International Business and Trade

Summative Assessment
Final Requirement

Submitted by:
Tauyan, Christine
BSBAMGA

Submitted to:
Dr. Rowel E. Antonio
A. Background about the country

1. Location

Germany's Federal Republic is situated in the heart of Europe. In 1871, the

German Empire, a modern federal state, first unified the nation-state now known
as Germany. Formally the Federal Republic of Germany, is a sovereign state in
Central Europe with a Nations Online country profile.

Germany is bordered on the north by the North Sea, the Baltic Sea, and
Denmark, on the west by the Netherlands, Belgium, Luxembourg, and France, on
the south by Switzerland and Austria, and on the east by the Czech Republic and
Poland. Its marine boundaries are shared with Sweden and the United Kingdom.

2. Population
Germany has an estimated population of 83,2 million people (2020); the
capital and largest city, Berlin, with a population of over 3.3 million people.

3. Religion
Christianity is the most traditional and dominant faith

4. Language
German Deutsch

5. Currency and exchange rate

Euro is the currency in Germany and the exchange rate in the Philippines is
57.16 Philippine peso

Five words/phrases with English translation (preferably business-related)

1. Import – Importieren
2. Economy – Wirtschaft
3. Market – Markt
4. Finance – Finanzen
5. Management - Verwaltung

B. Trade relationship

1. Products the Germany sell to the Philippines (exports)

In 2019, Germany exported $2.88 billion to the Philippines. Planes,

Helicopters, and/or Spacecraft ($542 million), Integrated Circuits ($282
million), and Packaged Medicaments ($161 million) are the biggest German
exports to the Philippines.
 2. Products the Germany buy from the Philippines (imports)

The import of Philippines to Germany were Integrated Circuits ($1.19B),

Office Machine Parts ($879M), and Passenger and Cargo Ships ($284M).

3. Trade Agreements between Germany and the Philippines

Bilateral cooperation between the German Government and the

Philippines is broad-based, ranging from collaboration projects in the area of
climate, the environment and biodiversity, help with disaster risk reduction
and the peace process in the politically unstable south Filipino island of
Mindanao to joint German-Filipino research projects and cultural exchange.
Work in the field of human rights is another focus of Germany’s policy with
regard to the Philippines.

As early as the 1880s, German businessmen were engaged in the

Philippines, raising awareness of their homeland. The German European
School, the Goethe-Institut, and the extremely active Deutsche Club Manila,
which was formed in 1906, guarantee that Germany maintains a significant
profile in the Philippines today.

4. Economic Organizations where Germany and the Philippines are

members of

The Philippines and Germany successfully convened its inaugural Joint

Economic Commission (JEC)

The first JEC will act as a discussion forum for ways to promote trade and
investment ties. It also outlines cooperative projects in important areas of
interest, such as manufacturing, building and infrastructure, and innovation. Both
parties also talked about the latest developments in their ongoing collaboration in
the fields of technical and vocational education and training (TVET) and labor.

C. Business practices/strategies

1. Management

The organizational structure of German corporations is assessed in this

section based on two factors: hierarchical corporate structures and strong
departmental rivalry.
 Hierarchal Corporate Structure

In German corporate culture, hierarchy plays an important role. A

business environment is created by a strict hierarchical structure, in which
decisions are taken at the top and vertical communication is frequently
encouraged. As a result, the most technically competent and experienced
personnel will hold the highest jobs. The hierarchical structure can effect
negotiations and discussions, which may appear to take longer than intended,
especially for foreign enterprises in Germany.

Strong Departmental Rivalry

In Germany, strong departmental rivalry is quite prevalent, which German

managers promote since that is how they get the best out of their employees and
staff. High levels of efficiency and a competitive product are two advantages of
the related environment. (2019, Maclachlan)

2. Marketing

The German market is a formidable force that extends well beyond its
boundaries. MEDICA, the Hannover Fair, Automechanika, and the ITB Tourism
Show are just a few of the world's major trade shows where a massive amount of
business is transacted. These characteristics, together with Germany's physical
location in the heart of the European Union, make it a cornerstone on which
many U.S. companies base their European and global development strategies.

SWOT Analysis of the foreign companies in Germany are compared to the

external opportunities and risks from the German and international markets.
Foreign enterprises can provide competitive rates in the German market, for
example, by utilizing home country-based research and development efforts or
by relocating certain manufacturing or service processes outside of Germany.

3. Finance/accounting

Germany has a wide range of incentive programs and public financing

instruments that may be used for a variety of projects. The following are some
of the most well-known and popular programs:

GRW cash grants. The cost to set up new facilities may be reduced through
cash incentives provided through grants. Large companies may be
reimbursed for up to 20% of eligible investment costs, medium companies
may receive 20% and small companies can get up to 40%.

Research and development grants. Special grants are designed to help

research and development projects. These programs include interest-
reduction loans and other special partnership programs.
 Grants for hiring. The German Federal Employment Agency and German
states offer a variety of labor incentive programs created to meet the needs of
companies looking to expand their workforce

4. Operations

The proportion of digital and AI (Artificial Intelligence)-enabled products

and services in the future will be larger than it is now. Only 51% of German
firms believe AI and digital components will radically disrupt their product and
service range in the future.The value of a product is shifting from hardware to
electronics, software, and digital technology, with digital technologies
providing more additional value than the hardware itself. Companies
nowadays do not produce smart networked products or similar products, and
they are not maintained in the same way as traditional products. It is now
feasible to access it remotely and gather an increasing amount of data.

5. Human resources

For foreign enterprises in Germany, integrating international assignment

programs to recruit and retain talent from their home country is a one-of-a-kind
option. The assignment procedure is made simple and as an advantage to labor-
friendly legislation. Because of the personal networks of the integrated foreign
workers, more international applicants may become aware of the opportunity to
work in Germany and see it as a viable option. Companies can save money as a
consequence of this practice.

