Germany Market Entry

By | July 23, 2022
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Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

According to cheeroutdoor.com, the Czech Republic is part of the European Economic Area. The Czech exporter mostly operates in an area with uniform standards on both markets. On the other hand, it enters a saturated market where it is convenient to gain a competitive advantage.

For up-to-date information on the conditions for entering the German market, visit the website of the trade and economic section of the Berlin Embassy (sections Information for exporters and investors and Employment of citizens of the Federal Republic of Germany in the Czech Republic).

Here you will also find the ” Export to Germany ” manual.

The most important information sources:

  • Ministry of Foreign Affairs ( MFA ): embassies in Germany Embassy of the Czech Republic in Berlin, Consulate General of the Czech Republic in Dresden, Consulate General of the Czech Republic in Munich and Consulate General of the Czech Republic in Düsseldorf;
  • Ministry of Industry and Trade (MPO): PaulTrade is the government pro-export agency of the Ministry of Industry and Trade. It is represented in Germany by the Foreign Office in Düsseldorf;
  • German Trade & Invest ( GTAI ): federal agency for the promotion of foreign trade and investment; iXPOS: it is possible to present your business offers;
  • The Association of German Chambers of Industry and Commerce IHK (Deutscher Industrie- und Handelskammer) for Czech entrepreneurs is an important chamber in Dortmund, which is authorized for relations with the Czech Republic
  • Czech-German Chamber of Commerce and Industry ( ČNOPK ), or German-Czech Chamber of Industry and Commerce (Deutsch-Tschechische Industrie- und Handelskammer/AHK)

In Germany, there are many consulting companies that deal with market research or assistance services. Overview of State Agencies.

Finding a customer, sales representative, or distributor

To enter the German market, you can establish cooperation with local businesses directly by looking for a suitable customer or German partner – in the role of agent or distributor. The largest internet B2B database is the ” Wer liefert was ” domain. The biggest platform for sales representatives is www.handelsvertreter.de

When choosing a suitable business partner, agent, or distributor, Czech Trade in Düsseldorf, or the pages of the German commercial register ( Handelsregister ), or links to trade and industry associations will help you. These unions, associations and associations play a big role in Germany, there are quite a large number of them and most companies are members of some association. Membership in the German IHK is mandatory in Germany.

In negotiations with agents and distributors, we recommend that you be interested in the following facts:

  • whether the agent holds a business license;
  • request a portfolio of represented businesses;
  • request a list of sold products;
  • reference.

You also need to decide if you intend to penetrate the market on a regional or national scale. When concluding contracts or conditions of cooperation with an agent/distributor, we recommend that you pay attention to the conclusion of the contract with an emphasis on the possibility of terminating the relationship; verifying whether the person concluding the contract is authorized to act; agreement regarding the payment of costs for marketing and other services, etc.

The German territory belongs to the customs territory of the EU. With the accession of the Czech Republic and other countries to the EU since May 1, 2004, our country’s mutual trade with the Federal Republic of Germany continues to be intra-EU trade (intra-community trade), and mutual supplies are therefore not subject to customs control, nor are customs duties levied on them.

A common customs tariff and a harmonized system of description and numbering of goods apply in the Federal Republic of Germany. Customs issues fall under the competence of the Federal Customs Administration (Bundeszollverwaltung). Information can be found on the website of the customs office.

Export control

Classic restrictions applied in German foreign trade (weapons and military equipment, products of a strategic nature, possible limits on the import of certain commodities from third countries outside the EU) are usually listed in the circulars of the Federal Ministry of Economy and Energy (BMWi) and are also published on its website. In addition to its other functions, the federal authority BAFA is responsible for issuing arms import and export licenses, or product approval for the market, for industrial items and some strategic materials and raw materials. It also issues international import certificates and verifies certificates.

