Brexit drives British firms to Germany: Report
The number of British companies in Germany is rising due to Brexit, a new report states. Meanwhile, the southern state of Bavaria is planning to open an office in London in a bid to strengthen links.
In 2018 more foreign companies than ever before opened up businesses in the Bundesrepublik, according to research by Germany Trade and Invest (GTAI).
The economic development agency of the Ministry of Economic Affairs reported that 2,062 companies launched or expanded in Europe's largest economy last year. That's an increase of 8 percent from the previous year.
According to the GTAI, 17 percent of the companies use Germany as a production and research location.
The US holds its position as the top investor country leading the way with 345 investment projects – also a new record. The Americans were followed by Switzerland (229 projects), China (188) and the UK (168).
The report also showed that since the Brexit vote in 2016, the number of British firms established in Germany has risen by 34 percent, with the UK's decision to leave the EU deemed a key factor in the development.
In contrast, the German market seems to have become less desirable for Chinese investors. The number of Chinese companies establishing firms in Germany fell by 33 percent during the same period.
Neuer Rekord: Auslandsinvestitionen in #Deutschland. "Deutschland ist weiterhin ein sehr attraktiver Standort," sagt Bundeswirtschaftsminister @peteraltmaier @BMWi_Bund @Der_BDI @DIHK_News pic.twitter.com/3t0AwyUlUP— Germany Trade & Invest (@GTAI_de) May 13, 2019
"These figures conclusively demonstrate that Germany is a popular investment location for foreign companies,” said Robert Hermann, CEO of GTAI.
“It is particularly noteworthy that never before have so many British companies settled in Germany as last year.
“We asked them why and for almost half of the companies – 45 percent – Brexit was one of the reasons.”
As The Local has reported, Frankfurt, Germany's financial hub, has seen a rise in the number of firms relocating there following the Brexit decision.
According to the GTAI, the most popular sectors last year were corporate and financial services, followed by ICT and software, consumer goods, mechanical engineering and parts manufacturing.
"Many investors appreciate the positive environment for establishing a business in Germany," Hermann added. "The size of the German market and its position within the EU are also powerful arguments.”
Bavaria to open office in London
It came after authorities in the German state of Bavaria revealed they are to open a "large office" in London because the region is eager to “maintain relations between Bavaria and Britain in the future”.
Britain is the fourth largest export market for the southern state, which has a strong car and plane making industry.
State premier Markus Söder said whatever happens with Brexit “we want to send a signal of understanding, togetherness, and of better relations”.
Söder made the comments last Thursday at a banquet held in Munich for Prince Charles and his wife Camilla during their visit to Germany.
The premier also gifted the couple with a pair of baby Lederhosen for their new grandchild, Archie Harrison, son of Prince Harry and Meghan, Duchess of Sussex.
Markus Söder and his wife Karin Baumüller-Söder gift the Lederhosen to Prince Charles and his wife Camilla. Photo: Joerg Koch/Bayerische Staatskanzlei/DPA
In his speech in German, Söder praised the visit of Prince Charles, the heir to the throne, as a very important signal for fostering good relations between Germany and the UK.
But he also stressed that he would "very much like to see the UK stay in the European Union".
The new deadline for Britain leaving the EU has been set for October 31st, however Prime Minister Theresa May is hoping she can get a withdrawal agreement through parliament before this date.