The Ultimate Guide to Investing in Germany in 2026 and beyond

Before you choose an investment, it helps to know the economic situation. Germany had two years of recession: the economy shrank by 0.9% in 2023 and by 0.5% in 2024. In 2025 it grew again, but only by 0.2%. [1] In the first two quarters of 2026 the economy grew by 0.3% each quarter. In the second quarter it was 1.0% larger than a year earlier. [2]

Why growth is slow. The government lowered its forecast in April 2026. It named a conflict in the Middle East, higher energy prices and trade tariffs as the main reasons. [3] The Bundesbank says an energy price shock is slowing the recovery, and that government spending is now the main support for growth. [28]

Why this matters for investors. Three points follow from the data:

• Borrowing is more expensive. The average interest rate on new bank loans to companies was 3.78% in July 2026, up from 3.36% a year earlier. [19] This affects anyone who wants to finance a restaurant or a building with a loan.
• Cash earns interest again. Some brokers now pay 2.5% or more on cash. [32][7] With inflation at 2.9%, however, money in an account still loses a little value in real terms.
• The state is spending a lot. Germany changed its constitution in 2025. It created a special fund of up to €500 billion for infrastructure and climate protection, and it allowed higher defence spending outside the debt brake. [33][34] This money creates demand for construction, rail, digital networks and defence (see Part 7).

You can buy shares or ETFs as a private person through a securities account. More and more people do it: 14.1 million people in Germany owned shares, equity funds or ETFs in 2025. That is 2 million more than in 2024 (industry survey). [35] The DAX, Germany’s main share index, rose 23% in 2025 and ended the year at 24,490 points. [36] Remember that one good year says nothing about the next one.

How it works

1. Open a securities account (Depot) with a bank or an online broker.
2. Choose what to buy. Many beginners use a savings plan (Sparplan): a fixed amount goes into an ETF every month.
3. Give your broker an exemption order (Freistellungsauftrag). Then no tax is taken from the first €1,000 of investment income per year (€2,000 for married couples). [37][38]

The big change in 2026: no more “payment for order flow”

Many German online brokers (“neobrokers”) offered very cheap trades because trading venues paid them for sending customer orders. This is called payment for order flow (PFOF). An EU law bans it. Germany was the only EU country that used a temporary exception, which ended on 30 June 2026. [39][40][41] BaFin, the German financial supervisor, confirms that the ban has applied since 1 July 2026. It warns that brokers may raise order fees, introduce monthly fees, or stop offering free savings plans. Fee increases only take effect if you agree to them. [6][42]

Brokers reacted in different ways. Since 2 July 2026, Trade Republic executes standard orders against itself for a €1 fee. If you want to choose the exchange yourself, the new “Direct Price” order costs €2. [8] Its customer agreement allows it to act as the seller or buyer itself. [43] Scalable Capital now charges €1.99 for trades on Xetra and gettex in both of its plans. [7]

Broker comparison (prices on 24 September 2026)

Custody and cash. Scalable, Smartbroker+, justTRADE, flatex, ING, Consorsbank and DKB charge no custody fee; comdirect charges none for accounts opened from 15 July 2026. [7][44][45][46][47][49][50][48] On cash, Trade Republic pays 2.5% with no limit, Scalable 2.60% on its daily-money account, Smartbroker+ the ECB rate minus 0.25% (now 2.25%), and justTRADE 0%. [32][7][44][45] All brokers in the table are German banks, German branches of EU banks, or use a German custodian bank. [43][7][45]

Taxes on investment income

Germany taxes investment income at a flat rate of 25% (Abgeltungsteuer). A solidarity surcharge of 5.5% is added to the tax, which makes 26.375% in total. Church members pay church tax on top. [38][51] Important rules:

• Tax-free allowance: €1,000 per person and year, or €2,000 for married couples who file together (Sparer-Pauschbetrag). [37]
• Equity ETFs and funds: 30% of the income is tax-free (Teilfreistellung). [52]
• Advance lump-sum tax on funds (Vorabpauschale): accumulating funds are taxed a little each year, even if you do not sell. The base rate for 2026 is 3.20%. [53]
• Losses: losses from selling shares can only be set off against gains from selling shares. The old €20,000 limits for losses from derivatives and bad debts no longer apply. [37][54]
• Foreign brokers: if no German tax is withheld, you must declare the income in your tax return yourself. [38]

How safe is your money?

• Cash in a German bank is protected up to €100,000 per person and bank by law. [55]
• Shares and ETFs in your account stay your property. If the bank fails, they are not part of its insolvency estate. [46][50]
• Claims from securities business (for example, if securities cannot be returned) are covered at 90%, up to €20,000. [56]
• None of this protects you against falling prices. That is the main risk of the stock market.