Protection of the domestic market

The German market is governed by harmonized EU legislation and is fully liberalized. The requirements for the quality of a number of products are relatively strict, based on EU legislation from national provisions and standards for “consumer protection”, from ecological standards, etc., including control of their compliance.

Forms and conditions of operation on the market

The legal regulation of establishing a company and doing business in the Federal Republic of Germany is more complicated than in the Czech Republic. In general, we recommend the information servers of the federal government to start a business.

There are several forms of businesses:

  • A company under civil law (GbR) and a public trading company (OHG) (Gesellschaft bürgerlichen Rechts – GbR, Offene Handelsgesellschaft – OHG).
  • Limited partnership (KG) + limited partnership with limited liability (GmbH & Co.KG), (Kommanditgesellschaft – KG; Gesellschaft mit beschränkter Haftung und Kommanditgesellschaft – GmbH & Co.KG).
  • Limited liability company (GmbH): (Gesellschaft mit beschränkter Haftung – GmbH) This type of business company is a popular, very widespread in Germany, practical and, in most cases, tax-advantageous legal form, which is also suitable for the business of foreign entities.
  • Others include the joint-stock company (AG) (Aktiengesellschaft – AG), which, however, is less suitable for the needs of SMEs in the Czech Republic in particular. The usual form is also an individual entrepreneur (Einzelunternehmer, Einzelfirma).
  • A joint venture is a company owned partly by a German and partly by a Czech foreign partner. There are no peculiarities in German law, and domestic and foreign partners are legally equal. A joint venture is currently one of the less used forms of entry of Czech companies into the German market.

Information on business forms is available on the website of the Federal Ministry of Economy.

Procedures, documents and selected costs when setting up a business in Germany Information and important steps to setting up a business can be found on the website of the Federal Ministry of Economy.

Establishment of an office or branch

A Czech entity does not have to establish a new company in the Federal Republic of Germany, it can act as a foreign legal entity in the form of an office (representation), which, however, may not conclude business transactions and can be used mainly for advertising and marketing. It is also possible to establish a non-independent branch without its own accounting, or to establish a separate branch which, like an independent enterprise, must be registered in the commercial register and at the local authority

Registration (announcement) of a business (Einzelunternehmer, Einzelfirma)

Foreign entrepreneurs have the same status as domestic ones. The basic legal regulation is the trade regulation (Gesetz zur Ordnung des Handwerks). Full text.

Czech entrepreneurs who would like to do business in Germany must possess a German master’s certificate for the trade in question in order to be registered in the trade register. However, there is a possibility of an exception to registration in the trade register in the case of EU or EEA citizens. Its text is, for example, published on the website.

Marketing and communication

In the German market, the issue of marketing and appropriate advertising plays a key role. Advertisement and advertising in the media is unfortunately unavailable for most Czech small and medium-sized enterprises. Direct marketing therefore plays a role for SMEs, or participation in fairs and cooperative exchanges. In the case of direct B2B marketing, we recommend consulting PaulTrade in Düsseldorf. We recommend intensive use of internet databases, especially www.wlw.de. obtaining good references, especially from important German companies (Siemens, Bosch, Miele, etc.). Promotion and advertising using HSP: as an illustration, a full-page advertisement in the business daily Handelsblatt is around 20-25,000 Euro. A similar situation exists with professional periodicals focused on a certain market segment, e.g. the monthly “OST-WEST-CONTACT”, which is the official body of the German organization Osteuropa Verein der deutschen Wirtschaft.

Information on various options for publishing (or advertising) offers and information (incl. searching for partners) especially via the Internet at specialized economic organizations etc. Advantages: mostly zero costs and narrowing of the target group. Here are selected main options:

Advertising in cooperative internet exchanges

Publication of the offer in the B2B cooperation exchanges of the Chamber of Commerce and Industry. Publication of a Czech company’s offer in magazines published, for example, by chambers of commerce and industry is free in most cases.

