Economy Profile of Germany

Ease of Doing Business in Germany

Rankings on Doing Business topics – Germany

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

Preregistration (for example, name verification or reservation, notarization)
Registration in the economy’s largest business city
Postregistration (for example, social security registration, company seal)
Obtaining approval from spouse to start a business or to leave the home to register the company
Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day (2 procedures cannot start on the same day)
Procedures fully completed online are recorded as ½ day
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Standardized Company

Starting a Business – Germany

City Covered Berlin

Paid-in minimum capital requirement EUR 12,500

Indicator	Germany	OECD high income	Best Regulatory Performance
Procedure – Men (number)	9	4.9	1 (2 Economies)
Time – Men (days)	8	9.2	0.5 (New Zealand)
Cost – Men (% of income per capita)	6.5	3.0	0.0 (2 Economies)
Procedure – Women (number)	9	4.9	1 (2 Economies)
Time – Women (days)	8	9.2	0.5 (New Zealand)
Cost – Women (% of income per capita)	6.5	3.0	0.0 (2 Economies)
Paid-in min. capital (% of income per capita)	29.8	7.6	0.0 (120 Economies)

Figure – Starting a Business in Germany – Score

Figure – Starting a Business in Germany and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Germany – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Germany – Procedure, Time and Cost

1 Check company’s name at the local chamber of industry and commerce

Agency : Chamber of Industry & Commerce

To avoid delays with registration, entrepreneurs check availability of company name on the web- page of the Berlin Chamber of Industry and Commerce.

In case of requesting a written consent, it costs EUR 25, oral information over the phone is free of

charge.

Less than one day

(online procedure)

no charge

2 Notarize the Articles of Association and Memorandum of Association

Agency : Civil Law Notary

First, the notarization of the articles of association for a GmbH follow this schedule:

Up to EUR 30.000 share capital: EUR 250
From EUR 30.001 to EUR 50.000 share capital: the fee increases by EUR 20 for each EUR

5.000 of share capital to be registered
From EUR 50.001 to EUR 200.000 share capital: the fee increases by EUR 54 for each EUR

15.000 of share capital to be registered
From EUR 200.001 to EUR 500.000 share capital: the fee increases by EUR 100 for each EUR

30.000 of share capital to be registered.

In addition to the notarization cost for the articles of association, there are other fees to be paid:
Execution of the agreement (notary public): EUR 392,50 for the sample GmbH
Mandatory transformation of the application information into XML-format (notary public):EUR 235,50 for the sample GmbH
EUR 1 publication fee for the online publication

1 day See procedure details

3 Deposit minimum capital into a bank

Agency : Bank

In the case of a GmbH, pursuant to § 7 (2) GmbHG, at least 25 % of the initial capital must be paid-in before registration or, if higher, at least half of the minimum capital, i.e. EUR 12,500.

1 day no charge

4 File the Articles of Association through the notary public and register the company with the local Commercial Register

Agency : Local Commercial Register

Notary must submit to the Commercial Register by electronic form:

application to the commercial register executed by the managing director(s) with the signatures certified by a notary public
the notarized articles of association
the deed of appointment of the directors, if not included in the incorporation deed
a list of the company’s shareholders
the assurance by the managing director(s) that the statutory minimum paid-in capital has been paid in to the free disposition of the management; included in application

Pursuant to the applicable registration laws, the Commercial Register must decide on the company’s registration without undue delay. The Commercial Register publishes the registration on a central electronic platform (www.handelsregister.de) and notifies the local Chamber of Industry and Commerce of the new company.

Since 2018, details of beneficial owners such as name, date of birth, place of residence as well as nature and scope of the commercial interest must be disclosed. The transparency register requires the registration of information for a GmbH’s or UG’s beneficial owner (who is defined as any natural person who directly or indirectly holds (i) more than 25 % of the shares, (ii) controls more than 25 % of the voting rights or (iii) exercises control in a comparable manner.

3 days EUR 150 (registration fee)

+ EUR 250 (filing of shareholder list)

5 Notify the local Office of Business and Standards of the establishment of the company

Agency : Local Trade Department (Gewerbeamt)

Certain businesses (e.g., restaurants and brokers) must apply for a trading permit (Gewerbeerlaubnis). However, the permit does not have to be presented at the time of the registration of the GmbH at the commercial register. If no such permit is required, start-up companies must simply notify the local Trade Office, which issues a trading license (Gewerbeschein). This notification procedure also covers registration formalities with the Central Statistical Office, the relevant Chamber of Industry and Commerce, the local Labor Office, the Social Security and Federal Health Insurance Office.

6 Register with the Professional Association of the relevant trade

Agency : Professional Association (Berufsgenossenschaft)

7 Notify the local Labor Office of the establishment of the company

Agency : Local Labor Office

The notification can be online, in writing or over the phone. The Labor Office assigns an eight-digit operating number, which is needed to report to the Social Security Office.

Less than a day, online procedure (simultaneous with procedures 5, 6, 8,

no charge

The professional associations are carriers of occupational accident insurance. Registration must be done within a week of the founding of the business after the notarization of the Articles of Association.

Less than a day, online procedure (simultaneous with procedures 6, 7, 8,

Less than a day, online procedure (simultaneous with procedures 5, 7, 8,

EUR 31 for the first legal representative

no charge

8 Register employees for health and social insurance

Agency : Social Security Office

Each employee chooses a health insurance company and notifies the employer therof. The entrepreneur then registers the employee with health insurance electronically by using a specific data transfer program (sv.net) which is provided by the health insurance companies.The health insurance company then notifies the annuity insurance carrier. It also collects payments for other social security agencies.

