Chinese investors in Germany – legal, tax, audit, advisory and business culture
China’s “Made in China 2025” strategy has delivered notable and impactful outcomes, including reduced reliance on imports, enhanced global competitiveness in key sectors, significant technological advancement, and the creation of reverse dependencies in global supply chains. The initiative is now transitioning into a new phase—often referred to as “Made in China 2.0”—which promotes targeted global investment in emerging technologies. Germany remains a highly attractive destination for Chinese investors, particularly in areas such as advanced technology and environmental engineering. German companies should be prepared to engage in strategic collaboration with Chinese entrepreneurs.
Key points in brief
- Germany’s economic system is characterized by a high level of regulation. Business activities—such as transactions, deals, and mergers & acquisitions—are typically accompanied by comprehensive financial, legal, and tax due diligence. While not legally mandated, these procedures are considered standard practice and play a critical role in assessing risks, determining valuation, and structuring the transaction effectively.
- German tax law is complex and includes not only VAT, but also income and trade taxes. The German tax authorities are known for their strict enforcement and detailed scrutiny, making expert guidance essential for foreign investors.
- The Chinese and German business cultures are differs significantly in terms of communication styles, decision-making processes, and expectations around hierarchy and formality. Understanding these differences is key to successful collaboration.
- German employment law includes comprehensive regulations on social insurance, the minimum wage, occupational health and safety, as well as the regulations on unions and works councils, which plays a significant role in workplace governance.
Germany as a gateway to the EU for Chinese businesses
As one of Europe’s leading economies, Germany offers Chinese companies access to the broader European market. Germany continues to enjoy a strong reputation for high-quality technology and in-depth specialist knowledge. Moreover, protection for intellectual property is a cornerstone of the German legal system, providing a secure environment for innovation. These factors make Germany an attractive destination for Chinese investors.
Challenges and solutions
Deals, transactions and M&A in Germany often present Chinese companies with challenges. Compared to China, the German business environment is significantly more regulated – particularly in areas such as taxation, compliance, environmental protection, and labour rights. Our experts are here to support you with every aspect of regulatory compliance, ensuring a smooth and secure entry into the German market.
We’re there when you need us and provide advisory in the following areas:
- Audits of consolidated and annual financial statements
- Audits/review reporting packages
- IPOs
- All tax issues
- Financial outsourcing and payroll services
- Financial, tax, legal, commercial, HR/Pension, IT and operational due diligence
- M&A
- Founding companies and
- Worldwide with our international Grant Thornton network.
Are you a Chinese company looking to do business in Germany? Are you looking for advice from understanding, native speakers to allow you to get the best start into the German market? Our contact Xiaolei Wang helps Chinese companies get the best start into the German market. Take advantage of her expertise and feel free to contact her with your questions, without any commitment.
