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Article - Promotion of Foreign Trade and Investment

Promotion of foreign trade and investment


The Federal Government backs the attempts by German firms to develop and secure foreign markets with a wide range of instruments to promote foreign trade and investment.

The German system of promotion of foreign trade and investment is characterised by a division of responsibilities between the state and the private sector. Various institutions, such as German chambers of commerce abroad, foreign missions, and Germany Trade and Invest (GTAI), work closely together to deliver the best possible backing for German firms.

Export initiatives and market entry programme

The Economic Affairs Ministry’s export promotion instruments help small and medium-sized enterprises (SMEs) develop new markets abroad. The programme caters to forward looking industries such as energy, environmental technology, healthcare and civil security, but also to more traditional industries. Coordinated modules enable companies to choose the right measures for them. The market entry programme is targeted at SMEs in all sectors; the export initiatives (for energy, environmental technology, healthcare, civil security technologies) focus on specific industries. Find out more.

Foreign trade-fair programme

For the purpose of promoting foreign trade, the Federal Republic of Germany participates in selected trade fairs and exhibitions abroad. For instance, the Federation will cover part of the costs of joint exhibition stands operated by several SMEs together, to allow these to be involved in trade fairs abroad and gain access to new markets. In the first semester of each year, the ministry works with the Association of the German Trade Fair industry (AUMA) to decide for which particular trade fairs and exhibitions abroad financing will be made available in the following years.

Export credit guarantees (Hermes insurance) and investment guarantees

The Federal Government’s export credit guarantees protect exporters and banks against the risks of unpaid claims in foreign transactions due to economic or political reasons. By providing export credit guarantees, which are available in a broad range of different product variants, the Federal Government takes on a large share of the risk of payment default. These credit guarantees are often what makes it possible for companies to carry out exports and to finance them. Companies receiving cover from credit guarantees pay a premium commensurate with the risk.

Upon application and in exchange for a fee, the Federal Government also provides investment guarantees for companies that have decided to invest abroad, but wish to protect themselves against political risks. The government will only issue guarantees if the company is based in Germany and the investment enjoys an adequate level of protection under the legislation of the relevant country.

Bilateral chambers of industry and commerce

Germany’s bilateral chambers, delegations and representative offices have 140 branches in 92 countries to support the activities of German firms on foreign markets. These institutions work in the interest of the economies of both Germany and the host country and provide wide-ranging services to foster business in both directions. They are thus also acting in the public interest by taking responsibility for a major aspect of the promotion of German foreign trade and investment.

Germany Trade and Invest (GTAI)

Trade and commerce with other countries is a major factor in Germany’s economic growth and prosperity. As a net exporting country, Germany is deeply integrated into the international business community. At the same time, the Federal Republic of Germany profits as a business location when foreign companies set up subsidiaries in the country. That creates jobs.

In times of increased international competition, successful economic promotion is more important than ever. Germany Trade & Invest (GTAI) is the country’s national agency for doing precisely that. GTAI supports both foreign companies and helps them expand their business. Moreover, GTAI publicizes Germany’s advantages as a business location and promotes the internationalization of the economy in German regions undergoing structural change. It also assists German companies looking to do business abroad. Find out more.

Facts and figures on promotion of foreign trade and investment

Symbolicon für Unternehmen in Deutschland

foreign countries
host a German chamber of commerce

Symbolicon für Dampfer

per cent of German firms
export products and services; 97 % of these are SMEs

Symbolicon für Geldscheine

billion euros
of exports were covered by Federal export credit guarantees in 2017

Symbolicon für Wachstumskurve

per cent higher sales abroad
have been achieved by SMEs since 2000

Economic Affairs Ministry in dialogue

Strengthening bilateral economic relations

The Federal Ministry for Economic Affairs and Energy is engaged in a regular dialogue with institutions in Germany and abroad which work on issues of foreign trade and investment. This dialogue aims not only to foster bilateral economic relations but also to promote the activities of German firms abroad.

Important instruments of bilateral economic relations include the joint economic commissions and cooperation councils, and the working groups on commerce and energy of the binational commissions agreed on by the governments of the partner countries. In this context, “joint” signifies that representatives both of the governments and of the business community (business associations, companies) participate in the regular events. The bodies work to promote trade in goods between the economic partners, to intensify mutual investment relations, and to boost technology transfer.

Pro! Africa initiative An equitable partnership on an equal footing

One of two focal areas for Germany’s G20 Presidency was Africa, a continent of opportunities. The Pro! Africa initiative presented by the Federal Ministry for Economic Affairs and Energy on 4 May 2017 is to support economic development in Africa, strengthen sustainable growth, and pave the way for greater cooperation and private-sector involvement. To this end, Germany’s tried and tested instruments to promote foreign trade and investment will be deployed, political cooperation deepened, and successful funding programmes opened up to Africa. A total of €100 million is to be made available for this purpose.

Business councils and business forums

In addition to the joint economic commissions and cooperation councils agreed between the governments, there are also many bodies organised independently by the business community. Many of these take the form of business councils or business forums (cf. Federation of German Industries).