Less than a day, online no charge procedure (simultaneous

with procedures 5, 6, 7,

9 Register with the local Tax Office and obtain VAT number

Agency : Local Tax Office

Registration must be done within 4 weeks of the opening of the business and not later than a month after the notarization of the Articles of Association. After the Tax Office is notified of the company’s business activity by the Trade Office, the Tax Office sends the company a questionnaire requesting the company’s business data. In addition, the VAT application is part of the general documentation that needs to be submitted to the competent local Tax Office and can be done fully online. The application will be forwarded automatically to the Federal Central Tax Office. The application and issuance of the VAT number is free of charge.

Less than a day, online procedure (simultaneous with procedures 5, 6, 7,

no charge

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019.See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates
Submitting all required notifications and receiving all necessary inspections
Obtaining utility connections for water and sewerage
Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes

Building quality control index (0-15)

Quality of building regulations (0-2)
Quality control before construction (0-1)
Quality control during construction (0-3)
Quality control after construction (0-3)
Liability and insurance regimes (0-2)
Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.
Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

Will be used for general storage activities, such as storage of books or stationery.
Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.
Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.
Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.
Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Germany

Figure – Dealing with Construction Permits in Germany – Score

Figure – Dealing with Construction Permits in Germany and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Germany – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Germany and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Germany – Procedure, Time and Cost

1 Obtain topographic survey of the land plot

Agency : Berlin District Office

A topographic survey of the land plot must be obtained prior to developing the architectural plans of the warehouse.

30 days EUR 2,175

2 Obtain building permit

Agency : Building Department

The Building Procedures Regulation was amended on March 22, 2013 and corrected on May 2, 2013. According to the amendment the building permission procedure documents must be submitted electronically since April 1, 2013.

The building permit grants the right to build on a plot and authorizes construction as well. There are several building departments (Bauaufsichtsämter) located in the districts of Berlin. The location of the building site in Berlin determines which building department is responsible for issuing the building permit.

To obtain a construction permit, BuildCo must provide the building authority with, among other documents, project design drawings, a building specification including a detailed description of the future use of the building, proof of stability, and other necessary proofs (e.g. heat insulation, sound insulation). The architect needs to sign the application for the building permit and must attach the design drawings, usually scaled at 1:100. Static calculations must be added. The building authority will produce static expert double-check calculations (carried out by a "Pruefstatiker"). The building authority will then forward the application to other relevant departments (e.g., the fire department, planning department).

The Building Procedures Regulation (Bauverfahrensverordnung, abbreviated as BauVerfVO) was amended on 22nd March 2013. According to the amendment, the applicant is now obliged to submit the building permission procedure documents electronically in Portable Document (PDF/A).

Under a revised Berlin State Law, the Building Code Berlin (Bauordnung Berlin, abbreviated as BauO Bln), effective September 29, 2005, amended by Regulation from June 29, 2011, certain constructions require only a simple building permit (Section 64 BauO Bln) or a waiver (Section 63 BauO Bln, maximum value EUR 3,000.00). In the case of a simplified building permit under Section 64 BauO Bln, the application will be deemed to be complete and sufficient unless the building department notifies the applicant to the contrary within three weeks of receiving the application. If the building department remains silent for four weeks, the application will be deemed granted and construction may commence (Section 70, Paragraphs 3 and 4 BauO Bln, and Section 71, Paragraph 7, Item 1 BauO Bln). It is the duty of the architect or the engineer to supervise compliance of the construction project with the applicable state law.

In addition, upon receiving the application for a normal building permit, the building department has to notify the applicant within 14 days if the application is complete or if additional documents or plans are required (Section 70, Paragraph 1 and 2 BauO Bln). If the applicant fails to amend the application within a period determined by the building authority, the application will be deemed abandoned. If the application is complete, the building department will contact other departments involved (i.e., the fire safety and public street supervision departments). If the other departments fail to make a decision within a month, they will be deemed to have consented to the issuance of the permit. If the application is not complete for the purpose of these other departments, then this period of a month is interrupted until the application is completed by the applicant. Upon receiving consent from the other departments, the building department again has a month to decide on the application for a building permit.

3 Apply for approval of static calculation

The building authority appoints an independent engineer (either from a private company or from within the authority) who is responsible for verifying the static calculations (the “Pruefingenieur”).

A legal certificate of static stability, issued by a “Pruefingenieur”, must be available at the time of
start of construction.
The cost of an independent engineer to double-check the static stability is calculated by a
Regulation concerning the work of the “Pruefingenieure” and the payment (Bautechnische
Prüfungsverordnung, abbreviated as BauPrüfV, effective February 12, 2010, amended by
Regulation from 17 March, 2017). In the case of the warehouse considered here, the cost for an
independent engineer is about EUR 4,288.00. The calculation is based on a volume of 3900 cubic
meters and a chargeable building value per cubic meters (Appendix 1 to Section 27 Paragraph 1
BauPrüfVO, Item 15). A structural framework of average difficulty considered (“Bauwerksklasse” 2-
3, Appendix 2 to Section 27 Paragraph 4 BauPrüfVO) gives a basic fee of about EUR 4,288.00 for
a legal certificate of static stability, issued by a “Pruefingenieur”.
4 Receive fire safety inspection from District Chimney Sweeper Agency : District Chimney Sweeper	1 day	EUR 31
Before completion of the building shell, BuildCo must provide the building authority with a
certificate confirming the suitability of the chimneys. Such a certificate by the District Chimney
Sweeper is mentioned in Section 81, Paragraph 4 BauO Bln. The cost is EUR 31.20 per hour "
Applicable law: Verordnung über die Kehrung und Überprüfung von Anlagen (KÜO), effective June
16, 2009, amended by Regulation from April 8, 2013.
Changes relate to the harmonization of different ordinances in the federal states. Cost for
inspection are based on Paragraph 6 KÜO). The inspection may take more than one hour, but it
will not take more than a day. An appointment can be made on short notice, probably 1 — 2 weeks
before the day of inspection.
This procedure is for fire safety and for the cases where the heating is done by gas boilers.
However, some buildings in Berlin will use a so called "long distance heating" system to heat the
building, which is essentially heating by hot water from a centralized boiler. In this case, this
procedure would not be required.
5 Receive inspection of the building shell Agency : Building Department	1 day	EUR 2,600
The notification must be made 2 weeks before the completion of the building shell. The building
authority may then decide on its own whether it will inspect the site (the likelihood is 10%); 2
weeks after the notification, BuildCo may start with interior fittings.
6 Receive inspection after completion of the building ("Foermliche Bauabnahme") Agency : Building Department	1 day	no charge
The notification must be made 2 weeks before the completion of the building shell. The building
authority may then decide on its own whether it will inspect the site (the likelihood is 10%); 2
weeks after the notification, BuildCo may start to use the building.
7 Apply for water connection Agency : Berliner Wasserbetriebe	1 day	EUR 7,500
BuildCo makes an application to be connected to water and the following documents must be
submitted:
Proof of ownership
A copy of the official site plan indicating the desired pipework routing and water meter location on
a scale of 1:200
A copy of your building installation plan or ducting scheme
A copy of the sectional view of your building
8 Receive inspection by water company Agency : Berliner Wasserbetriebe	1 day	no charge
An offer will be made and a plumbing confirmation form will also be sent. This form must be
completed and signed by the plumber and the original sent back to the agency.
An appointment date will be provided when construction work for water and sewage will be
completed.
9 Obtain water connection Agency : Berliner Wasserbetriebe	45 days	no charge
The work and water connection will be done together. All building connection work is carried out
by the Berliner Wasserwerke or by licensed sub-contractor from the agency.

