Moving to Germany
A solid economy has sparked people around the world to consider moving to Germany
Germany is situated in central Europe, and the country's official name is Bundesrepublik Deutschland (Federal Republic of Germany).
The German Flag
This tri-color flag was originally designed in 1832 and became the official flag of West Germany on May 23rd, 1949. It is commonly thought to signify the uniforms of the German soldier's that fought during the Napoleonic Wars. Three equal, horizontal stripes - the first is black, representing the black coats; the middle is a red stripe, based on the red braids on the uniforms; and the bottom gold stripe, for the gold buttons on the military attire.
Two World Wars engulfed Germany during the first half of the 20th century. Germany was occupied by the triumphant Allied powers of US, UK, France and the Soviet Union during 1945, at the end of the Second World War which left the country in ruin and destruction. The year 1949 brought about the division of Germany into two states – The democratic Western Federal Republic of Germany (FRG) and the communist Eastern German Democratic Republic (GDR). The opportunity for the unification of Germany, which officially transpired in 1990, emerged due to the end of The Cold War and the weakening of the USSR.
Germany is a Federal Republic of 16 states, governed by administrative divisions. Basic Law is the constitution of the united Germany as from 3rd October 1990. The country is governed by executive and legislative branches.
The executive branch consists of the chief of state (presently President Horst Koehler), a head of government (presently Chancellor Angela Merkel) and a cabinet (Bundesminister) of federal ministers appointed by the President on the recommendation of the chancellor. The President is elected for a 5-year term (which can be extended to a second term) and The Chancellor is elected for a four-year term. The next elections are due to be held in 2009.
The Legislative branch of government has a bicameral Parliament. There is the Bundestag (a Federal Assembly) and the Bundesrat (Federal Council). The Bundestag has 614 seats elected by popular vote in a mixture of direct and proportional representation. There is no election for the 69 Bundesrat seats which is liable to change every time one of the 16 states has an election.
The legal age for voting and 9-month compulsory military service obligation is 18 years of age.
Geography and Climate
Germany is located in central Europe and it's border countries are Austria, Belgium, Czech Republic, Denmark, France, Luxembourg, Netherlands, Poland and Switzerland.
The country is divided up into the North German Plain, the Central German Uplands (Mittelgebirge), and Southern German Highlands. An important area is the Bavarian plateau in the southwest of the country. Here the country rises from only 488m above sea level to the Zugspitze mountains which are the highest point in Germany at 2,962m.
Its major rivers are the Danube, the Elbe, the Oder, the Weser, and the Rhine.
One could compare Germany with the state of Montana in the U.S.A. to get an idea of its size.
The weather is temperate; cool, wet winters and summers with irregular mountain (foehn) wind.
People and Culture
Germany is not only large in size, it is heavily populated, numbering 82,400,996 according to July 2007 estimate. This makes it second only to Russia as the most heavily populated country in Europe.
Sport - The German Sports Federation (Deutschen Sportbund - DSB) is responsible for the running of thousands of sports clubs throughout the country. They endeavor to meet the needs of participants from leisure sportsmen to elite athletes. Ballgames lead other sports in popularity – football, tennis, volleyball or basketball, and baseball is gaining popularity.
Doing business in Germany
The business languages in Germany are German and English. It is usual that at business conferences, over and above the set meetings, the parties will get together in an informal way over the lunch or dinner table. Germans generally act formally even in an informal setting and they expect their visitors to take the same approach. The German businessman also tends to separate his business and private life and will prefer not to discuss personal matters with fellow businessmen.
A business lunch is usually of a formal nature and casual wear is not suitable. It is common to shake hands with business associates or friends in Germany. A business lunch or dinner will be formal and normal good table manners are expected. One should take advantage of the friendly setting of a meal to establish good relations with people one hopes to do business with, and it helps to understand the earnest and precise nature of ones host.