High-level advice for policymakers commissioned by Economic Affairs Ministry

German advisory teams are working on behalf of the Economic Affairs Ministry in Ukraine, Moldova, Belarus and Georgia to draft specific recommendations for action by high-level decision-makers. Their primary task is to provide continuous support and guidance to economic reform processes in these countries. Their work is demand-oriented, they collaborate closely with leading national research institutions and international organisations, and they provide unbiased analyses of current economic policy problems. The main focus of the high-level advice for policymakers is on monetary and exchange rate policy, debt management and the prospects for the development of the private sector, and particularly of SMEs. Since 2007, the project’s mandate has been expanded to included targeted promotion of foreign trade and investment and wide-ranging public relations work.

Freight depot; Quelle: Getty Images/querbeet


Fostering international trade and reducing barriers

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Supporting SMEs

Export initiatives: finding new markets

The Economic Affairs Ministry’s export promotion services help small and medium-sized enterprises to develop new markets abroad. The programme caters to forward looking industries such as energy, environmental technology, healthcare and civil security, but also to more traditional industries. Coordinated modules enable companies to choose the right measures for them.

More and more SMEs are venturing abroad. They particularly want to develop and secure new markets. And the statistics show that they are successful: sales abroad by SMEs rose by 44.9% between 2000 and 2016, to €208.2 billion. Companies wishing to succeed by selling niche products abroad have particularly good prospects: Germany has 1,300 hidden champions – small and mid-sized world market leaders in the fields of electrical equipment, mechanical engineering and industrial products.

The main driving force for success on foreign markets is always the company’s own efforts: They need to be able to rely on a good product, a promising strategy and reliable financing.

A wide range of support for companies

The Federal Ministry for Economic Affairs and Energy supports German firms in a variety of ways: e.g. in the form of trade policy measures which facilitate access to foreign markets. In particular, the ministry offers services to help companies develop foreign markets along the entire chain of export business.

The market entry programme is targeted at SMEs in all sectors; the export initiatives (for energy, environmental technology, healthcare, civil security technologies) focus on specific industries. These services are now better coordinated, in terms of both content and structure, and can have a more targeted impact. This combined strength can also be seen in the new brand “Mittelstand global”. It brings two approaches together: on the one hand, the horizontal SMEs market entry programme and export initiatives in key forward looking fields like green technology, healthcare and civil security. On the other hand, the sector-specific Energy Export Initiative which promotes the market potential of German energy technologies abroad.

The right module for everyone

The Economic Affairs Ministry’s promotional measures provide SMEs with the help they need as they target foreign markets. The services include:

  • advice on the main steps to take before engaging in international business relations
  • sector-specific information on target segments abroad
  • specific contacts with international business partners
  • showcases in Germany and abroad which enable SMEs to present their goods, products and services to an expert audience.
skyline of shanghai; Source: Getty Images/DANNY HU

© Getty Images/DANNY HU

Export initiatives: Finding new markets

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Making foreign business possible

Financing and insurance

The Federal Government helps banks and German firms in all sectors to implement and finance international projects. The Federal Republic of Germany is also a reliable partner for the insurance for exports and investments.

By concluding bilateral investment treaties with developing and emerging economies, the Federal Government creates a stable environment for German foreign direct investment. The treaties furnish the investors with comprehensive legal protection for their investments under international law and make it easier for SMEs in particular to develop foreign markets. Also, they form the basic precondition for the assumption of federal guarantees for German foreign direct investment in order to provide coverage against political risks.

On 5 November 2016, the Federal Government adopted key points for a new export strategy. The aim of the measures is to strengthen the competitiveness of German companies bidding for strategic large-scale projects abroad. As a first step, life was made easier for exporters needing to insure high volumes of services/quantities of parts supplied to projects abroad.

The instruments of AKA Bank, KfW-IPEX and DEG - Deutsche Investitions- und Entwicklungsgesellschaft m.b.H. are available to finance exports and projects abroad.

Export credit guarantees (Hermes insurance)

State export credit guarantees are available to all German exporters as well as to the banks financing these exports. They can be used to insure against default on repayment claims due to economic and political reasons, with the exporting company paying a premium commensurate with the risk. Export credit guarantees do not contain any funding, i.e. monetary grants or subsidies.

Export credit guarantees supplement the products provided by private credit insurers. They are especially called upon in cases where the private sector does not offer any (adequate) insurance cover. These especially include exports of goods and services to emerging and developing economies. Export credit guarantees particularly help SMEs to tap hard-to-access markets and to carry on doing business even when times are difficult.

Investment guarantees

On application, the Federal Government provides guarantees for investments by German-based companies in developing and emerging economies and former countries in transition in order to insure them against political risks. The investment must be eligible for assistance and enjoy adequate legal protection. Commercial risks are not covered.

Guarantees for untied financial loans

Guarantees for untied financial loans are an integral part of the Federal Government’s Raw Materials Strategy. They provide cover for loans from financial institutions based in Germany (and, upon certain conditions, also from foreign banks) for raw materials projects, protecting against the risk of default on repayments for commercial or political reasons. By doing so, they make an important contribution to ensuring that the Federal Republic of Germany is supplied with the raw materials that it needs. Untied financial loans are not tied to German supplies or services, but are rather project-based.