Takes place simultaneously with previous procedure.

Details – Dealing with Construction Permits in Germany – Measure of Quality

	Answer	Score
Building quality control index (0-15)		9.5
Quality of building regulations index (0-2)		1.0
How accessible are building laws and regulations in your economy? (0-1)	Available online; Free of charge.	1.0
Which requirements for obtaining a building permit are clearly specified in the building regulations or on any accessible website, brochure or pamphlet? (0-1)	List of required documents; Fees to be paid.	0.0
Quality control before construction index (0-1)		1.0
Which third-party entities are required by law to verify that the building plans are in compliance with existing building regulations? (0-1)	Licensed engineer; Private firm.	1.0
Quality control during construction index (0-3)		2.0
What types of inspections (if any) are required by law to be carried out during construction? (0-2)	Inspections at various phases.	1.0
Do legally mandated inspections occur in practice during construction? (0-1)	Mandatory inspections are always done in practice.	1.0
Quality control after construction index (0-3)		2.0
Is there a final inspection required by law to verify that the building was built in accordance with the approved plans and regulations? (0-2)	Yes, final inspection is done by government agency.	2.0
Do legally mandated final inspections occur in practice? (0-1)	Final inspection does not always occur in practice.	0.0
Liability and insurance regimes index (0-2)		0.5
Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1)	Construction company.	0.5
Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1)	No party is required by law to obtain insurance .	0.0
Professional certifications index (0-4)		3.0
What are the qualification requirements for the professional responsible for verifying that the architectural plans or drawings are in compliance with existing building regulations? (0-2)	University degree in architecture or engineering; Passing a certification exam.	1.0
What are the qualification requirements for the professional who supervises the construction on the ground? (0- 2)	Minimum number of years of experience; University degree in engineering, construction or construction management; Passing a certification exam.	2.0

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessary clearances and permits
Completing all required notifications and receiving all necessary inspections
Obtaining external installation works and possibly purchasing material for these works
Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering information
Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)

Duration and frequency of power outages (0–3)
Tools to monitor power outages (0–1)
Tools to restore power supply (0–1)
Regulatory monitoring of utilities’ performance (0–1)
Financial deterrents limiting outages (0–1)
Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

Is owned by a local entrepreneur and is used for storage of goods.
Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.
Is a new construction and is being connected to electricity for the first time.
Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.
Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Standardized Connection

Name of utility Vattenfall Europe Distribution Berlin GmbH

Getting Electricity – Germany

Figure – Getting Electricity in Germany – Score

Figure – Getting Electricity in Germany and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Germany – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

reflected here, see the summary below.

Figure – Getting Electricity in Germany and comparator economies – Measure of Quality

Details – Getting Electricity in Germany – Procedure, Time and Cost

Conclude supply agreement with electricity supplier

Agency : Vattenfall Europe Sales GmbH

The customer concludes a supply contract with Vattenfall Sales (VE Sales) Berlin. The customer selects a tariff on the website of VE Sales or the customer has a conversation with a representative of the business client team at VE Sales. Afterwards, the customer concludes a supply contract.

Submit application to distribution utility and await estimate

Agency : Vattenfall Europe Distribution Berlin GmbH

The application can be submitted online by email. Documents to be submitted are: Architect’s plan indicating the room for the grid connection, a route in the building and on the lot for the cable, power performance balance for the building, technical information of the connection, registration number of the electrician and map of the area (“Flurplan”). The application can only be submitted by a registered electrician with the utility. This is required because the application is also of technical nature and technical information is required in the application form. The electrician responsible for the internal wiring of the warehouse has to be listed at the local distribution system operator (Full License) or via a “guest pass” from another German distribution system operator (Guest License). There are no costs for the registration process.

The installer identification from any other DSO of the electrician or the Master craftsman’s diploma, trading license and a standard form of the distribution operator is needed for the listing process. To be authorized to install internal wiring, an electrician has to be a Master electrician (“Elektromeister”). Master electrician ("Elektromeister") means he/she is licensed with the Chamber of Commerce and has a Craftsman Diploma. This is the general procedure and requirement to be allowed to work as electrician in Germany and to do the internal wiring. The Master electrician ("Elektromeister") is always legally responsible for the internal wiring. All Master electricians (“Elektromeister”) in Berlin are registered with Vattenfall. This license is valid for all his/her projects in the area of the local DSO.