The growth of the Germany economy has had to struggle against the conditions pertaining during the Cold War when the West and East were divided, and the communist style economy in the East in no way kept pace with the western part of the country. However the various governments have made giant strides to introduce reforms that would benefit the country as a whole and bring it in line with current business and labor practices in Europe. The German economy is technically very advanced and regulations governing retirement age, women in the workplace and advanced methods have led to a lowering of the unemployment levels and an improved growth rate. In 1990, Germany, along with 10 other European nations, introduced the Euro, a common European currency.
Figures from the German Office for Foreign Trade (bfai) state the unemployment rate in 2007 is forecast to reach 8%, and rise to 7.8% in 2008; the average wage in Euro per month in 2006 was 2,221.
Germany’s economic policy in recent years has shown significant results. There has been a sustainable growth in the economy and growth in employment. Germany is among the top 5 most competitive economies worldwide and this makes it a player to be reckoned with in the economic sphere.
Germany’s central bank, The Bundesbank, has a reputation for stability, which has effectively resulted in stable prices and exchange rates for a long time. This and negotiation of long-term collective wage agreements between unions and employers has been of prime importance in developing a strong economy, along with legal and political stability.
German Corporate Tax Reform 2008
Taken from the German Business Portal:
The new tax reform was approved by the German government on July 2007, and will become effective on January 1, 2008.
German Office for Foreign Trade (bfai) - E-Mail: email@example.com Site: www.bfai.de
The German Federal Statistical Office (Destatis) offers regular statistical information about Germany and its economy - DESTATIS - German Federal Statistical Office
Eurostat, the Statistics Office of the European Commission offers latest national and European market pointers showing Germany's position as one of Europe's largest economies - Eurostat - Statistics Office of the European Commission
Germany is leading industrial nation, very technically advanced, and also making use of its natural resources such as iron ore, copper, nickel, uranium, potash, lignite and natural gas; it also boasts arable land and fine timber. It is an important exporting and importing partner of countries throughout the world. The fine industrial industry produces very desirable products such as machinery, vehicles, machine tools, electronics and has a market for its iron, steel, coal cement and chemicals. It produces excellent food and beverages, textiles and a shipbuilding industry. In addition to exporting these high quality products, it imports machinery, vehicles, chemicals, metals, foodstuffs and textiles.
It is important to understand that Germany’s vast industrial strength depends upon imports as well as its exports to fuel its ability to be a major player as a great processing industry. Germany is a known leader in the automobile industry, mechanical engineering and chemical sectors, and in recent years there has been a growth in renewable energy and nano and biotechnology sectors. This step into modern technology has strengthened Germany’s status as a factor of importance in the world economy. It is interesting to note that while the importance of large companies in the industrial sector is significant, 98% of the industrial activity is generated by small and medium size companies.
Germany understands that a highly developed infrastructure is required if a country wishes to be integrated into world markets. To this end, it has encouraged the development of a dense railway system that compares favorably with other countries and boasts more than 12,000 kilometres of motorway.
The Frankfurt and Munich airports are among the top ten airports in the European Union.
There are a number of international airports with good domestic connections and to Europe and the world.
Communications and Media
Since the Cold War and the unification of West and East Germany after World War II, Germany has poured huge resources into the telecommunication system of the East, to bring it into line with the technologically advanced system in the West, so that today the whole country is linked to one of the most modern systems in the world.
Domestically, automatic telephone exchanges are fitted with the most advanced cable, radio and satellite systems. The cellular telephone service has kept apace with other countries and is growing at a fast rate, with roaming service to many countries abroad.
Land and undersea cables and earth stations in the satellite systems (Inmarsat, Intelsat, Eutelsat, Intersputnik) ensure that Germany can provide excellent international telecommunication services throughout the country.
Germany's internet domain: .de
Germany's international dialing code: +49
Immigration Rules / Employment
If you wish to enter or reside in Germany you may first need to procure a visa. Non-EU and non-EEA should check this issue beforehand with the German embassy or consulate in their home country. However, resident's of EU and EEA countries do not require a visa, but must register with the resident's registration office. There are various types of visas and it is important to check which type is relevant to your requirements
If you are interested in working in Germany, you must first check your right to live and work in the country. If you are a EU citizen there are of course no conditions to minimize your right to live and work in Germany.
