As two of the biggest economies in Europe, Germany and France both present great opportunities to entrepreneurs looking to launch a business in Europe.
But whilst these two countries are geographical neighbours, they have very different business environments. Because of this, it’s worth weighing up the pros and cons of each before deciding.
Here’s everything you need to know:
Getting A Visa: France vs Germany
If you aren’t an EU citizen, then you’ll need to think about getting the right visa before starting a business in either of these countries.
Here are some ways in:
Germany:
Whilst Germany doesn’t have a golden visa per se, it does allow business owners who establish a business and live in the country for 5 years to gain permanent residency.
The country also has:
The self-employment visa: An option for any business owner that is able to show a regional demand for their product or service. The minimum annual income needed is €9,000.
EU Blue Card: A great option for skilled workers. An EU Blue Card allows people who are highly skilled to gain residency in 25/27 EU countries.
France:
France also has a number of options for those looking to set up businesses in the country, aside from the Blue Card, it also offers:
Talent passport – Company founder must show proof of a viable business plan, with an investment of at least €30,000 in the company.
French tech visa – Designed for startup founders who want to start a business in France.
Self-employed person or liberal activity – Good for freelancers and small business owners who can show proof of funds to support themselves.
Taxes
Every business owner will want to know the tax laws of the country it’s due to set up shop in.
Germany: Germany has one of the highest tax rates of OECD countries, with a corporate tax rate of 30%. VAT is also set at 19%, but is reduced for certain essentials and only needed if turnover is higher than €22,000.
France: France has a slightly lower tax rate of 25%, which is lowered to 15% for small businesses. VAT is set at 20%. France also has a micro-enterprise tax regime, helping small companies thrive in the economy.
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Language
Whilst both countries, especially in major cities, have a large population that speak English, it’s important to consider cultural expectations.
Germany: A lot of big businesses employ English speakers, but knowing German is seen as respectful. Legal documents are all in German, so having basic knowledge at least is important.
France: French businesses prefer to speak in French, so having knowledge of the language is important. All government documents are also in French.
Trade
Both countries operate within the EU, but have slightly different trade ecosystems.
Germany: Germany is a huge exporter that has developed strong ties with China, France and the US. It is the world’s third largest exporter and importer, focusing mainly on machines, cars and chemicals.
France: France is also a big trade body, focusing on cars, aircrafts and medicine. As well as the EU, France also has strong ties with some African markets due to historical ties and common language.
Lifestyle
Both countries come with very different lifestyles, despite being geographically close.
Germany: Germany can be a great country to live in. It has a diverse range of cities to choose from, with many of them (ie Berlin) being much more affordable than major cities in France (like Paris). German lifestyle, especially when it comes to work, tends to be relatively rigid and efficiency focused.
France: France has a more laid-back approach when it comes to working hours, as the country comes with long vacations and strong worker protections. Whilst some cities (Paris) are very expensive, there are others that are more affordable.
France vs Germany: Which Is Better For Setting Up A Business
When working out which option is better, it very much depends on your business! If you are looking to start a tech company, France’s startup support systems might be better. If you plan to export, Germany could be a better option.
Ultimately, which country is right for you is entirely personal. Both offer amazing access to global markets, strong economies and exciting business environments.
Good luck!