3 Make payment and await completion of external works and meter installation by utility

Agency : Vattenfall Europe Distribution Berlin GmbH

The customer pays the estimate at a bank through a wire transfer. The required external connection works are underground work for the cable, building of metering, building of the grid connection, and connection of the building to the grid. The meter gets installed at the same time when the connection is done and by the same or another department if the meter installation is done by Vattenfall DSO. However, in most cases, the private electrician (the Master electrician) who did the internal wiring would install the meter.

14 calendar days

EUR 15,500

At this moment, this private electrician has to hand over to Vattenfall DSO a form ("Errichterbescheinigung") that certifies that he installed the internal wiring according to technical and safety standards. In 98% of all cases, the internal wiring and the external connection works are done at the same time and usually the external connection works are completed before the

internal wiring as this is usually more complex. Electricity starts flowing immediately

Electricians working in the field of industrial (warehouses) connections are registered with Vattenfall in a second form through training. Those electricians receive a number ("Installateurnummer") and are allowed to install the meter. All electricians in Berlin that are working in the field of industrial (warehouses) connections are certified by Vattenfall. The list of those certified electricians is on the website of Vattenfall and can be obtained at the Guild of electricians ("Elektroinnung") as well. There is no external and no internal inspection. The internal wiring is never inspected by Vattenfall DSO, as they trust the electricians through a process of registration and diplomas.

14 calendar days EUR 0

12 calendar days EUR 0

Takes place simultaneously with previous procedure.

Details – Getting Electricity in Germany – Measure of Quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019.See the methodology for more information.

What the indicators measure

Procedures to legally transfer title on immovable property (number)

Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)
Registration procedures in the economy's largest business city.
Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of property value)

Official costs only (such as administrative fees, duties and taxes).
Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)

Reliability of infrastructure index (0-8)
Transparency of information index (0–6)
Geographic coverage index (0–8)
Land dispute resolution index (0–8)
Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

Are limited liability companies (or the legal equivalent).
Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Are 100% domestically and privately owned.
Perform general commercial activities.

The property (fully owned by the seller):

Has a value of 50 times income per capita, which equals the sale price.
Is fully owned by the seller.
Has no mortgages attached and has been under the same ownership for the past 10 years.
Is registered in the land registry or cadastre, or both, and is free of title disputes.
Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.
Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.
Will not be subject to renovations or additional construction following the purchase.
Has no trees, natural water sources, natural reserves or historical monuments of any kind.
Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.
Has no occupants, and no other party holds a legal interest in it.

Registering Property – Germany

Indicator	Germany	OECD high income	Best Regulatory Performance
Procedures (number)	6	4.7	1 (5 Economies)
Time (days)	52	23.6	1 (2 Economies)
Cost (% of property value)	6.6	4.2	0.0 (Saudi Arabia)
Quality of the land administration index (0-30)	23.0	23.2	None in 2018/19

Figure – Registering Property in Germany – Score

Figure – Registering Property in Germany and comparator economies – Ranking and Score

DB 2020 Registering Property Score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Germany – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Germany and comparator economies – Measure of Quality

Details – Registering Property in Germany – Procedure, Time and Cost

1 Fulfill the pre-conditions for the maturity of the purchase price – the priority notice

Agency : Land Registry 'Grundbuchamt'

The following pre-conditions must be fulfilled for the maturity of the purchase price: (i) Registration of the priority notice in the Land Register (not mandatory but usual practice to secure the purchasers rank in the land register and avoid a third party purchasing the property in good faith);

(ii) Consent to the cancellation of existing encumbrances; (iii) Waiver of statutory preemption rights or negative certificate.

The priority notice prevents a purchase by a third party of good faith between the conclusion of the purchase agreement and registration of the purchaser; it usually ranks after the existing encumbrances and prior to any future encumbrances at the time of notarization. This notice provides a very high level of legal and economic security and certainty. Upon registration, the notice protects against all intervening interests (including seller’s insolvency) pending completion of the transaction and actual change in registered ownership. By use of this notice, a purchaser is legally protected against potential risks at an extremely early stage of the conveyancing transaction. Therefore, such notation is generally entered in the public register by the notary immediately following the authentication of the purchase contract. From that moment onward, the purchaser can rest assured that he can acquire title to the property if all prerequisites to maturity of the purchase price are fulfilled.

2 Obtain the waiver of preemption rights from the Municipality of Berlin

Agency : Muncipality of Berlin

The consent or negative attest of the competent authority regarding any statutory pre-emption rights is required and applicable to all properties in Berlin. The civil council ("Bezirksamt") issues the consent or a negative attest to the transaction. The time limit given by the statute is that the civil council may exercise the right of pre-emption two months (preclusion period) after the delivery of a copy of the notarized sale and transfer agreement. The respective preemption right for the public authorities/civil council mentioned in the survey is regulated under Section 24, 25 and 28 German Federal Building Code (Baugesetzbuch) and Section 66 German Federal Nature Conservation Act (Bundesnaturschutzgesetz). Under specific circumstances the public authorities could have a statutory preemption right to coordinate the urban land-use planning. These rules are applicable to all properties in Berlin. It is necessary therefore to provide the land register with either a consent of the public authorities to the transfer or an attest that the statutory right of preemption either does not exist or is not exercised.

3 Obtain the land extract from the Land Registry

Agency : Land Registry 'Grundbuchamt'

The notary obtains the information referred to the property, e.g. from the land registry to "name" the object in the contract and to see if it is free of burdens and mortgages. A notary has a privileged access to the land register to obtain the extracts. Notaries have on-line access to such land registers which are already converted to electronic land registers. They are in the position to review the extracts very shortly before the notarization from their own offices. The land registry in Berlin is entirely computerized, and so extracts can be obtained online.

