WHY INVEST IN GERMANY?
The German government encourages foreign investment by offering attractive tax deductions and incentives, depending on which market sector the investor wants to invest in. Also financial loans for enterprises related to research and development within Germany. Generally, the government allows direct access for foreign investors to all market sectors and it is possible to wholly own German companies. Germany has signed bilateral investment treaties (BITs) with numerous countries and double taxation agreements with more than 90 countries.
Key investment sectors for foreign investors are Consumers Goods, Tourism both facilities and accommodation and Education, some of which will prove to bring in high net returns.
Germany is the top destination for foreign investment to enable individuals wanting to establish a company overseas.
Known as Europe’s economic powerhouse, it allows investors to profit from the performance of the fourth largest economy in the world. It also has one of the highest productivity rates in the world and is always associated with efficiency and quality. After spending six years at the top its now tied third with China & the USA in global exporting. 81 percent of the German population have been trained to university entrance level or possess a recognized vocational qualification. It has a first-class infrastructure, competitive tax conditions, a secure investment framework and inviting investment incentives. The superior health and education provision attracts a cosmopolitan society living an excellent quality of life. Recent residential investment has been brought about particularly now in Berlin renovating historical buildings for high specification accommodation since the removal of the wall. An abundance of cheaper property awaits foreign investment potential. It is also worth mentioning that their budget is every five years and effectively creates their economic stability.
Why Invest in the German Property Market?
The German property market is one of the most liquid residential markets in the world. Residential properties remain priced at very competitive prices, well below comparable property in the rest of Europe, it also stands out for its attractive and stable economic conditions. With historical data, readily available and favourable growth prospects, the German residential market remains a serious contender for foreign investment portfolios, particularly for risk-averse investors.
Germany has been tipped for some time now to become the pinnacle place to invest in property, the rising star of European Real Estate has finally come into its own and has equalled if not surpassed London, UK. Safe havens in the event of the dissolution of the Eurozone London and Germany will play a similar role so look no further afield.
It is believed that the market has started to shift away from London and prefer Germany because over the last 24 months the German economy has become much more stronger and currency exchange rates have favoured the Euro to Sterling since the announcement of Brexit. Real Estate pioneers have been followed and subsequently copied as buyers see the trends emerging and the profits gained from this new business venture.
The local markets have reacted to this increase in demand by developing new properties as opposed to renovation work that are becoming more and more attractive to foreign investors. Suddenly the two new trends of renovation and new development have rejuvenated into an established requirement and new products are being sourced and marketed.
What has happened in London is certainly happening in Berlin and Munich where businesses have become additional drivers to the requirements of accommodation for German-bound buyers. Overseas buyers are either now working there or considering moving their businesses there as the two cities are exciting places to be right now. A lot is happening. Russian buyers are affluent entrepreneurs and some feel that they cannot grow their business in Russia any further so are considering Berlin as a possible base, weighing it all up against London, New York or Los Angeles as an example, Germany has once again become a European property hotspot.
Foreign investors cannot buy property in some countries including Germany and unless you know the market it is an area you should avoid unless it’s an absolute necessity. Buying through a UK registered development/investment company is the safest route to market and an ideal chance to diverse your property portfolio.
What are some important & key points to know before investing abroad/ investing in property in Germany?
It is worth pointing out that regulations with regards to investing abroad differ considerably from country to country and the necessity to exchange currency could affect your purchase. If the foreign investment opportunity is being offered by a UK registered company, then you will still be protected by any applicable English Laws. You should however check that this is the case prior to any investment.
To invest in property in Germany you should have a good understanding of that country including their rules and regulations, more importantly their laws and tax implications. The risk potential abroad is hampered by the lack of most people’s knowledge and if you are considering buying German property you should seek professional help first. We cannot recommend any company or service as we do not have the expertise in this area and are legally not permitted.
How can Wise Investments help with someone’s German property investments?
We can provide you with opportunities that are property related and are offered by known UK registered businesses. We can arrange finance, currency exchange, provide due diligence and research the opportunity prior to investment. We can help with the application process and be a point of contact for reassurance. We can also provide you with opportunities ordinarily you would struggle to find yourself.
What are the risks of property investing in Germany and how can Wise Investment help reduce those risks?
There are many risks involved in property purchase. Location, purchase price, condition, repayment ability, restrictions attached and economic changes to name just a few. Wise Investment Properties only offer investments by known developers/investment companies. The full investment details are explained comprehensively and normally come with assurances of investment growth potential and known yield returns and any applicable terms. The risks have been minimised to attract investors to see it as a viable opportunity and encourage investors to return prior to the offering.
What are the different types of property investment in Germany?
Commercial and Residential property, including buy-to let, off-plan, renovation of historical buildings and hotel accommodation. Consideration for investments offering greater levels of security targeting specific tourism or business activities with known demand for commercial development or key areas for improvement should be a priority for savvy investors.
What is the most popular property investment?
Historical renovations and expanding business area accommodation particularly in and around Berlin.
Why should you invest in Germany rather than USA or the UK as an example?
At a time of political unrest within both the UK and the USA, foreign investors look to Germany for some stability and reassurance. Germany have just recently made another political statement by voting Angela Merkel in for her fourth term. The economy is stable and growth continues strengthened by the EUR-Euro while the uncertainty of Brexit weakens GBP-British Pound and the crisis between USA and North Korea effects the USD-US Dollar.