cannot be extended, and if it passes, one is no longer allowed to drive on German roads. It is, thus very important to start the translation process in time. For Indian nationals, it is not necessary to take any additional tests and the transcription procedure has been simplified. The application has to be filed with the authorities of the city where one is registered, and by means of a personal appointment. The following documents are needed at the appointment: Passport, a recent biometric photo, original license (not a copy), which needs to be valid at the time of transcription and a Translation of the license, if it is not in English or German language.

Having a valid German (or EU) drivers’ license is also important to make use of car-sharing, which is very popular in the larger German cities and more populated areas, and is useful for short distance trips. There are a variety of providers depending on the place of residence and personal needs. The Free2Move App allows access to all main providers in one’s area.

 

6. Forms of Payments 

In 2017, the exchange rate between Euro (€) and Indian Rupee (INR) remained relatively stable around 80 INR to 1 Euro. The quickest and cheapest way to get money is at an ATM (Geldautomat). There is also the option to exchange currency at banks or exchange bureaux.

Germany is generally considered a cash country. 51, 3 % of all retail sales were generated by cash money in 2016. However, the role of cash in Germany has constantly been decreasing in recent years. In line with this, in most shops, one can pay with debit- or credit card. Contrary to India however, many stores and gastronomies only accept cash, and some accept direct debit only with a minimum amount.

Most services and goods in Germany are charged with a 19 percent value-added tax. Since the price of a product usually already includes the VAT rate, there is no need to worry when paying for services or goods beforehand.#

 

7. Indian Expat Community

According to the German Statistics Office, there were 45,638 Indian citizens living in Germany at the end of 2015, out of which 2,772 were living in Berlin. With the growth of the community, Indians in Berlin have also become increasingly well-organized. There is a plethora of websites and Facebook pages, including recurring events, like:

Indians in Germany:
https://www.facebook.com/groups/192587635345/?ref=br_rs
https://www.facebook.com/groups/229408190415265/?ref=br_rs
Indians in Berlin:
https://www.facebook.com/groups/IndiansInBerlin/?ref=br_rs
https://www.facebook.com/groups/Indians.in.Berlin1/?ref=br_rs
Indians in Hamburg:
https://www.facebook.com/groups/391009517731440/about/