HSBC Treasury Management Profiles 2018 -

Current section, Introduction


Germany is the largest economy in the EU and the fourth strongest in the world. A strong, industrialised nation, Germany is the world’s third largest exporter after China and the USA, with exports accounting for 46 per cent of its economic output. In June 2017, the country’s trade balance recorded a surplus of EUR22.3 billion, with exporters benefitting from an upturn in global growth and strong eurozone economy. However, uncertainty over the country’s future trade relationship with the USA, its largest export market (8.9 per cent of total German exports), given the strong rhetoric from the current US administration, and over the impact a strong euro could have on exports, could affect Germany’s export growth going forward. The Bundesbank forecasts economic growth of 1.9 per cent for 2017 and 1.7 per cent in 2018. Strong exports, high employment levels (Germany had an unemployment rate of 3.6 per cent in July 2017), real wage increases and domestic demand are credited with this. Robust economic expansion gave Germany a budget surplus of EUR18.3 billion in the first half of 2017. The surplus will be used, in part, to lower government debt, an estimated 68.2 per cent of GDP, in addition to fund infrastructure projects and cut income tax.

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Legal and regulatory

  • Foreign exchange and domestic currency (EUR) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts can be held abroad and are convertible into foreign currency
  • All transactions between residents and non-residents exceeding EUR12,500 must be reported to the Bundesbank monthly. Mandatory reporting does not apply to payments received for exported goods or payments made for imported goods

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  • Resident companies are subject to taxation on their worldwide income
  • Non-resident companies are taxed on German-sourced income only. Branches are treated the same as subsidiaries for tax purposes
  • The effective rate of corporate income tax (CIT) rate is 15.825 per cent (including a solidarity surcharge of 5.5 per cent)
  • Germany is a signatory to the Multilateral Competent Authority Agreement, under which information will be exchanged between tax administrations, giving a single, global picture on some key indicators of economic activity within multinational enterprises

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Payment instruments and systems

  • Credit transfers are used for both high-value corporate and low-value retail payment transactions. Cheque use in Germany is in terminal decline. Payment card use, particularly of debit cards, is rising, with 18.6 per cent of all cashless payments carried out via card. Contactless payment methods are increasing
  • Germany has two national payment systems: TARGET2-BBk, an RTGS system, and EMZ, for domestic and cross-border bulk retail payments. Deutsche Postbank, savings banks and cooperative banks operate proprietary clearing systems
  • SEPA covers all 28 EU member states, the four EFTA member states, Monaco, San Marino and Andorra
  • A SCT Inst scheme will be launched in late 2017 across all SEPA countries. The maximum threshold for SCT Insts will be EUR15,000

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Cash management

  • Domestic and cross-border notional pooling and cash concentration are permitted between resident and non-resident accounts. Cross-border cash concentration and notional pooling are both permitted
  • Automated collection methods are used by the majority of medium-sized and large businesses in Germany

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Electronic banking

  • All German banks use the bank-independent MultiCash electronic banking application. The MultiWeb online banking solution is also offered by most commercial banks. Large companies can also use SWIFT for Corporates
  • Internet and mobile banking services are provided by all of the country’s banks for both corporate and retail purposes. The Giropay online payment service enables retail payments to be authorised between the retailers and their customers
  • In 2016, online and mobile banking services were used by 59 per cent and 46 per cent of individuals respectively

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  • Organisation for Economic Co-operation and Development
  • IFO Institute for Economic Research
  • Federal Statistics Office of Germany

The materials contained on this page were assembled in June 2017 (unless otherwise dated).


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