A non-EU-national who wishes to accept employment in Germany must state this fact when applying for a visa at the Germany Embassy or Consulate in his home country. The German labour administration will have to approve such a visa with work permit before it can be issued. They will most likely require the name of the employer and the applicant's intended address of residence in Germany.
The following citizens are exempt from applying for a visa in advance, and they can do the paperwork for the work visa with the German authority when they are already in the country: Australia, Israel, Japan, Canada, South Korea and the United States of America.
Generally, citizens of new EU member states - the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia, and Slovakia (except Malta and Cyprus) which joined the European Union on May 1, 2004, and Bulgaria and Romania which joined on January 1, 2007, do not need a visa to enter Germany. To obtain a work permit (Arbeitsgenehmigung) for paid employment, they must apply at the local Employment Agency (Arbeitsagentur).
Federal Ministry of Labour and Social Affairs
EUROPA - EURES - the European Job Mobility Portal
If you are planning to do business in Germany, you must first clarify whether you plan to be a freelance, start a small business or wish to work as a skilled craftsman.
In order to obtain a tax number which is needed for a freelancer, register with the Tax Authority Office
(Finanzamt) of the municipality in which you wish to work.
To operate as a small business, the business must be registered at the local Trade Office (Gewerbeamt) which will automatically make you a member of the local Chamber of Commerce.
Before you are allowed to offer services as a skilled craftsman, your qualifications must first be recognized by the chamber of skilled crafts, and in addition you must register in ZDH -The German Confederation of Skilled Crafts
. Since 2004 not all trades require a master diploma or "Meister" if you wish to be a self-employed craftsman and craftsmanship has since been divided into restricted and unrestricted trades (Trade-and-crafts-code
If you have intentions of setting up a large business it is required that you register the business in the Commercial Register
as well as the local trade office.
The beginning of the process of registering a business in Germany starts at the local trade office, whom will inform all the appropriate authorities of the registration of your new business. It is advisable to follow-up with these authorities to be sure that they received the notification:
The tax office
Setting up a business
The accident insurance fund
The chamber of industry and commerce
The chamber of crafts
The local court (trade register)
The trade supervisory office
- The Federal Ministry of Economics and Technology gives in-depth information for those wishing to start a business in Germany.
For information to help you choose a suitable tax consultant for your new business, go to:
The Federal Chamber of Tax Consultants
The German Association of Tax Advisors
Foreigners who work in Germany may be subject to payment of tax in Germany as well as their country of origin. For issues regarding double taxation
see Double Taxation Agreements
(in German) on the German Federal Ministry of Finance website.
ILO - German labour regulations
Social Security System in Germany
Germany's social security system is obligatory for most employees which will afford them important benefits such as a pension scheme and health insurance. However, some employees may choose to remain covered by their home country's social security system, and to this end Germany has signed bilateral agreements with several nations.
The National Health Service
Health insurance is a part of Germany's social security system, and is mandatory for all employees and students in Germany.
The most common is the State health insurance (Gesetzliche Krankenversicherung (GKV) / Krankenkasse) which offer out-patient care and in-patient hospital care and basic dental care. This health insurance which will also cover your non-working family members residing at your address, at no extra cost. Residents earning under a certain gross salary threshold, are obligated to join this type of health insurance. The providers of this government health scheme are non-profit associations, that must follow strict government guidelines. Therefore, they are obligated to offer you at least the minimum services you are entitled to. When it comes to special programs and administrative handlings for example, you may find some differences between the various providers.
Since 1996, one is entitled to select the state health insurance of his/her choice.
Government long-term nursing scheme (Pflegeversicherung) is part of the State Health Insurance and covers part of the costs for nursing in cases of severe disability in the future.
