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Study: Decline in US companies' intentions to invest in Germany

US companies: "Standort Deutschland" less attractive

US companies are increasingly sceptical in their evaluation of Germany as a place for business. Foremost the basics come in for criticism.

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Germany and the US are among the most important players in the global economy and they maintain close relations. Our study "US Business in Germany 2020" shows that this good relationship is at risk; US companies view Germany as a place for doing business in an increasingly critical light. While Germany continues to be an attractive location, the propensity to invest has clearly declined. Two numbers attest to that: in 2017 almost half (47 percent) of the companies surveyed reported investment intentions of EUR 10 million or more in Germany. Now only 24 percent state this. 

Criticism of Germany as a place for business

This reserve is not linked to US companies being in a poor economic position. On the contrary: 73 percent of the US companies surveyed rate their own economic position to be very favourable/or favourable in the next three years. Their reserve is related to fundamental criticism of Germany as a place for doing business. Their list of criticisms is long: a complicated tax system, high personnel costs, infrastructure needing improvement; Germany is also not perceived to be a driver of innovation.

Networks should be expanded

"Germany should especially invest in infrastructure to remain an attractive location": that is how Warren Marine, Head of the USA Country Practice, evaluates the findings of the survey. To this end, he places importance on the expansion of the mobile network and the drive to expand 5G. "Electricity and traffic networks should also be expanded", Warren Marine adds. 

Innovation capacity is called into question

In respect of taxes and levies, 21 percent of the companies surveyed view Germany to be at the bottom of the table compared to other EU countries; at any rate among the bottom five countries. In respect of capacity for innovation, Germany also has room for improvement. Almost half of the companies surveyed report that they consider the innovation capacity of their German company locations to be mid-table or even among the bottom five. In addition: only 17 percent of US companies feel that they have the optimum support in Germany to resettle or to invest more.

Despite all the criticism - Germany remains an important partner

The study clearly shows that Germany is viewed with considerably greater scepticism than it was some years ago. Nevertheless the survey also shows that Germany remains an attractive location and partner for investment and activities for US companies. Approximately two thirds of those surveyed assume that their business here will record positive or very positive figures in the next three years. And Germany continues to be an important strategic point of departure. 80 percent coordinate their sales activities in the German-speaking region from Germany. 

US-Business in Germany

Live interview regarding KPMG's study "US-Business in Germany" starring Deutsche Welle and KPMG Partner Warren Marine: 

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