Communication with the media – corporate press releases and information on internet portals for German newsrooms

Infoportal NOV-OST Info. It publishes press releases and information from CEE countries. The area of ​​users of the portal includes “decision makers” in trade with the CEE region, as well as German, Austrian and Swiss companies and the media. Internet: www.nov-ost.info. Infoportal Deutsch-Tschechische Presseagentur DTPA – The Czech-German Press Agency can publish economic information for companies free of charge. Internet: http://www.dtpa.de, e-mail: dtpa@kabeljournal.de.

Publication of press releases through trade fair administrations .

All international trade fairs and other large trade fair events in Germany publish press releases from exhibitors free of charge on their websites. OTS Originaltextservice NEWSAKTUELL. The OTS Newsaktuell agency is a subsidiary of the German news agency DPA. Distributes corporate PR materials from home and abroad. A one-time publication of a report with a range of up to 300 words costs around 300 Euros. Contact: www.newsaktuell.de.

In general, it can be recommended that Czech SMEs pay increased attention to all opportunities to participate in Czech pro-export events organized in Germany by the Embassy of the Czech Republic, the Consulates General in Dresden, Munich and Düsseldorf, PaulTrade and other official institutions of the Czech Republic. In this context, we also want to draw attention to a financially inexpensive way of meeting and establishing contacts with potential German partners at events organized by German institutions and authorities directly in the Czech Republic. Information about these events can be obtained from the Czech-German Chamber of Commerce in Prague, which in most cases is their Czech organizer ( www.dtihk.cz ).

Issues of intellectual property protection

The Federal Republic of Germany has widely and thoroughly developed laws on the protection of intellectual property. The highest legal norm is the Constitution and its provisions for the protection of personality and freedom of business. Specific provisions for the protection of intellectual property are contained in the following laws:

  • Gesetz über Urheberrecht und verwandte Schutzrechte (Urheberrechtsgesetz – UrhG) – Copyright Act
  • Gesetz betreffend das Urheberrecht an Werken der bildenden Künste und der Photographie (Kunsturheberrechtsgesetz – KunstUrhG/KUG) Act for the Protection of Works of Art
  • Patentgesetz (PatG) – Patent Act
  • Gesetz über den rechtlichen Schutz von Mustern und Modellen (Geschmacksmustergesetz – GeschmMG) Act on the Protection of Design Patterns, Models and Designs
  • Gebrauchsmustergesetz (GebrMG) Utility Design Act
  • Sortenschutzgesetz (SortSchG) Law for the Protection of New Varieties
  • Gesetz über den Schutz der Topographien von mikroelektronischen Halbittererzeugnissen (Halbleiterschutzgesetz – HalblSchG) Law for the Protection of Intellectual Property Rights in the Field of Electronics
  • Gesetz über den Schutz von Marken und sonstigen Kennzeichen (Markengesetz – MarkenG) – Law on the Protection of Marks of Origin and Trade Marks
  • Bürgerliches Gesetzbuch (Namensrecht, § 12) – the right to protection against misuse of one’s surname
  • Gesetz gegen den unlauteren Wettbewerb (UWG) – Law against unfair competition – trade secrets etc.

The rights affected by the aforementioned laws are protected on the basis of international agreements and treaties, as well as on the basis of EU directives and regulations. They are licensed, but transferable to other persons (physical and legal). On the other hand, there are restrictions on these rights in the sense of the right to cite copyrighted works, the right to parody them, the right to own research, generally in the sense of the right to freedom of information. You can always find up-to-date information on copyright law, patents, licenses, etc. on the GTAI website.

Public procurement market

It follows from the EU accession agreement, which as a source of primary law takes precedence over national public procurement regulations, that Czech companies can participate in all public contracts that are tendered in Germany in accordance with the relevant provisions of the “acquis communautaire”.

For the Federal Republic of Germany, as a member country, when issuing “EU public contracts”, in addition to the determination of the type of procedure and the definition of qualification prerequisites, two basic conditions apply, i.e. the range of “mandatory contracting authorities if their contract exceeds a certain value threshold” and “the value of the contract above”, from which they must announce “EU tender” as well as other entities outside the mandatory contracting authority.