Private health insurance (Private Krankenversicherung or PKV) will usually give you options of private or semi-private hospitalization, treatments that are generally not offered under the State health insurance scheme, no additional co-payments (Zuzahlungen) for medicines, etc. Private insurance will most probably cost more for certain risk-groups due to higher medical expenses on average for these groups.
There are lower cost insurance schemes tailored for students.
Long-Term Care Insurance (Pflegeversicherung) became as of January 1995 an integral part of the social insurance system in Germany and is mandatory for all. Anyone with State health insurance is automatically covered by Long-Term Care insurance too. It is acceptable for citizens with statutory health insurance by choice to opt having the long-term care insurance separately with a private insurance company rather than under the State insurance.
– All about health-related subjects - Germany
Opening a Bank Account
EU/EEA citizens get a Freizugigkeitbescheinigung (free movement permit).
EU citizens do not require a residence permit (Aufenthalserlaubnis).
Non EU/EEA citizens need to obtain a residence permit (Aufenthaltsgenehmigung or Aufenthaltserlaubnis) after getting a polizeiliche Anmeldebestätigung. For this you need to visit the Auslanderbehorde (authority for foreigners). Have your passport on hand.
Even if some banks agree to open an account for you without a polizeiliche Anmeldebestätigung, you will probably not be able to perform a few important bank activities.
If you are a student, bring papers to show this; you may not be charged with certain fees under student status – check beforehand when shopping for a bank.
Persons receiving a steady income in Germany are required to open a current account (Girokonto). Your employer will need your account number and sort code (Bankleitzahl) and this will allow your salary to be paid into your account.
Since the methods of paying bills by a check or a credit card is considered unusual in Germany, the Ueberweisung (transfer) form is worth familiarizing yourself with.
Banks in Germany will most likely encourage you to open in addition, an online banking account. The reason being that due to cutting costs, there are fewer local branches to be found.
Large German-owned banks:
- Deutsche Bank
- Hypovereinsbank (HVB)
- Dresdner Bank
- Saving banks – the Sparkassen
Bank operated by the Post Office – Postbank
Famous People of German Origin
Albert Einstein, the great mathematician and physicist of the 20th century, was born on 14 March 1879 in Ulm, Germany. His works include the special theory of relativity, quantum of light and the photo-electric effect, Brownian motion of particles and atomic theory, the equivalence of mass and energy, quantum theory for solids (specific heats) and the principle of general relativity-gravitation is equivalent to acceleration. In 1921 he received the Nobel Prize in physics "for his services to theoretical physics and in particular for his discovery of the law of the photo-electric effect." Albert Einstein died on 18 April 1955 at Princeton Hospital in New Jersey.
Marlene Dietrich, the captivating, legendary actress of the 20th century began her world renowned fabulous film career with The Blue Angel in 1929. She moved to the USA in 1930 and continued to wow audiences with her stunning looks and magnetic allure. Dietrich died in Paris in 1992.
Living Locations / Key Cities
Germany's greenest city and also its' second largest is populated with the highest percentage of foreigners in Germany. This multi-ethnic city has shopping malls, wonderful promenades, trademark canals, gardens and rivers.
Germany's largest city and vibrant capital has so much to offer and is inviting to all types of lifestyles. This city offers economic, academic and entertainment opportunities. Modern shopping malls with many fashionable boutiques, dynamic nightlife and cafes alongside historical sites for which this city is well known. Berlin has two centers – West Center and Mitte (East Center). The west side of the city is more populous and where you will find most housing spaces.
Baden- Württemberg has a strong, pioneering policy for cracking down on crime and making this area a safe place to live in. There are programs in place targeted at the elderly population to help keep them active within society. Other projects here include emphasis to support families in purchasing their own homes renovation of old buildings. A high percentage of the Baden- Württemberg population are involved in volunteering initiatives which is proportionally higher than in any of Germany's other federal states.
