A European hub with a fantastic blend of pro-business culture, top-quality infrastructure and high skills levels, Munich is the ideal base for companies looking to enter German and European markets.
“The city’s big advantage is described locally as the Munich Mix,” explains Stefan Rau, partner at Warth & Klein Grant Thornton and one of the managing directors at its law firm. “Basically, this refers to the combination of factors that make Munich such a great place for business.”
With a wide range of business types already established in Munich, the city boasts strength in a number of key industrial sectors. “Our startup support system is fantastic,” Rau adds.
“There are a number of mid-size companies known as ‘hidden champions’ and many major corporations have their bases here, such as BMW, Siemens and Munich Re.”
In addition, Rau explains, the availability of skills to employers is outstanding. Munich is Germany’s second largest university city, with more than 120,000 students, while more than a third of the local workforce are graduates – a higher proportion than anywhere else in the country, and more than double the national average.
Sectors with a strong presence in the region include automotive, insurance and financial services, and technology,” Rau adds. “For example, Apple and Google have recently extended their bases here. Major players like these need suppliers and there are some great opportunities for international businesses.”
In terms of both national and international connections, Munich is well placed. Its airport is among the biggest and best in Germany and its position in the south of the country means it is centrally located in Europe.
Accordingly, Rau says, the city’s population is itself very cosmopolitan, with foreign residents making up almost a third.
“Part of the reason behind this is the fact that the quality of life here is excellent: you’ve got attractions ranging from world-class opera to the nearby mountains,” he explains. “But Munich is also highly entrepreneurial. It is without doubt a rich city and you can’t become that without being able to attract a large number of entrepreneurs.”
Given its status as a highly sought-after destination in one of the world’s leading economies, corporate income taxes (Körperschaftssteuer) on business are in general in Germany and therefore also in Munich equal, explains Rau. The locally imposed Gewerbesteuer (business tax) varies throughout the country but there are parts of the Munich area where the locally imposed Gewerbesteuer is significantly lower, such as in the Gruenwald suburb.
And as part of the European Union, Germany’s trade with nearly 30 countries in the continent is entirely free of tariffs and other barriers. The EU also has trade agreements in numerous sectors with economies all over the world.
Real estate is another important sector for Munich. The turnover of office space is higher here than in any other part of the country and vacancy rates are lower than anywhere outside Berlin.
“Munich also hosts the annual Expo Real trade fair,” Rau adds. The 2019 event, which took place in October, had exhibitors from 45 countries.
While other German cities specialise in certain areas, such as financial services in Frankfurt or technology startups in Berlin, Munich welcomes businesses across sectors and combines multiple factors that international businesses are looking for when choosing a new regional hub.
Munich’s entrepreneurial spirit and world-class infrastructure make it the ideal gateway for companies looking to expand into Germany and Europe in general.
To discuss your business expansion in the region, contact Stefan Rau.