Value limits of “EU tenders”:

  • 5,000,000 Euros – for construction works
  • 130,000 Euros – for state bodies and institutions
  • 200,000 Euros – for self-governing units, etc.
  • 400,000 Euros – for contractors in the water management, energy and transport sectors
  • 600,000 Euros – for contractors in the field of telecommunications

Public contracts in Germany according to national rules

According to EU provisions, national (German) legislation applies to the listing of other public contracts, so-called below-limit contracts. The Federal Ministry of Economy and Climate Protection (BMWK), which is the founder of the Federal Cartel Office (Bundeskartellenamt – BkartA), is the place that deals with public procurement issues in Germany. The principles of awarding public contracts and the control mechanisms for awarding them are contained in the fourth part of the German Cartel Act (Gesetz gegen Wettbewerbsbeschränkungen – abbreviated GWB). The Act can be reached either from the website of the Ministry or from the website of the Cartel Office.

The German Public Procurement Act distinguishes between three possible methods:

  • public tender – for an unlimited range of companies (so-called open tender)
  • limited tendering – only for a certain range of companies (so-called closed tendering)
  • free hand tendering – the only one that allows direct negotiations between the client and the company

Of course, open tenders are preferred in order to ensure greater competition. However, the law stipulates the conditions under which the other two procedures can be used. Special regulations in the system of awarding public contracts apply to the bid prices of those interested in the contract. According to the relevant directive, market prices are preferred over – only in exceptional cases – allowed prices at the level of own costs, and the directive orders the contract to be concluded at a fixed price. The supervisory authorities of the individual federal states are responsible for any price review of offers. In Germany, a new public procurement law has been in force since 18 April 2016. It applies exclusively to procurement governed by Community law (contracts over EUR 215,000). Orders of lower value remain the responsibility of the respective federal state. The goal of the new legislation was to simplify the approach of small and medium-sized enterprises to the awarding of public contracts, to limit criminal phenomena, to simplify the proof of competence of participating entities, to strengthen the innovative and long-term sustainable dimension of the procurement process. More information can be found on the websiteof the Federal Ministry of Economy and Climate Protection: which in the relevant chapter lists the relevant legislation and other documents.

Basic information channels about public contracts in Germany

  • European database: TED – Tender Electronic Daily. Electronic database of all EU contracts announced in the Federal Republic of Germany and other EU countries accessible free of charge. It also contains the results of tender procedures.
  • German database: AUSSCHREIBUNGEN database on the “ixpos” portal of the German agency GTAI. Daily update, includes international tenders and national tenders according to EU rules – see GTAI. The database is also accessible from the portal. The advantage is the breakdown of tenders by industry and other search options. The search is for payment, a one-time daily entry costs 2.25 Euro with the option of paying online.
  • www.evergabe-online.de/ – central database of the federal government
  • w ww.vergabeplattform.de/
  • www.ausschreibungen-deutschland.de/

Tenders in the federal states:

  • Baden-Württemberg
  • Bavaria
  • Berlin
  • Brandenburg
  • Bremen
  • Hamburg
  • Hesse
  • Mecklenburg-Vorpommern
  • Lower Saxony
  • North Rhine-Westphalia
  • Rhineland-Palatinate
  • Saarland
  • Saxony
  • Saxony-Anhalt
  • Schleswig-Holstein
  • Thuringia

The Federal Bulletin of Tenders (Bundesausschreibungsblatt) is available online and is published once a week on Fridays, and it is possible to have it sent in printed form to the Czech Republic upon payment of a subscription (35.50 Euro per month). Its prepayment in electronic form is also considered.

