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Germany has an open and welcoming attitude towards foreign direct investment (FDI).
The legal framework for FDI in Germany favors the principle of freedom of foreign trade and payment transaction, which is laid down in the Foreign Trade and Payments Act (Außenwirtschaftsgesetz).
The Foreign Trade and Payments Act allows the imposition of restrictions on inward and outward FDI for reasons of foreign policy, foreign exchange, or national security. However, in practice, such restrictions are seldom imposed.
For instance, foreign entities wishing to purchase more than 25 percent equity in German manufacturers of armaments or cryptographic equipment are required to notify the Federal Ministry of Economics and Technology, which then has one month in which to veto the sale. The application of this defense investment provision was extended in 2005 to include tank and tracked vehicle engine manufacturers.
Other than in the defense sector, there is no broad authority to review foreign direct investment.
Foreign Trade and Payments Act
Import of goods into Germany has been almost completely liberalized, especially in the case of industrial products, meaning that the importer needs neither an import permit nor an import declaration. This applies to both residents, meaning natural persons residing in Germany, as well as legal entities or partnerships with a registered office or management headquarters in the territory of the Federal Republic of Germany.
The Federal Office of Economics and Export Control (BAFA) grants import licenses and surveillance documents for certain goods of trade and industry that are subject to quantitative restriction (quotas) or supervision by European regulations.
Import-related information provided by the Federal Office of Economics and Export Control (BAFA)
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