By：King&Wood Mallesons

Investment environment in Germany

Germany is one of the world’s most attractive investment destination due to being

  • located in the center of Europe;
  • the fourth-largest economy as well as the second-largest exporter and third-largest importer in the world;
  • an increasingly close trade partner;
  • one of the most technologically advanced countries.

Chinese investment in Germany

Germany is China’s premier trade partner in the EU. In spite of temporary fluctuations, the volume of trade between China and Germany is anticipated soon to reach a total balance of EUR 200 billion p.a. These strong trade volumes are generated by global players from both countries leading in their respective industries.

Against this backdrop it comes as no surprise that both countries are a significant source and destination of foreign direct investment (FDI), as these enterprises look at strengthening their market positions by international M&A activity. Consequently, the number of M&A deals by Chinese investors in Germany has grown rapidly in recent years.

There are numerous examples of successful Chinese investments in the German market. Through successful M&A transactions, Chinese investors have not only gained access to advanced technology, but also to the European market in general.

In 2012, Germany was already among the top global recipients of Chinese FDI, second only to the US, and the long-term trend points towards a further steady growth – in spite of a temporary dip in 2018. The number of Chinese acquisitions of German companies has increased markedly in recent years, from eight acquisitions in 2010 to twenty-five in 2013 and stabilizing at an average of about 35 over the last three years. Germany is thus the most attractive European investment destination for Chinese buyers along with the UK.