Bundesausschreibungsblatt GmbH

PO Box 200180 D-40099 Düsseldorf

Phone: +49 (0) 211-370848

Fax: +49 (0) 211-381607

Email: service@deutsches-ausschreibungsblatt.de

Electronic platform of the federal government EVERGABE-ONLINE. It contains tenders of the state administration, federal authorities, regional authorities and municipalities. The search is free, and the tender documentation can also be accessed for free after a simple free registration. In addition, all state authorities of the Federal Republic of Germany, local government and other mandatory contracting authorities in the sense of EU law and German national regulations publish the public contracts issued by them on their respective websites. Access is always free.

Payment terms, payment ethics and resolution of commercial disputes

Ways of resolving commercial disputes

Between the Federal Republic of Germany and the Czech Republic, the reciprocity of the enforcement of state court decisions is recognized, i.e. the enforceability of awards of arbitration courts (arbitration) and normal courts. In general, it can be stated that German importers try to demand from the foreign partner the acceptance of the jurisdiction of the Federal Republic of Germany, which is more advantageous for the German side, mainly due to the knowledge of the domestic environment. It is therefore possible to recommend to Czech businessmen that, in their international business relations with German companies, they pay increased attention to the professional processing of all legal documents, or to professional clarification of the consequences of various legal acts.

Local market risks

The persistent problems that Czech companies in Germany often have to deal with are mainly of a bureaucratic nature. The SOLVIT system provides assistance in dealing with the procedures and decisions of the German authorities, where there are doubts that they do not act in accordance with EU Community law. German legislation, which is quite complicated, is another difficult obstacle for a Czech company. German tax legislation is very complex. Even for small German companies (as well as individuals) it is common for this area to be handled by a special tax advisor.

In the event that a Czech supplier would like to find out more detailed information about his future partner, e.g. those that are part of the commercial register, he is not offered a free service on the Internet in Germany. The solution is to contact the German Chamber of Industry and Commerce, which can either provide selected basic information or refer to the relevant registry court.

Visas, fees, specific conditions for traveling to the territory

Due to the fact that the Federal Republic of Germany is an EU member state, our citizens traveling to Germany for tourism, to visit friends, relatives, etc. they do not need a visa. Citizens of the Czech Republic employed in Germany or self-employed in Germany also no longer need visas. However, employees are subject to current labor law regulations for EU citizens, e.g. regarding the recognition of qualifications. With the expiry of the 7-year transitional period, i.e. from 1.5.2011, access to the German labor market was also opened up for citizens from the so-called new EU member states, i.e. the Czech Republic as well.

In all cases during a longer stay, it is necessary to register for the stay at the relevant office. On the basis of EU directive 2005/64/EC, so-called air protection zones (Umweltzone) have already been established in 56 German cities (e.g. in Berlin, Cologne, Hanover, Dortmund, Düsseldorf, Stuttgart) for the purpose of improving the environment. In the coming years, these zones will be introduced in another 17 cities, while the process is still ongoing. This is a de facto ban on the operation of motor vehicles with a high content of harmful exhaust fumes in the centers of these cities, from which only vehicles equipped with the appropriate mark (plaque) will be exempted. Violation of the obligation resulting from this measure is sanctioned by a fine (80 EUR). All necessary information on this measure can be found at www.umwelt-plakette.de, or green plaque on the website. This sticker, which is valid for all German cities in which air protection zones have been or will be established, can be purchased before the trip and in the Czech Republic at STK stations. Areas with increased risk for foreigners ZÚ Berlin does not consider the Federal Republic of Germany to be a risk territory

Employment of citizens from the Czech Republic

From May 1, 2011, citizens of the Czech Republic gained unlimited access to the German labor market. Therefore, they do not need a work permit before starting a job in Germany. In the case of trade activities carried out on the territory of the Federal Republic of Germany, the obligation to register the trade at the relevant local trade office continues for citizens of the Czech Republic even after May 1, 2011. Other basic legal norms are the Act on min. wages (MiLoG) and the law on the posting of employees (AEntG).