Foreign enterprises that seek to hire talented individuals from other nations
must also specify their places of origin. For example, India is a popular
destination for corporations seeking IT professionals. Online employment portals
such as LinkedIn, Xing, StepStone, and other job boards in Germany are also
ideal places to look for specialists from other countries. (Wollseifen 2019) As a
last significant strength, international enterprises can create new ways to reach
their niche with the support of a well-designed idea and plan.

D. How to do business in Germany

1. Requirements (enumerate)
-Address registration
-Bank account
-Tax Advisor
-State if you are a freelancer or a stateperson
-Trade license (Gewerbeschein)
-Business registration with the Finanzant
-Residence permit
 -Health insurance company
-Update website

2. Procedures (briefly discuss)

Step 1: Register your German address (Anmeldung)

Every time you move in Germany, you must register your new address.
This is referred to as the Anmeldung. When you register your address for the first
time, you will receive a tax ID (Steueridentifikationsnummer) and an
Anmeldebestätigung (certificate of registration).

Step 2: Open a bank account

You need a bank account to register your business, and to pay your taxes
later. You don't need a German bank account; any bank account that supports
SEPA transfers are allowed

If you form a corporation (GmbH, AG or KGaA), you need a separate

business account (Geschäftskonto)1. It's required.

If you are a Freiberufler or a Kleinunternehmer (small business) , you

don't need a business account. You can use your personal bank account. Check
your bank's terms and conditions. Some banks do not allow you to use your
personal account as a business account.

Step 3: Find a tax advisor.

In Germany, tax experts are quite costly, yet they may save you a lot of
money. They can help you register your firm and handle your tax filings. They
make accounting a lot easier and help you avoid costly mistakes.

Step 4: Are you a Freiberufler or a Gewerbe?

You'll have to register your company with the tax authorities later on
(Finanzamt). The tax office determines if you are a freelancer (Freiberufler) or a
tradesperson (Tradesperson) (Gewerbe).

It's a significant distinction. A trade license (Gewerbeschein) and a trade

tax are required of all tradespeople (Gewerbesteuer). They must also be listed in
the trade registry (Handelsregister) and follow particular accounting standards in
some cases. Before registering your company with the Finanzamt, you must
complete these steps.
 Step 5: Get a trade licence (Gewerbeschein)

If you are registering a Gewerbe, you must first get a trade license
(Gewerbeschein) before submitting your application to the Finanzamt.
A Gewerbeschein may be applied for online in Berlin. Before you do this,
you must have a valid residency permit.
You can use the paper form in the rest of Germany. You may also have
your tax expert handle it for you.

Step 6: Register your business with the Finanzamt

The next step is to file a business declaration with the Finanzamt. Fill out
the Fragebogen zur steuerlichen Erfassung to do so. You must complete this
online starting in 2021. Your tax expert can help you register your company. If
you don't know German, Sorted has created a free application that allows you to
register your company in English. Firma.de may also help you form a
corporation.

Step 7: Get the right residence permit

You might need a residence permit to be self-employed in Germany. It

depends on your nationality.

If you are a citizen of the European Union, Iceland, Liechtenstein, Norway

or Switzerland, you can already start a business in Germany.

If you have a German permanent residence, you can already start a

business in Germany.

If you have a work visa or a Blue Card, look for a line that says
"Selbständige Tätigkeit gestattet" (self-employment allowed) on your residence
permit. If you see this line, you can already start a business in Germany.
However, you must keep your job, or your visa can become invalid.
If you have a student visa, you must ask the Ausländerbehörde to change
your residence permit. This will allow you to study and run a business at the
same time. Many students have done it.

Otherwise, you must apply for a German freelance visa. To get a

freelance visa, you must have clients in Germany. You can't get a freelance visa
if all your clients are in other countries.
You can apply for your residence permit and register your business at the
Finanzamt at the same time.
 In this step, you need:

A trade licence (Gewerbeschein)

In this step, you will get:

A residence permit (Aufenthaltstitel)

The permission to be self-employed in Germany
Total time: 2-3 months

Step 8: Tell your health insurance company

If you already have health insurance, you'll need to notify your provider
that you're going freelance. Because your company does not cover half of your
health insurance, it is more expensive for freelancers. Every month, the
insurance provider will deduct money from your bank account.

If you have government-sponsored health insurance, the cost of your

coverage is determined by your income. They utilize your predicted income
because you don't know what your future earnings will be. If you overpay for
insurance, you will be reimbursed later. You will be sent an invoice if you do not
pay enough.

If you work for yourself, private health insurance might save you a lot of
money. I've saved over 350€ a month since switching to private and have better
coverage. Consult a health insurance broker for further information. It's not an
easy choice.

Step 9: Update your website

If you have a website, ensure that it complies with all German and
European regulations. Damage claims may be filed against website operators if
an Impressum is omitted or photographs are erroneously credited.

References:
https://www.auswaertiges-amt.de/en/aussenpolitik/laenderinformationen/
philippinen-node/philippines/233222
https://www.nationsonline.org/oneworld/germany.htm
https://oec.world/en/profile/bilateral-country/deu/partner/phl
https://www.dti.gov.ph/archives/news-archives/ph-germany-bilateral-meeting/
https://www.nationsonline.org/oneworld/germany.htm
https://allaboutberlin.com/guides/freiberufler-or-gewerbe
https://allaboutberlin.com/guides/start-a-business-in-germany
https://2016.export.gov/germany/marketresearchongermany/
countrycommercialguide/doingbusinessingermany/index.asp
https://www.grin.com/document/922898