Insight
Bavaria for business
May 2018
Bavaria is both diverse and economically dynamic. With its large share of high-tech companies, industry sits at the heart of the Bavarian economy – vehicle manufacturers such as Audi, BMW, and MAN, global technology company Siemens, and aerospace giant Airbus all play a major role in the success of the Bavarian economy.
Top businesses need top talent
The academic landscape in Bavaria is one of efficiency and versatility that acts as a cornerstone for research and development. With nine state universities, twenty-four universities for applied sciences, several universities for arts, and many private institutes, Bavarian academia offers a genuine impetus for business innovation.
A progressive, business-related academic policy, paired with world-class scientific achievement, places Bavarian universities among the best educational institutions, both nationally and globally. Ludwig Maximilian University of Munich, and Technical University of Munich are both in Bavaria and sit among Germany’s eleven elite universities. This powerful university network promotes an effective transfer of new graduates directly into talent-hungry global enterprises.
Bavaria’s exceptional standards of qualifications and training deliver an abundance of highly skilled and knowledgeable professionals with a work ethic admired around the world. These professionals guarantee the region’s global economic success and is the reason why many international companies choose to operate from this part of Germany.
Connectivity: technology and transport
Bavaria’s strategic position in one of Europe’s most significant logistics hubs, connected by international airports in Munich and Nuremberg, make it an attractive location for multinationals to base their operations.
Bavaria’s capital, Munich, is Europe’s top information communications and technology (ICT) hub. Some 35,000 ICT companies are based here, and Bavaria will receive €1.5 billion in ICT investment during the next five years. Bavaria is undoubtedly an important location for the ICT industry.
As Germany’s leading ICT location – the region is home to 40% of German ICT companies – Bavaria is a driving force in technological innovation as it leads the state-wide expansion of high-performance networks for swift data transfer.
Thanks to the Bavarian river and canal network, and its strategic location in relation to the European highway network, Bavaria is a prominent logistics hub that supports the shipment of goods to destinations all over the world.
Bavaria has more than 40,000 kilometres of well-constructed roads and more than 2,000 kilometres of motorway, ensuring that all Bavarian regions are connected to the intercity railroad transportation network of both Germany and Europe.
An efficient high-speed railroad network connects Bavaria with the metropolitan areas across Germany and Europe. Here in the centre of Europe’s economic area, companies find fast and straightforward access to a market of almost 500 million customers.
Audi recognised the strategic importance of Bavaria as a production location when it established its operations in Ingolstadt, building its own intermodal transhipment terminal.
Government employment support
The Federal Employment Agency (BA) offers a broad range of services to the labour and training markets for individuals, companies and institutions throughout Germany. It also issues guidelines for implementing employment legislation.
The government has also introduced some new initiatives that aim to make it easier for new businesses to recruit employees. These include wage subsidies, under certain conditions, and flexible recruitment schemes.
Time-working arrangements enable businesses to employ staff without signing contracts directly with employees. Instead, staff are provided from a temporary-work agency under freely negotiable terms, a system that drastically improves the time-to-hire for businesses eager to employ the staff they need, when they need them.
Works councils exist to protect employees’ interests and to aid communication between businesses and employees. This system of co-determination is a great example of the German stable business environment: businesses rarely experience loss of production through labour disputes and strikes.
An attractive tax destination
Bavaria offers a competitive system of business taxation. Across Germany, the average total tax burden at 29.8% is below that of other major industrialised countries such as France, Spain, Italy or the United Kingdom. In many regions of Bavaria, the tax burden for business is even lower because their municipalities provide companies with more favourable terms of trade tax.
As global leaders endeavour to make decisions that support and sustain growth and development, the availability of talent, and a progressive approach to technology, have become crucial to global expansion. With an impressive track record for both, any progressive enterprise looking for a strategic European location should seriously consider Bavaria.