From 1 January 2015, a general minimum wage has been in effect in the territory of the Federal Republic of Germany, which applies to everyone, i.e. mobile employees of domestic and foreign companies, including cabotage and transit. From 1 January 2022, the hourly minimum wage was further increased to €9.82, the Minimum Wage Act (MiLoG) also stipulates the obligation to report work activities and their documentation. Summary information is available on the website of the German customs administration. Current information can also be found on the website of the business and economic section (employment of citizens of the Czech Republic in the Federal Republic of Germany). The Minimum Wage Act (MiLoG) sets an hourly wage of €9.82 gross (excluding the employer’s contribution), which on average corresponds to approx. 242.00 CZK. Contributions to:

  • edible
  • reimbursement of living expenses, the so-called diet
  • overtime hours
  • allowances for work on a holiday, Sunday
  • holiday allowances
  • Christmas allowances (with the exception of the salary calculation for the month of December)

New obligations for employers whose employees with mobile activities perform work activities on the territory of the Federal Republic of Germany

Reporting documents to the customs office in Kolín n/Rynem as part of mobile activity is done using a form that can be found on the website of the customs office (employers or recruitment agencies are required to report work activities in the territory of the Federal Republic of Germany for a period of 6 months, using form 033037 /”Einsatzplanung für Arbeitgeber bei Beschäftigung in austlichkeit mobiler Tätigkeit”, respectively 033038/). Simple instructions on how to fill out the form can be found on the website of the Berlin Representative Office. Forms for reporting other professions can also be found on the website of the customs office in Cologne on the Rhine.

All forms must be filled out in German, they need to be kept for 2 years for possible inspection. In the event of non-fulfillment of the obligations arising from the MiLoG, the customs office is entitled to impose a fine of €30,000, in the event of non-payment of the basic minimum wage up to €500,000. If the customs office issues a fine to the company, it is excluded from the possibility of participating in public contracts for a “reasonable time”. Companies that pass their orders on to their subcontractors are responsible for MiLoG compliance throughout their supply chain. From the obligations arising from MiLoG, i.e. payment of min. wages, cannot be bound either by contract or by renouncing the employee.

Main information sources in the Czech Republic:

All information regarding the employment of Czech citizens in the Federal Republic of Germany can be found on the integrated portal of the Ministry of Internal Affairs and Communications ” EURES ”

Employment mediation in Germany (central office) Bundesagentur für Arbeit in Nuremberg

Job placement for specialists in Germany: Bonn-ZAV.IT-Experts@arbeitsagentur.de

Help when the family travels to see an expert employed in Germany

International Organization for Migration (IOM)

phone: +420 233 370 160, e-mail: prague@iom.int

Social security: Employees from the Czech Republic, who perform a regular job in Germany, are subject to German social insurance and are insured against illness, unemployment and in the statutory pension insurance, must also be insured by the employer with the trade unions against accidents.

A person who has worked for at least twelve months in an insurable employment is entitled to unemployment benefits.

Employees from the Czech Republic sent to Germany for a maximum of 12 months apply to the Czech Social Security Administration in accordance with provisions (EHS) 1408/71 for an A1 (formerly E 101) confirmation and hereby prove that they continue to be subject to the mandatory social insurance laws of the sending state and not German legislation. Further information on this is provided by the Federal Ministry of Health and Social Security BMGS ( www.bmgs.de ).

Fairs and events

Germany is a fair country. About two thirds of the world’s leading trade fair events take place in Germany. The 26 exhibition venues are of supra-regional importance and have a capacity of over million square meters. The most important trade fair for the automotive industry is the IAA, which has so far been held every two years in Frankfurt am Main. It should be held in Hanover in September 2022. The bauma fair is important for the field of engineering, which is the largest engineering fair in the world and takes place in Munich. The world’s largest agricultural trade fair, Agritechnica, takes place every two years in Hannover.

Germany Market Entry

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