Berlin is a great second choice. The statistics reveal that the top
spot for U.S. Americans is, in fact, Frankfurt and the surrounding
Rhine main area. Some 20,000 U.S. citizens live and work here and
about 1,000 American companies have an office, a production facility,
or some other corporate real estate space in the region.
One of the main reasons for this is the high passenger and cargo
aircraft traffic to and from the United States. Frankfurt is home to
Germany's largest airport, through which more than 340 aircraft fly to
25 U.S. destinations per week.
For those of you with Asian clients, Düsseldorf should be the first
market you will want to investigate. In Düsseldorf there are more than
700 Asian companies, giving work to well over 40,000 people in the
area, and making it a top spot to do business. This high influx of Asian
capital and workforce dates back to 1955, when Mitsubishi opened its
first subsidiary in Europe.
But as with any international transaction, you must be aware of
the pitfalls and do your due diligence in regard to paperwork. Recent
requirements state that all provisions of the lease have to be included
in one document and that each page has to be signed by a competent
representative from both the tenant and landlord, additionally, in order
to comply with the written form requirements, the time between the
offer and the acceptance must not exceed a certain number of days.
And to make things even more complicated, if anything is agreed verbally, this is seen as an amendment to the written agreement, and it
potentially entitles both parties to terminate the lease contract.
When entering the German real estate market, apart from choosing the right location and making sure you satisfy the written form
requirements, another point needs to be carefully navigated.
Since 2006, all 16 German federal states now determine their
rate of real estate transfer tax independently. Not surprisingly, given
that the choice is theirs, the majority of the federal states have raised
the taxes, particularly Brandenburg, Thüringen, and North Rhine-
Westphalia, which have all increased the tax from 3. 5 percent to 5
percent. The real estate transfer tax is similar to the U.K. stamp duty,
triggered when the ownership is transferred to another person or
legal entity.