If all pre-conditions to the maturity "Fälligkeit" of the purchase price, usually collected and examined by the notary, have been fulfilled, the notary issues a statement of maturity "Fälligkeitsmitteilung" to the purchaser. If the respective declarations in rem have already been provided for in the sale and transfer agreement, the notary is usually bound by an escrow agreement not to forward them to the land register until the purchase price has been paid.

1 day EUR 10; (EUR 10 (single copy) or EUR 20 (certified copy))

4 Notarize and sign the purchase sale agreement between the parties

Agency : Civil Law Notary Office

In case of real property the German law says the agreement has to be notarized (Section 311b German Civil Code). The signature between the parties must happen in front of the notary.

The notary is obliged to notify the responsible tax authority of each sale and transfer agreement effected by them. A certified copy of the act is transmitted along with the notification. Even if the transaction is exempt from taxation, the obligation to notify must be fulfilled. This notification is considered as a tax declaration. The notary must proceed to the notification within at least two weeks after the authentication.

2 days EUR 8,337.5;

(Authentication =2 base fee + Support of 0.5 base fee.)

5 Payment of the transfer tax and obtaining the statement of innocuousness (Unbedenklichkeitsbescheinigung)

Agency : Tax Authority 'Finanzamt'

The responsible tax authority will then issue a real estate transfer tax assessment and send it immediately, but at the latest within six weeks upon notification, to the buyer. In practice, this usually takes about one week. After full payment of the real estate transfer tax, the tax authority issues a statement of innocuousness (Unbedenklichkeitsbescheinigung) and sends it immediately, but at the latest within the following ten days, to the notary. In practice, this usually takes about two days.

15 days EUR 125,816.46; (6% of

purchase price)

6 Apply for the registration of the new owner and delete the priority notice at the land registry

Agency : Land Registry 'Grundbuchamt'

After receiving the statement of innocuousness, the notary applies for the registration of the new owner in the land register, if all other prerequisites for the transfer of ownership have been fulfilled and deletion of the priority notice is submitted. A registration fee is paid depending on the property value. The deletion fee for the cancellation of the priority notice also depends on the value. It is important to note that there is a possibility to register the title through an expedited Procedure, whereby the notary acts as a Trustee and the client can pay through a trust account (Notartreuhandkonto). This makes it possible to obtain the legal title faster, possibly in 2-5 days. However, this occurs only with a small proportion of property title transfers. The documentation shall include:

Clearance Certificate (obtained in Procedure 3)
Consent of public authority/civil council to the transfer or attest that the statutory right of pre- emption either does not exist or is not exercised (obtained after Procedure 2)
Consents to the cancellation (obtained in Procedure 2 and sent to the notary)
Declarations in rem “dingliche Erklärungen” for the registration of the purchaser as owner

15 days EUR 3,360; (Registration Fee = 1 base fee + EUR 25 (flat fee for the deletion of the priority notice))

Takes place simultaneously with previous procedure.

Details – Registering Property in Germany – Measure of Quality

	Answer	Score
Quality of the land administration index (0-30)		23.0
Reliability of infrastructure index (0-8)		7.0
Type of land registration system in the economy:	Deed Registration System
What is the institution in charge of immovable property registration?	Land Registry ("Grundbuchamt") of Berlin
In what format are past and newly issued land records kept at the immovable property registry of the largest business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?	Computer/Scanned	1.0
Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)?	Yes	1.0
Institution in charge of the plans showing legal boundaries in the largest business city:	Real property cadastre ("Liegenschaftskatast er")
In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business city of the economy—in a paper format or in a computerized format (scanned or fully digital)?	Computer/Fully digital	2.0
Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)?	Yes	1.0
Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases?	Different databases but linked	1.0
Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties?	Yes	1.0
Transparency of information index (0–6)		2.0
Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city?	Only intermediaries and interested parties	0.0
Is the list of documents that are required to complete any type of property transaction made publicly available– and if so, how?	Yes, online	0.5
Link for online access:	https://service.berlin.d e/dienstleistung/3270 42/
Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how?	Yes, online	0.5
Link for online access:	https://www.gesetze- im- internet.de/gnotkg/ind ex.html
Does the agency in charge of immovable property registration agency formally commit to deliver a legally binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard?	No	0.0
Link for online access:
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration?	No	0.0
Contact information:
Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency?	No	0.0
Number of property transfers in the largest business city in 2018:
Who is able to consult maps of land plots in the largest business city?	Anyone who pays the official fee	0.5
Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?	Yes, online	0.5

Link for online access:	https://www.berlin.de/
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Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and if so, how does it communicate the service standard?	No	0.0
Link for online access:
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency?	No	0.0
Contact information:
Geographic coverage index (0–8)		8.0
Are all privately held land plots in the largest business city formally registered at the immovable property registry?	Yes	2.0
Are all privately held land plots in the economy formally registered at the immovable property registry?	Yes	2.0
Are all privately held land plots in the largest business city mapped?	Yes	2.0
Are all privately held land plots in the economy mapped?	Yes	2.0
Land dispute resolution index (0–8)		6.0
Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties?	Yes	1.5
Legal basis:	§§ 873, 925 German Civil Code (Bürgerliches Gesetzbuch, BGB)
Is the system of immovable property registration subject to a state or private guarantee?	Yes	0.5
Type of guarantee:	State guarantee
Legal basis:	§§ 873, 892, 925 German Civil Code (Bürgerliches Gesetzbuch, BGB)
Is there a is a speciﬁc, out-of-court compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry?	No	0.0
Legal basis:	§ 892 German Civil Code (Bürgerliches Gesetzbuch, BGB).
Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)?	Yes	0.5
If yes, who is responsible for checking the legality of the documents?	Notary;
Does the legal system require verification of the identity of the parties to a property transaction?	Yes	0.5
If yes, who is responsible for verifying the identity of the parties?	Notary;
Is there a national database to verify the accuracy of government issued identity documents?	Yes	1.0
What is the Court of first instance in charge of a case involving a standard land dispute between two local businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city?	Regional Court of Berlin ("Landgericht Berlin")
How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)?	Between 1 and 2 years	2.0
Are there publicly available statistics on the number of land disputes at the economy level in the ﬁrst instance court?	No	0.0
Number of land disputes in the economy in 2018:

Equal access to property rights index (-2–0)		0.0
Do unmarried men and unmarried women have equal ownership rights to property?	Yes
Do married men and married women have equal ownership rights to property?	Yes	0.0

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019.See the methodology for more information.

