When considering setting up a company in Germany, the first thing you should ask yourself is: why?
Why do I want to be there? What do I hope to accomplish by being there? And what steps do I need to take in order to make that happen?
If your answer is "The country has great business opportunities," then you might want to think again. You don't have just one reason for setting up a company in Germany—you have many.
Free Trade Zones (FTZs) in Germany are particular free trade areas established by the government to attract foreign direct investment to the country, thus stimulating the domestic economy. Business owners and foreign investors can take advantage of the various fiscal and non-fiscal incentives provided to them in this zone by setting up their companies there.
Profitability of the business
If you are planning to set up a business in Germany, it is important to know that there are several benefits to doing so. This includes:
a tax rebate for the first five years of your company's operations;
reduced rates on importing raw materials; and
lower export duties on products made in Free Trade Zones.
Taxation and customs benefits
Taxation and customs benefits
As a company in Germany, you can benefit from the following tax advantages:
No tax on profits. You only pay income tax if you have profits and even then, the rate depends on your type of business and how long you have been running it.
No tax on dividends and interest payments. Dividends paid by German companies are not taxable for both resident individuals as well as non-resident individuals who own shares in such companies (the so-called 'participation exemption'). The same applies to interest payments made by banks or financial institutions operating in Germany. This means that investors do not have to pay any taxes when receiving dividends from their investments in German firms or receiving interest from bank deposits held at home or abroad!
Employment law protection
As an employer, you must pay your employees the statutory minimum wage and provide them with a written employment contract. You must also provide them with an employee handbook and pay the statutory holiday allowance. As a business owner, this can be tricky to navigate on your own--especially if you're unfamiliar with German employment laws.
To help guide new businesses through these processes, Free Trade Zones offer specialized advice for employers who want to set up shop within their borders but aren't ready yet for full-time staffing needs (or simply don't have room for more than one person).
Security and protection of investments
The security and protection of investments are one of the most important factors for companies when deciding whether to invest in a certain country or not. The fact that FTZs are managed by the German Customs Administration, located in the same area as customs offices, and protected by both police and military makes them an attractive place for foreign investors.
Setting up your company in Free Trade Zones Germany allows you to do business under favorable conditions.
Free trade zone companies are entitled to the same tax incentives as domestic companies. You can avoid double taxation by setting up a free trade zone company, which means that you don't have to pay taxes on profits from foreign business activities.