Trading with Germany as an SME

Are you a British business thinking of trading with Germany? Here’s what you need to know.

According to the World Bank, Germany is the fourth largest economy in Europe. With a high level of industrialisation and diversity, it affords numerous opportunities for UK companies offering innovative and high quality products and services.

Strong trade affiliation

Despite Brexit, Germany is the UK’s second largest export market and trading partner. In 2019, Germany accounted for 10% of all UK trade (ONS, 2019), and total trade during that period was £136 billion.

Strong economic structure

Germany’s sophisticated political and economic system is supported by developed infrastructure and legal systems and a  highly skilled workforce. It offers competitive investment incentives and tax regulations and is host to major international trade shows.


Digitisation is impacting all sectors and business models, including manufacturing processes, digital marketplaces and supply chains.

There is demand in areas of particular UK competence, including big data, artificial intelligence (AI), cyber security, food and drink, consumer goods and the Internet Of Things (IOT).

SME Sector

Germany has a high achieving SME sector known as the ‘Mittelstand’. Many of these businesses are world leaders, but require support with digitisation.

‍Exporting to Germany


The standard VAT rate in Germany is 19%, with convenience goods charged at 7%. Some services, such as healthcare and banking are exempt from VAT.

If your customer provides their VAT registration number, goods exported from the UK to Germany are zero-rated.

Payment terms

Standard payment terms for business-to-business transactions are 60 days, or 30 days for public authorities. If terms are not met, you can claim late payment interest.

Routes to market

There are various routes to market that could work for you. Options include;

  • Agents and distributors can be an effective means of developing a presence in Germany. Fluency in German is a major advantage when trading with local partners.
  • Direct sales are possible, but German language skills are essential. Full market coverage would be challenging.
  • E-commerce may be a relatively inexpensive option, since it is both easy and cheap to deliver to Germany.‍

Fast Facts

Ease of doing business

22nd / 190 countries (World Banks, 2020)



Business language


Economic growth

1.5% (2019, IMF)

GDP per capita

£34,958 (IMF, 2019)

Time zone

GMT +1

Thinking of exporting to the EU? Click here to check the risk on invoices to overseas buyers, obligation free!


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