What the indicators measure

Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)
Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)

Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)

Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)

Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

ABC is a domestic limited liability company (or its legal equivalent).
ABC has up to 50 employees.
ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Germany

Indicator	Germany	OECD high income	Best Regulatory Performance
Strength of legal rights index (0-12)	6	6.1	12 (5 Economies)
Depth of credit information index (0-8)	8	6.8	8 (53 Economies)
Credit registry coverage (% of adults)	1.8	24.4	100.0 (2 Economies)
Credit bureau coverage (% of adults)	100.0	66.7	100.0 (14 Economies)

Figure – Getting Credit in Germany – Score

Figure – Getting Credit in Germany and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Germany and comparator economies

Details – Legal Rights in Germany

Strength of legal rights index (0-12) 6

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Yes

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy?

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of No collateral?

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? No

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes

Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

Figure – Credit Information in Germany and comparator economies

Details – Credit Information in Germany

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Coverage	Credit bureau	Credit registry
Number of individuals	67,700,000	606,112
Number of firms	6,000,000	369,084
Total	73,700,000	975,196
Percentage of adult population	100.0	1.8

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification

from managerial position(s) for one year or more, rescission of the transaction)
Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

Is a publicly traded corporation listed on the economy’s most important stock exchange.
Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speciﬁcally required by law.
Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
Is a manufacturing company with its own distribution network.

The transaction involves the following details:
Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s ﬁve-member board.
Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
Mr. James proposes that Buyer purchase Seller’s unused ﬂeet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Stock exchange information

Stock exchange Frankfurt Stock Exchange

Protecting Minority Investors – Germany

Stock exchange URL https://deutsche-boerse.com

Listed firms with equity securities 6823

City Covered Berlin

Indicator	Germany	OECD high income	Best Regulatory Performance
Extent of disclosure index (0-10)	5.0	6.5	10 (13 Economies)
Extent of director liability index (0-10)	5.0	5.3	10 (3 Economies)
Ease of shareholder suits index (0-10)	5.0	7.3	10 (Djibouti)
Extent of shareholder rights index (0-6)	5.0	4.7	6 (19 Economies)
Extent of ownership and control index (0-7)	5.0	4.5	7 (9 Economies)
Extent of corporate transparency index (0-7)	6.0	5.7	7 (13 Economies)

Figure – Protecting Minority in Germany – Score

Score – Protecting Minority Investors

Figure – Protecting Minority Investors in Germany and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conﬂict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Germany and comparator economies – Measure of Quality

Details – Protecting Minority Investors in Germany – Measure of Quality

	Answer	Score
Extent of conflict of interest regulation index (0-30)
Extent of disclosure index (0-10)		5.0
Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)	Board of directors excluding interested members	2.0
Must an external body review the terms of the transaction before it takes place? (0-1)	No	0.0
Must Mr. James disclose his conflict of interest to the board of directors? (0-2)	Existence of a conflict without any specifics	1.0
Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)	Disclosure on the transaction only	1.0
Must Buyer immediately disclose the transaction to the public? (0-2)	Disclosure on the transaction only	1.0
Extent of director liability index (0-10)		5.0
Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Buyer? (0-1)	Yes	1.0
Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)	Liable if negligent	1.0
Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)	Liable if negligent	1.0
Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)	Yes	1.0
Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)	No	0.0
Is Mr. James disqualified upon a successful claim by shareholders? (0-1)	Yes	1.0
Can a court void the transaction upon a successful claim by shareholders? (0-2)	Only in case of fraud or bad faith	0.0
Ease of shareholder suits index (0-10)		5.0
Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? (0-1)	Yes	1.0
Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)	Any relevant document	3.0
Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)	No	0.0
Can the plaintiff directly question the defendant and witnesses at trial? (0-2)	No	0.0
Is the level of proof required for civil suits lower than that of criminal cases? (0-1)	No	0.0
Can shareholder plaintiffs recover their legal expenses from the company? (0-2)	Yes if successful	1.0
Extent of shareholder governance index (0-20)
Extent of shareholder rights index (0-6)		5.0
Does the sale of 51% of Buyer's assets require shareholder approval?	No	0.0
Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders?	Yes	1.0
Must Buyer obtain its shareholders’ approval every time it issues new shares?	Yes	1.0
Do shareholders automatically receive preemption rights every time Buyer issues new shares?	Yes	1.0
Do shareholders elect and dismiss the external auditor?	Yes	1.0
Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?	Yes	1.0
Extent of ownership and control index (0-7)		5.0
Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?	Yes	1.0
Must the board of directors include independent and nonexecutive board members?	Yes	1.0

Can shareholders remove members of the board of directors without cause before the end of their term?	No	0.0
Must the board of directors include a separate audit committee exclusively comprising board members?	No	0.0
Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?	Yes	1.0
Must Buyer pay declared dividends within a maximum period set by law?	Yes	1.0
Is a subsidiary prohibited from acquiring shares issued by its parent company?	Yes	1.0
Extent of corporate transparency index (0-7)		6.0
Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?	Yes	1.0
Must Buyer disclose information about board members’ primary employment and directorships in other companies?	Yes	1.0
Must Buyer disclose the compensation of individual managers?	No	0.0
Must a detailed notice of general meeting be sent 21 days before the meeting?	Yes	1.0
Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda?	Yes	1.0
Must Buyer's annual financial statements be audited by an external auditor?	Yes	1.0
Must Buyer disclose its audit reports to the public?	Yes	1.0

