Download Stability, size and success make Germany a prime market

52
53
In association with:
INTERNATIONAL TRADE
Case study: Increased control room demand
means great business for Lancashire firm
T
he global video surveillance market is expected to grow by 10
per cent in 2015 – and one Burnley-based business is keeping a
close eye on any new opportunities.
eyevis UK is the UK arm of German company eyevis GmbH, a world
leader in the manufacture of cutting-edge video display solutions.
It’s simply too big and too close to ignore, though you’ll need patience to push the doors open in Germany. But as pointed
out by Steve Murphy of eyevis, it can be worth it.
Formed in 2007 by managing director Steve Murphy, eyevis UK has
installed systems in a wide range of industries, including London
Underground.
It leads the way in supplying state-of-the-art video wall solutions
Steve Murphy
to modern CCTV control rooms for local authorities, banks, road
traffic monitoring, emergency services, blue chip retailers, security services, prisons and
other government buildings.
The firm also helped to keep visitors and competitors safe at last year’s Commonwealth
Games, installing a £1m video wall system in the Games’ CCTV control centre.
Steve said: “When I started the business, the idea was to bring eyevis products into the UK as
their exclusive partner and distributor, and that’s what we’ve done.
“We supply turnkey video wall technology into control rooms, and 99 per cent of the
time that is through UK-wide and global system integration partners such as Saville AV
and Siemens. I deliberately set the business up that way and eyevis GmbH have since used
that model with other companies.”
“What I didn’t want was someone else dictating how I run the business – that was important to
me having been involved in this industry for most of my career. It all works extremely well. We
are working with eyevis GmbH on a daily basis, whether it’s placing orders or liaising on new
technology, and they are incredibly efficient but also very personable.”
EXPERT VIEW: Be patient and persistent
Stability, size and success
make Germany a prime market
G
ermany and Britain share many of the
same values and principles on global
trade, EU policy and budget restraint which
strengthens their alliance within the EU,
writes Rosie Arnold. With a GDP of more than
$3.6bn, Germany is the largest economy in
Europe and 4th largest globally.
Despite some blips, Germany’s economy
looks as strong as ever. UKTI predict a 2 per
cent growth in the German economy over the
next two years.
“Given these figures, it is unsurprising that
UK exports to Germany have increased by 21
per cent since 2009 to reach £43bn, making
Germany the UK’s largest trading partner in
Europe,” says Margaret Bourke, international
trade advisor for UKTI North West.
“These exports range from the wellknown trade in automotive and aerospace
components to mineral fuel, mechanical
appliances, vehicle and electrical equipment.
“With a population of over 81 million
Germany has a strong consumer market
which, paired with its short distance from
the UK and wide use of English for business,
makes it an ideal business destination.
“The British ability to integrate itself within
Germany’s growing economy has been enabled
by the European Union,” says Margaret.
She adds: “The single market means free
movement of goods and services which
makes it easier for companies to export
to Germany with reduced paperwork
and bureaucracy, meaning any goods
manufactured in the UK are exempt from
import duties.”
However, if Britain chose to separate itself
from the European Union, trade between
Germany and the UK would be compromised
which is why “Angela Merkel is going out
on a limb to try to keep Britain in the EU”
according to Holger Schmieding from the
Berenburg bank.
Margaret says: “Germans like the up-front
way we do business and love our creative
and original products in areas such as design,
film and music. But even in manufacturing
and engineering, an area where the Germans
excel, there are still opportunities for the
right UK companies with the right products.
“Make sure you understand how the German
customer benefits by using your product
because some German companies have a
‘buy local’ attitude so British companies must
offer something unique,” advises Margaret to
anyone think of trading with Germany.
“Fundamentally, as an economic leader and
central importer and exporter across Europe,
Germany is truly a good market and worth
investigating.”
Population:......................... 82,652,256
Currency:......................................... Euro
GDP:....................................... $3,634.8bn
GDP per capita:...................... $38,291
As the largest economy in Europe, Germany’s consistently strong economic performance
offers long-term growth potential for UK businesses. If your product or service is successful in
the UK, there’s a good chance you’ll be successful in Germany.
However, the German market is fiercely competitive, which means UK companies need to
excerise patience and persistence to succeed.
Petra Owen, associate partner at Hansa Partner, a firm of tax advisors, lawyers and auditors
based in Hamburg, and a member of BKR International, said: “With its stable political and
legal environment and its robust and competitive economy, Germany has become more and
more attractive to foreign investors.
“The German economy is in a fairly good state, with relatively high employment levels and
growing consumer confidence. Although export conditions proved more difficult due to
geopolitical tensions and growth weakness in the Eurozone, tax revenues were at a high in
2014. The performance of the German economy throughout 2015 is also expected to have
an impact on the European economy as a whole. My advice to any UK business looking to set
up in Germany is do some thorough market research in advance, as there can be substantial
regional differences regarding infrastructure, demand and supplier structures.”
Expert advice:
Tax Matters
By Helen Cowley,
senior tax manager, Cassons
If you are thinking about setting up
German operations, one of the key
requirements will be staff and whether
you choose to hire local people or
second existing UK personnel, it’s your
responsibility as the employer to get the
tax treatment right.
Income tax is split between tax on
business profits and pay-as-you-earn tax
for employees, known as Lohnsteuer.
If you transfer existing UK staff to
Germany, there’s a chance they could
be considered both German and UK
resident for tax purposes, particularly in
the first year.
Fortunately, the German/UK double
tax treaty prevents a double charge by
determining which country has taxing
rights.
Broadly speaking, an employee will
pay income tax in the country in which
their duties are carried out. Lohnsteuer
will need to be deducted from the
employee’s monthly gross pay together
with social security contributions.
Depending on the length of the
contract, under a ‘reciprocal
agreement’, it may be possible for UK
nationals to continue paying national
insurance contributions instead of
German social security contributions,
but Lohnsteuer will still be payable.
Often, internationally mobile employees
will enter into ‘tax equalisation
agreements’ with their employers to
ensure they are in the same net pay
position regardless of where they
are sent to work. This process can be
complex but with the right help and
advice it is possible for the correct
amount of tax to be withheld in the right
country whilst deducting a hypothetical
UK tax from the employee’s salary.