North Rhine-Westphalia (NRW)
This region lies in the west of Germany and is very heavily populated. It's capital is Düsseldorf and there sits the state government. NRW was once the center of the German mining industry and today is a major industrial region and technology center. This region has the most universities and research institutes in the whole of Europe.
Renting or Buying a Home
Find hotel accommodation in any part of the country for a short-term stay in Germany should not pose a problem. However, if one is interested in finding long-term accommodation, it is important to understand that prices and availability vary considerably in different areas. The eastern parts of Germany, including Berlin, have more rental property available than in the country’s west and south. The highest rents in Germany are found in Munich, and are also high in Stuttgart, Dusseldorf, Wiesbaden and Cologne.
Education in Germany
Primary education (Grundschule) is four years except for Berlin and Brandenburg where it lasts six years. Secondary education is obligatory and is free until grade 10, and there are four types of general secondary schools: Haupschule, Realschule, Gymnasium and Gesamtschule. From the 10th/11th grades on pupils can choose to attend full- or part-time vocational schools. The type of school differ according to Länder (German State).
Public and private Higher education institutions exist around Germany:
universities (Universitäten) and their equivalent: Technische Hochschulen/Technische Universitäten, Universitäten-Gesamthochschulen, Pädagogische Hochschulen;
Colleges of art and music (Kunsthochschulen and Musikhochschulen);
universities of applied sciences (Fachhochschulen)
company training centers (Verwaltungsfachhochschulen).
Higher education is divided into stages:
Non-university level (technical/vocational) education lasts for a period of three to four years and includes practical training. Finishing the course successfully will earn you a professional title in your specialization. The Höhere Fachschulen and Akademien, are institutions that provide technical courses to students with two years or more practical training experience. Universities of applied sciences offer courses in Engineering, Economics, Social Work, Business Management, etc. The students who succeed in their examinations are awarded by all the institutions Diplomas/Degrees of qualification in their profession.
University level first stage (Grundstudium) education lasts four semesters (two academic years) at university and studies end with an examination that will allow you to continue to the university level second stage. This stage does not give you a degree.
University level second stage (Hauptstudium) education is more advanced and lasts five semesters; Success in the final degree examination will award you with a Diploma.
University level third stage: Doctoral studies (Promotion) lasts between two to four years in which independent research must be carried out and a thesis submitted.
Lifelong higher education is very much encouraged in Germany, and 13 Länder have regulations regarding academic level continued education. These regulations permit employees in most Länder to take off a specified number of days a year for the purpose of continued education.
Citizenship in Germany
To become a german citizen you have to be a German resident for at least 8 years and meet the following criteria:
Valid residency permit;
Legal resident in Germany for 8 years;
Livelihood guarantee (there are exceptions);
Knowledge of the German language;
Oath on the German constitution;
Give up you former citizenship (there are exceptions);
Spouses of German citizens may be naturalized if they have been married for two years and the spouse has resided in Germany for three years.
German citizenship is established by inheritance from parents. A child of a couple whom are both German is a citizen at birth. However, for a child whose parents are both foreigners to obtain citizenship, at least one of the parents must prove an 8-year legal residency period, and that he/she has a valid Aufenthaltsberechtigung or has had an unbefristete Aufenthaltserlaubnis for a period of three years. At the age of 18 years the child will have to decide which of the citizenships he/she wishes to keep.
EU citizens do not have to change their driver's license.
For non-EU citizens, driving with your home country's driving license is legal for a period of first six months in Germany.
Some countries and American states have a license exchange agreement with Germany and you have three years in which you can do the swap. In order to make the exchange as smooth as possible, check with the appropriate office in advance exactly what the documentation requirements are. You will most probably need an eye examination and an official translation of your home license.
Those who come from country's without such an agreement in place with Germany, or have missed the three-year deadline, will be required to do written and practical examinations. If you have been in Germany less than three years you will only be required to do the written and driving tests. Over three years will require you take driving lessons too.