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)
Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)

Collecting information, computing tax payable
Preparing separate tax accounting books, if required
Completing tax return, filing with agencies
Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)

Profit or corporate income tax
Social contributions, labor taxes paid by employer
Property and property transfer taxes
Dividend, capital gains, financial transactions taxes
Waste collection, vehicle, road and other taxes

Postfiling Index

Time to comply with VAT refund (hours)
Time to obtain VAT refund (weeks)
Time to comply with a corporate income tax correction (hours)
Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:

In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:

An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – Germany

Indicator	Germany	OECD high income	Best Regulatory Performance
Payments (number per year)	9	10.3	3 (2 Economies)
Time (hours per year)	218	158.8	49 (3 Economies)
Total tax and contribution rate (% of profit)	48.8	39.9	26.1 (33 Economies)
Postfiling index (0-100)	97.7	86.7	None in 2018/19

Figure – Paying Taxes in Germany – Score

Figure – Paying Taxes in Germany and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Germany and comparator economies – Measure of Quality

Details – Paying Taxes in Germany

Details – Paying Taxes in Germany – Tax by Type

Taxes by type	Answer
Profit tax (% of profit)	23.2
Labor tax and contributions (% of profit)	21.5
Other taxes (% of profit)	4.1

Details – Paying Taxes in Germany – Measure of Quality

	Answer	Score
Postfiling index (0-100)		97.7
VAT refunds
Does VAT exist?	Yes
Does a VAT refund process exist per the case study?	Yes
Restrictions on VAT refund process	none
Percentage of cases exposed to a VAT audit (%)	0% – 24%
Is there a mandatory carry forward period?	No
Time to comply with VAT refund (hours)	0.0	100
Time to obtain VAT refund (weeks)	5.0	96.2
Corporate income tax audits
Does corporate income tax exist?	Yes
Percentage of cases exposed to a corporate income tax audit (%)	0% – 24%
Time to comply with a corporate income tax correction (hours)	4.5	94.5
Time to complete a corporate income tax correction (weeks)	No tax audit per case study scenario	100

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019.See the methodology for more information.

What the indicators measure

Documentary compliance

Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy
Obtaining, preparing and submitting documents required by destination economy and any transit economies
Covers all documents required by law and in practice, including electronic submissions of information

Border compliance

Customs clearance and inspections
Inspections by other agencies (if applied to more than 20% of shipments)
Handling and inspections that take place at the economy’s port or border

Domestic transport

Loading or unloading of the shipment at the warehouse or port/border
Transport between warehouse and port/border
Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.
It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.
The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.
All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.
A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.
Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – Germany

Indicator	Germany	OECD high income	Best Regulatory Performance
Time to export: Border compliance (hours)	36	12.7	1 (19 Economies)
Cost to export: Border compliance (USD)	345	136.8	0 (19 Economies)
Time to export: Documentary compliance (hours)	1	2.3	1 (26 Economies)
Cost to export: Documentary compliance (USD)	45	33.4	0 (20 Economies)
Time to import: Border compliance (hours)	0	8.5	1 (25 Economies)
Cost to import: Border compliance (USD)	0	98.1	0 (28 Economies)
Time to import: Documentary compliance (hours)	1	3.4	1 (30 Economies)
Cost to import: Documentary compliance (USD)	0	23.5	0 (30 Economies)

Figure – Trading across Borders in Germany – Score

Figure – Trading across Borders in Germany and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in Germany – Time and Cost

Details – Trading across Borders in Germany

Details – Trading across Borders in Germany – Components of Border Compliance

	Time to Complete (hours)	Associated Costs (USD)
Export: Clearance and inspections required by customs authorities	1.0	35.0
Export: Clearance and inspections required by agencies other than customs	0.0	0.0
Export: Port or border handling	36.0	310.0
Import: Clearance and inspections required by customs authorities	0.0	0.0
Import: Clearance and inspections required by agencies other than customs	0.0	0.0
Import: Port or border handling	0.0	0.0

Details – Trading across Borders in Germany – Trade Documents

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to enforce a contract through the courts (calendar days)

Time to file and serve the case
Time for trial and to obtain the judgment
Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)

Average attorney fees
Court costs
Enforcement costs

Quality of judicial processes index (0-18)

Court structure and proceedings (-1-5)
Case management (0-6)
Court automation (0-4)
Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.
The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.
The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.
The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.
The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.
The judge decides in favor of the seller; there is no appeal.
The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Enforcing Contracts – Germany

Indicator	Germany	OECD high income	Best Regulatory Performance
Time (days)	499	589.6	120 (Singapore)
Cost (% of claim value)	14.4	21.5	0.1 (Bhutan)
Quality of judicial processes index (0-18)	12.5	11.7	None in 2018/19

Figure – Enforcing Contracts in Germany – Score

Figure – Enforcing Contracts in Germany and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Germany – Time and Cost

Figure – Enforcing Contracts in Germany and comparator economies – Measure of Quality

Details – Enforcing Contracts in Germany

Details – Enforcing Contracts in Germany – Measure of Quality

	Answer	Score
Quality of judicial processes index (0-18)		12.5
Court structure and proceedings (-1-5)		4.5
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	Yes	1.5
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, but manual	0.5
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		1.5
1. Time standards		0.0
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	No
1.c. Are these time standards respected in more than 50% of cases?	Yes
2. Adjournments		0.5
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	Yes
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	Yes
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	No	0.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	No	0.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	No	0.0
Court automation (0-4)		3.5
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	Yes	1.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	Yes	1.0
3. Can court fees be paid electronically within the competent court?	Yes	1.0
4. Publication of judgments		0.5
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	No
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		3.0
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to recover debt (years)

Measured in calendar years
Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)

Measured as percentage of estate value
Court fees
Fees of insolvency administrators
Lawyers’ fees
Assessors’ and auctioneers’ fees

Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.
The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.
The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome

Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors

Measures the cents on the dollar recovered by secured creditors
Outcome for the business (survival or not) determines the maximum value that can be recovered
Official costs of the insolvency proceedings are deducted
Depreciation of furniture is taken into account
Present value of debt recovered

Strength of insolvency framework index (0- 16)

Sum of the scores of four component indices:
Commencement of proceedings index (0-3)
Management of debtor’s assets index (0-6)
Reorganization proceedings index (0-3)
Creditor participation index (0-4)

Resolving Insolvency – Germany

Figure – Resolving Insolvency in Germany – Score

Figure – Resolving Insolvency in Germany and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Germany – Time and Cost

Figure – Resolving Insolvency in Germany and comparator economies – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Germany and comparator economies – Recovery Rate

Details – Resolving Insolvency in Germany

Details – Resolving Insolvency in Germany – Measure of Quality

	Answer	Score
Strength of insolvency framework index (0-16)		15.0
Commencement of proceedings index (0-3)		3.0
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(a) Yes, a creditor may file for both liquidation and reorganization	1.0
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(c) Both (a) and (b) options are available, but only one of them needs to be complied with	1.0
Management of debtor's assets index (0-6)		6.0
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(b) Yes over ordinary unsecured creditors but not over secured creditors	1.0
Reorganization proceedings index (0-3)		3.0
Which creditors vote on the proposed reorganization plan?	(b) Only creditors whose rights are affected by the proposed plan	1.0
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	Yes	1.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	Yes	1.0
Creditor participation index (0-4)		3.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	Yes	1.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	No	0.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (https://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
Is a full-time employee.
Is not a member of the labor union, unless membership is mandatory.

The business:

Is a limited liability company (or the equivalent in the economy).
Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Has 60 employees.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Germany

Details – Employing Workers in Germany

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 1802.3

Maximum length of probationary period (months) 6.0

Ratio of minimum wage to value added per worker 0.3

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 0.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 24.0

Paid annual leave for a worker with 5 years of tenure (working days) 24.0

Paid annual leave for a worker with 10 years of tenure (working days) 24.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 24.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? Yes

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? Yes

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? Yes

Priority rules for redundancies? Yes

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.0

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 17.3

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.2

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 10.0

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 10.8

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 21.7

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 11.6

PEO Germany

Germany, as a Professional Employer Organization (PEO) country, boasts a highly developed and dynamic business environment that attracts both domestic and international companies seeking to expand their operations. With its strategic location at the heart of Europe, Germany offers unparalleled access to the European market, making it an ideal hub for companies looking to establish a strong presence in the region. The country’s stable political landscape, transparent legal system, and robust infrastructure provide a secure foundation for businesses to thrive. Moreover, Germany’s highly skilled and educated workforce, renowned for its technical expertise and innovation, further enhances its appeal as a PEO destination. Whether it’s navigating complex labor laws, managing payroll, or handling human resources functions, PEOs in Germany play a crucial role in facilitating smooth market entry and operation for businesses, offering a competitive edge in the global marketplace.

PEO services in Germany provide a practical and streamlined solution for foreign companies seeking to expand their operations into this economically robust European market. By partnering with a reputable PEO service provider, international businesses can effectively outsource their human resources, payroll, and compliance functions. The PEO acts as the official employer of record, ensuring compliance with the complex German labor laws and regulations. This relieves foreign companies of the burden of establishing a legal entity and managing intricate administrative tasks, allowing them to focus on their core business activities. Moreover, PEO services grant access to a talented local workforce, facilitating cultural integration and market penetration. With the support of PEO services, foreign companies can navigate the intricacies of the German market with confidence, seize growth opportunities, and achieve their business objectives more efficiently.

Business Reforms in Germany

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008.

Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Enforcing Contracts: Germany made enforcing contracts easier by introducing electronic filing of the initial complaint and electronic service of process without the need for paper documents.

DB2016

Starting a Business: Germany made starting a business easier by making the process more efficient and less costly.

Employing Workers: Germany introduced a minimum wage of €8.50 an hour in accordance with the Act on Minimum Wages (Mindestlohngesetz), which took effect on January 1, 2015.

DB2015

Starting a Business: Germany made starting a business more difficult by increasing notary fees.

Registering Property: Germany made it more expensive to register property by increasing the property transfer tax.

DB2013

Paying Taxes: Germany made paying taxes more convenient for companies by canceling ELENA procedures and implementing electronic filing and payment system for most taxes.

Resolving Insolvency: Germany strengthened its insolvency process by adopting a new insolvency law that facilitates in-court restructurings of distressed companies and increases participation by creditors.

DB2011

Starting a Business: Germany eased business start-up by increasing the efficiency of communications between the notary and the commercial registry and eliminating the need to publish an announcement in a newspaper.

DB2010

Starting a Business: Germany made starting a business easier by reducing the minimum capital requirement to a symbolic amount.

Resolving Insolvency: Germany enhanced its insolvency process through the Act on the Implementation of Measures to Stabilize the Financial Market (Finanzmarktstabilisierungsgesetz), which removed the requirement for potentially viable companies to file for immediate insolvency in cases of overindebtedness.

DB2009

Getting Credit: Germany weakened its secured transactions framework by decreasing secured creditors’ rights during reorganization procedures.

Paying Taxes: Germany made paying taxes less costly for companies by reducing the corporate income and trade tax rates and by introducing straight-line depreciation for fixed assets and low-value asset write-offs below a certain threshold.

Resolving Insolvency: Germany amended its insolvency code to allow the court to suspend enforcement actions against assets essential to the continuation of the debtor’s business, making it easier to maintain the business as a going concern.

DB2008

Starting a Business: Germany made starting a business easier by implementing electronic registration and introducing online publication of the incorporation notice.

Registering Property: Germany made transferring property more costly by increasing the transfer tax in Berlin.

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