Boosting opportunities to compete for large-scale projects

Strategic support for projects abroad

The German instruments to promote foreign trade and investment have basically proved their worth. However, there is a growing trend that, when it comes to bidding for large-scale projects, competitors from third countries are increasingly backed by their governments and provide extensive funding packages, putting German companies at a disadvantage.

It was against this backdrop that the Federal Ministry for Economic Affairs and Energy commissioned a study that is to provide an assessment of how German companies fare when they want to engage in major international projects in the fields of construction, machinery and plant construction, railways, planning and consultancy, and electronics and electrical engineering. The study found that a fresh impetus is required to improve the competitiveness of German companies wishing to become involved in major strategic projects abroad. You can find the study (in German) here.

The study backs up the Federal Government’s Strategy Paper entitled “A fresh stimulus for tenders for major strategic international projects – improving Germany’s chances” (in German). In particular, the key points set out include the following measures:

  • the political backing of projects in the strategic interest of the Federal Republic of Germany is to be better coordinated.
  • better use is to be made of the existing instruments to promote foreign trade and investment, and these instruments are to be supplemented in certain cases,
  • in individual cases, the instruments to finance strategically relevant projects are to be supplemented via large low-interest loans,
  • the international initiatives for a further development of export financing rules are to be intensified.

New office for "Strategic Projects Abroad"

The Office for Strategic Projects Abroad is based in the Directorate-General for External Economic Relations of the Federal Ministry for Economic Affairs and Energy, and aims to work closely together with the relevant companies and business associations. It is supported by the Federal Government Coordinator for Projects Abroad in the Strategic Interest of the Federal Republic of Germany, Dr Ulrich Nussbaum. An interministerial committee has been set up to coordinate issues relating to the strategic importance of specific projects.

Business opportunities through international organisations

Supporting German firms in international tenders

The Federal Government advises and supports German firms as they bid for contracts advertised by the United Nations, the World Bank Group, regional development banks and other international organisations.

As one of the world’s leading purchasers, the United Nations buys goods and services worth more than USD 17 billion each year. The main procurement centres are New York, Copenhagen, Rome and Geneva, and the procurement takes place decentrally by the various UN agencies.

It is divided fairly equally between goods and services. The leading goods bought by the UN are pharmaceutical products, foodstuffs and construction services, and the main services used are in the field of transport, technology and administrative services. The bilateral chambers of commerce in New York, Copenhagen and Milan (for Rome) offer comprehensive support to German firms bidding for international contracts.

In New York and Geneva, staff at the permanent representations to the United Nations (staff seconded from the Economic Affairs Ministry) are also responsible for procurement issues. They stay in contact with the relevant UN offices and are available as a contact for German firms.

World Bank Group

The International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID) are jointly known as the World Bank Group. The International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) form the World Bank in the narrower sense. Their main task is to promote economic and social progress in developing countries in order to help people live better lives.

Every year, the World Bank provides funding worth approximately $40 billion to projects in developing and emerging economies. Up to 100,000 contracts are concluded with the private sector every year.

The World Bank’s website provides further information about the procurement procedures. Further to this, the liaison office of the Federation of German Industries and the Association of German Chambers of Industry and Commerce in Washington, D.C. (RGIT) has published the brochure (PDF: 680 KB, in German) on its website.

Regional development banks and other organisations

Regional development banks offer further business opportunities for German companies. Their aim is to promote economic and social development. They include the following:

  • African Development Bank (AfDB)
  • Asian Development Bank (AsDB)
  • Asian Infrastructure Investment Bank (AIIB)
  • European Bank for Reconstruction and Development (EBRD) /
  • European Investment Bank (EIB)
  • Inter-American Development Bank (IDB)
  • Caribbean Development Bank (CDB)
  • International Fund for Agricultural Development (IFAD)
  • Organisation for Economic Cooperation and Development (OECD)
  • International Atomic Energy Agency (IAEA)

Further information

  • 31/01/2019 - Press release - Promotion of Foreign Trade and Investment

    Minister Altmaier: Demand for export credit guarantees rises significantly in 2018 - coverage for Africa shows strongest increase

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  • 01/11/2018 - Press release - International Cooperation

    Minister Altmaier visiting Jakarta to hold economic-policy talks and open the 16th Asia-Pacific Conference of German Business

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  • 16/08/2018 - Press release - Promotion of Foreign Trade and Investment

    Export credit guarantees: facilitation of export transactions to Africa is effective

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  • 07/06/2018 - Press release - Promotion of Foreign Trade and Investment

    State Secretary Bareiß: "Today, we are sending out a clear signal for Africa and supporting German SMEs"

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  • 23/04/2018 - Press release - Free Trade Agreements

    State Secretary Bareiß meets with Nicaraguan Trade Minister Solózano

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  • 19/04/2018 - Press release - Funding of SMEs

    State Secretary Wittke: “Team Germany is bringing start-ups from Germany and Thailand together.”

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Worker in front of containers symbolizes Promotion of foreign trade and investment; Source: Getty Images/Yur_Arcurs