To bring a cat or a dog into Germany requires a lot of paperwork, so you should start the process as early as possible. Proof of rabies' vaccination dated 30 days to one year before your pets arrival into Germany must be presented at the border. To bring in more than three animals will require a special import license and dogs specifically have to be licensed in Germany - the cost varies.
EU pet owners need to obtain a pet passport for their animals, required for entry of an animal into a EU member state. This will include a microchip or tattoo number for identification and records of medical treatments and vaccinations. These EU passport regulations are also applicable to animals traveling to EU member states from other countries.
Restrictions have been put into force in all German cities, especially regarding dogs, and anyone planning to relocate with their animals should take the time to find out the specific regulations in the city you wish to reside in.
The christmas tree had its origins in Germany.
Albert Einstein was four years old before he uttered his first words.
The popular sport of bowling originated in Germany.
From the 2000 Tax Reform to the 2008 Corporate Tax Reform – consistent and palpable reduction of direct tax burden for citizens and enterprises
The 2000 tax reform has already significantly lowered the rates of the income tax and the corporation tax in several stages:
As a countermove, the tax base was broadened. The net result – in conjunction with other reform steps, including several rises in child benefit and tax-free child allowances as well as improvements in the allowance made for expenses incurred for statutory and private old-age provision – has been strong, long-lasting tax relief benefiting in particular employees and families with low and medium income as well as small and medium-sized unincorporated companies.
Right at the beginning of the new parliamentary term the German government realised a whole series of tax measures meant on the one hand to bring urgently needed improvements in the revenue situation of the public-sector budgets by further eliminating tax subsidies and exceptional arrangements and by curbing abusive tax strategies, while on the other hand creating growth impetus through targeted tax relief and opening up - 2 -
additional job opportunities in particular in private households. To this end, beginning in 2006, labour costs for the maintenance and modernisation of private housing, household services and expenditure for childcare will be tax deductible to a much greater extent than heretofore. This will promote many times the volume of investment in the private sector in the long run. Citizens and enterprises will benefit a great deal from this.
The figures clearly show that at the final count the overall picture is of tangible relief for taxpayers: The direct taxes owed by an employee family with two children and III/2 filing status decreased drastically between 1998 and 2006. in 1998 this family paid wages tax of €1606 on annual wages of € 24,704. This year they will have paid only € 914. Taking into account child benefit and social contributions, available income in relation to gross annual wages has risen from 83.3 % (1998) to 89.4 % (2006).
Germany needs corporation tax laws which are competitive and growth-oriented and which promote investment. Therefore the German government has put into effect a structural and growth-oriented corporate tax reform in order significantly to improve the fiscal framework conditions for joint stock companies and unincorporated companies. Based on an agreement on the general principles achieved among the ruling parties, on 25 May 2007 the 2008 Corporate Tax Reform Law passed on its 2nd/3rd reading in the Lower House of the German Parliament (Bundestag); after obtaining the approval of the Upper House of the Federal Parliament (Bundesrat) at 6 July 2007 the reform will enter into force on 1 January 2008 as planned. This reform will benefit all enterprises, thus also those in the small and medium-sized sector.
Current calculations, including those made by independent institutions such as the Centre for European Economic Research, show that the planned corporate tax reform - 4 -
will appreciably relieve the German economy. By improving its status as a fiscal location, Germany will make a big leap forward by international comparison. It is the view of the Centre for European Economic Research as well that it is above all the small and medium-sized enterprises which will be the big winners of the reform, for the rate cuts will have their full effect for enterprises of this size, while essential elements of the counter-financing will not affect them, since they will be exempt due to allowable deductions and tax-free amounts. Nor would the abolition of the declining-balance depreciation likewise planned cause any significant added tax burden.
The tax policy being followed by the German government with great steadfastness according to the principle “lower tax rates – broaden the tax base” affords relief to citizens and enterprises in equal degree, improves Germany's economic environment in international competition and at the same time furnishes public-sector budgets with an adequate, lastingly stable financial basis for meeting the challenges of the future.