Germany is an attractive market, given its size and the spendings of its consumers and businesses. For many foreign businesses setting up a legal and organisational presence in Germany is no option. Still, the potential of the market is probably too interesting to miss on the German market. in that case, exporting to Germany is the option.
The standard options are applicable in Gemany as well:
- Appointing a distributor and / or wholesaler
- Appointing an agent
- Selling directly through a website
These options are widely used while their implications are different. The likelihood of warranty cases and the need for training, maintenance and repair services is limiting this choice. The choice is also influenced by the complexity to ensure legal regulations. We list the major common regulations applicable for exporting to Germany.
Goods and services might be subject to customs duty and need to be declared, when shipped to Germany from outside the EU. Normally the forwarder handles all custom related issues while the seller has to provide all supporting material.
Exporters from outside the EU normally do not charge VAT when selling to Germany; the buyer has to pay VAT upon entry of the goods into Germany. B2B-Sellers from inside the EU do not need to charge their local VAT, if the buyer has an international VAT number. If not, seller charges its local VAT. B2C-Sellers from inside the EU would normally be required to register in Germany for VAT purposes and charge and collect VAT. Often, some tresholds apply.
Return policies (mainly b2c issue)
When selling to Germany through internet or mail order, sellers must be aware that there is a 2 week return option (right of withdrawal) for the good or services ordered online. This option is on the sole discretion of the buyer. The buyer can send the goods back or step-back from any contract signed. Sellers normally need to cover the cost of the return shipment. This regulation is very important for eCommerce-companies selling to Germany.
Warranty (mainly b2c issue)
Most goods to be sold to consumers need to come with a two year warranty. In 2012 Apple was a prominent case not to offer 2 years warranty but was forced by the EU to do so when selling into the EU. This regulation is also very important for eCommerce-companies selling to Germany.
Repair services & spare Parts (b2c and b2b issue)
There is no explicit regulation on the availability of repair services or spare parts. However, case law based on the principle of “Treu und Glauben” requires sellers to offer spare parts, upgradability and support over the expect life of the product or service sold.
Support services / customer hotline
Of course, a good customer hotline for pre- and after-sales-service is a very good support to service the German market. German b2c-customers expect this to be in German to provide some form of comfort. However, there is no legal requirement to have these support services.
Warehousing in Germany
For a limited number of businesses custom free warehousing in Germany is an option. There are many companies offering these services with the advantages for the seller to defer duty and VAT payments. However, these service providers are normally not equipped to provide service for end-customer business (like fulfillment).
We can help you to fine-tune your strategy to enter the German market in these early stages of market entry. We can select agents, select distributors and help in the set-up of a local service network. In case you need further information or a quote, please contact us.
Your contact: Felix Küsell
T: +49 (0)30 4005 490