Germany has long been recognised as one of the leaders in business and innovation. With its strong industrial base, a thriving startup ecosystem, and government-backed initiatives, the country continues to attract companies from around the world. However, expanding into Germany comes with its own set of challenges, from regulatory complexities to navigating the local business culture.
In this Growth Spotlight episode, we sit down with Christoph Giese, Founder of AUXVISION, to discuss what businesses can expect when entering the German market in 2025. He shares insights on the economic landscape, high-growth industries, common challenges for international startups, and the key success factors for companies looking to establish a strong presence in Germany.
Understanding the economic environment is essential for businesses looking to expand into Germany. The country has faced economic slowdowns in recent years, with GDP contracting by 0.2% in both 2023 and 2024, making it one of the slowest-growing economies in the EU. However, forecasts indicate a potential recovery in 2025, with GDP expected to grow between 0.2% and 1%.
Given the current economic and political landscape, how would you summarise the business climate for startups and scaleups today?
Despite recent stagnation, Germany is still the world’s third-largest economy by nominal GDP, and early signs in 2025 suggest a recovery is underway. The government’s bold €500 billion stimulus package, which exceeds constitutional debt limits, demonstrates a strong political will to modernise and reindustrialise. For startups and scaleups, this presents a unique entry window—particularly in sectors aligned with energy transition, digitisation, and sustainability.
Germany offers unmatched infrastructure, access to the EU single market, and a globally respected culture of engineering and reliability. Top advisors know: entering during a structural transformation gives first movers a long-term advantage.
Germany remains a prime destination for startups, particularly in sectors that align with government priorities and attract private investment. In 2024 alone, €9.5 billion was invested in the country’s tech ecosystem, with deep tech, AI, sustainability, and biotech emerging as key areas of growth.
Which industries are currently seeing the most investment, and what makes them attractive?
Key growth sectors in Germany right now include:
• Deep Tech & AI – Strong support through public grants and a drive to make Germany a leader in regulated, secure AI applications.
• Sustainability & GreenTech – Driven by Germany’s climate goals and EU Green Deal compliance. These industries are not only future-proof but mission-critical for the country’s decarbonisation agenda.
• Biotechnology – Fueled by world-class research institutions and pandemic-era momentum, especially in diagnostics and personalised medicine.
• FinTech & InsurTech – Berlin is still one of Europe’s strongest FinTech ecosystems, with growing demand for innovation in banking and insurance.
• Advanced Manufacturing & Automotive – Focused on next-gen mobility, electric vehicles, and smart factories—Germany’s traditional strengths with a high-tech upgrade.
These sectors are considered “hip” not because of trends, but due to structural demand—they directly address Germany’s long-term transformation, climate commitments, and need for digital competitiveness.
But even in high-potential sectors, success depends on overcoming specific market entry barriers.
While Germany offers many opportunities, international startups must be prepared to navigate a structured regulatory environment and a business culture that prioritises precision and long-term relationships. Market entry can be complex, with strict legal requirements, high competition, and a preference for well-established brands
What are the main challenges international startups and scale-ups face when entering the German market?
Startups typically encounter three main challenges:
1. Complex regulation
Complying with GDPR, CE certifications, ISO standards, and sector-specific rules is non-negotiable. Understanding and adhering to these frameworks is essential from day one.
2. Sales cycles & culture
German companies follow structured, detail-oriented evaluation processes and make decisions strategically. Trust, quality, and long-term value matter far more than hype or speed. As a result, sales cycles are often longer.
The market is also highly competitive, with established local brands dominating many sectors.
3. Legal structuring
Choosing the right entry vehicle—usually a GmbH—is crucial for credibility, opening bank accounts, and attracting investors. However, regional differences matter: for instance, setting up in Berlin is generally faster and more startup-friendly than in Munich.
Additionally, protecting intellectual property is key. Startups should register trademarks and patents early to avoid legal complications down the line.
Despite these challenges, startups that invest in compliance, local expertise, and thorough market research can successfully scale in Germany.
Establishing a legal entity is a crucial step for international startups entering Germany. The most common structure is the GmbH (Gesellschaft mit beschränkter Haftung), which offers both liability protection and strong market credibility."
Setting up a GmbH is relatively straightforward and can be completed in just four to five days if all documentation is in place. The key steps include:
1. Defining the business structure and company name.
2. Preparing legal documents, including the articles of association.
3. Notarising documents to make them legally binding.
4. Opening a business bank account to facilitate transactions.
5. Registering with commercial and tax authorities to obtain legal status.
While the process is efficient, startups should seek expert guidance to ensure full compliance with German regulations.
Christoph:
Here’s a tip few people talk about: where you incorporate your GmbH matters. Cities like Berlin and Hamburg are more flexible and digitally optimised. Some international startups even begin with an EU holding company in Estonia or Ireland before launching their GmbH. This can help optimise tax, equity structuring, and operational flexibility.
Successfully selling in Germany requires a clear value proposition and an understanding of local expectations. German businesses prioritise quality, reliability, and long-term partnerships, making it essential for startups to build trust.
For startups and scale-ups expanding to Germany, what are the key success factors for driving sales and business development in this market?
Startups must adapt to German business culture by clearly defining their product’s value. Quality, precision, and reliability are top priorities for buyers, so companies need to showcase technical excellence and long-term benefits.
Sustainability is another key factor—companies with environmentally responsible solutions gain a competitive edge.
Additionally, detailed product documentation is essential. German buyers expect in-depth information and transparency before making purchasing decisions. Price sensitivity is also a factor, so businesses must justify higher costs with a focus on long-term value.
Localisation is critical—all marketing, sales materials, and customer support should be in German to build trust and credibility. Finally, networking through industry associations and trade events is essential for expanding business connections.
Attending the right events is crucial for startups looking to establish connections, secure funding, and find customers in Germany.
Germany hosts several major events that offer excellent opportunities for startups.
• CeBIT (Hannover) – A top tech and digital innovation conference.
• Bits & Pretzels (Munich) – One of the largest startup networking events.
• NOAH Conference (Berlin) – A key event for scaling companies and investors.
• Hinterland of Things (Düsseldorf) – Focused on B2B startups and corporate connections.
Industry-specific conferences, such as AI and biotech events, also provide valuable networking opportunities.
Christoph:
Don’t just attend—present if possible. And consider lesser-known gems like the GreenTech Festival (Berlin) or BioEurope for biotech partnerships. Also, explore soft-landing programs like GINSEP (German Indian Startup Exchange Program), de:hub (Digital Hub Initiative), which quietly offer foreign startups office space, coaching, and even investor access. It’s a huge missed opportunity if overlooked.
Germany offers one of the strongest business environments in Europe, with access to investment, a well-developed infrastructure, and a structured legal framework. However, success in the German market requires thorough preparation.
Startups must understand regulations, adapt their sales approach, and integrate into Germany’s business culture to achieve long-term success. Companies that invest in localisation, compliance, and networking will be well-positioned to thrive.
Stay tuned for more Growth Spotlight episodes as we continue to bring expert insights on scaling businesses in global markets!