New state programmes

• Altersvorsorgedepot (pension investment account): this reform of private pensions is now law. The Bundestag passed it on 27 March 2026 and the Bundesrat approved it on 8 May 2026. New products start on 1 January 2027. [57][58]
• Frühstart-Rente (early-start pension): the state plans to pay €10 a month into an investment account for each child aged 6 to 18. The cabinet approved the bill on 12 August 2026, and the planned start is 1 January 2027. Parliament has not passed it yet. [59]

An online shop, a digital product or a service sold on the internet can start small. Official data supports the trend: in 2025, online and mail-order retail sales grew 10.1% after inflation, compared with 2.7% for all retail. Destatis notes that part of this growth comes from a reporting change at a large online retailer. [60] In the KfW founder survey, a record 44% of new founders in 2025 offered something digital. [61]

Step 1: choose a legal form

You can found a UG or GmbH fully online by video call with a notary. You need a German ID card, an EU eID, or an electronic residence permit with the online function switched on. [71]

Step 2: understand the taxes

• Small business rule (Kleinunternehmerregelung): since 2025, you charge no VAT if your turnover was at most €25,000 last year and stays at or below €100,000 this year. In your first year, the limit is €25,000. The sale that takes you over €100,000 is already taxable. [72][73]
• VAT: the standard rate is 19%, and the reduced rate is 7%. [74] If you sell to consumers in other EU countries for more than €10,000 a year in total, you charge their country’s VAT. The EU One-Stop-Shop lets you file this in one return. [75]
• Trade tax (Gewerbesteuer): sole traders and partnerships get a tax-free amount of €24,500 profit. Companies (UG, GmbH) do not. [76]
• Corporate tax: 15% until 2027. It then falls by one point per year to 10% from 2032. Equipment bought between July 2025 and the end of 2027 can be depreciated faster, at up to 30% per year. [77]
• E-invoices: every business must be able to receive electronic invoices since 2025. Sending them to other businesses becomes compulsory in 2027, or in 2028 for firms with turnover up to €800,000. [78]

Step 3: follow the online rules

• Imprint (Impressum): your website must show your name, address, email and register details (§ 5 DDG). [10]
• Right of withdrawal: consumers can cancel most online purchases within 14 days. New since 19 June 2026: online shops must offer an electronic withdrawal button labelled “Vertrag widerrufen” or similar. [13]
• Packaging: if you ship goods, you must register for free in the LUCID register and pay a packaging system for your shipping boxes. New EU packaging rules replaced the German packaging law on 12 August 2026, but these duties stay. [11]
• Electronics: sellers of electrical devices must register with stiftung ear. An example for a small seller costs €197.70 a year in fees. [79]
• Product safety: product pages must show the manufacturer’s name, postal and electronic address, and safety warnings. [80]
• Accessibility: since 28 June 2025, online shops for consumers must be accessible. Very small firms (fewer than 10 staff and up to €2 million turnover) are exempt for services, but the products they sell must still comply. [12]
• Chamber of commerce (IHK): membership is compulsory for trades. Many new founders with small profits pay no fee for the first years. [81]

Step 4: compare sales platforms

A restaurant needs more permits than the other options in this guide (see the checklist below). The government cut VAT on restaurant food from 19% to 7% for good from 1 January 2026. Drinks stay at 19%. [14][74]

The market: prices up, real sales down

Restaurants earn more euros than before, but they sell less. Nominal sales (in euros) rose, while real sales (after removing price increases) kept falling. [89][90][15]

The hospitality sector (restaurants, bars, hotels) also had the second-highest insolvency rate of all sectors in 2025: 108 insolvencies per 10,000 businesses, compared with 69 across all sectors. The pattern continued in the first half of 2026. [16][30] The sector is large: in 2024 it had about 245,600 businesses and 1.1 million employees paying social insurance. [91]

Costs that changed

• Minimum wage: €13.90 per hour since 1 January 2026, and €14.60 from 1 January 2027. [92]
• Mini-jobs: the earnings limit is €603 per month in 2026. [93]
• Cash registers: electronic tills need a certified security device, and since 2025 every till must be reported to the tax office. [94] A draft law would make an electronic till compulsory above €100,000 turnover from 2028. [95]

Permits and fees: a checklist

Rent and funding

Official statistics do not publish restaurant rents. Industry data shows that the best shop locations are very expensive. In mid-2025, prime rents for the top shopping streets were €340 per m² per month in Munich and €290 in Berlin. These are peak values for the best units, not typical restaurant rents. In the first half of 2025, restaurants and food businesses took 38% of the space let in small units under 250 m². [108] Ask local agents and the local IHK for realistic rents in your area.

For funding, the state bank KfW offers the ERP-Gründerkredit – StartGeld: loans of up to €200,000 (raised from €125,000 in December 2025), of which up to €80,000 can be used for running costs. [109] People who receive unemployment benefit can apply for a start-up grant (Gründungszuschuss), but there is no legal right to it. [110]

Commercial property means offices, shops, warehouses and similar buildings. Prices for offices and shops are about 13–15% below the first quarter of 2022. In the second quarter of 2026, office prices fell 1.2% and retail prices 0.2% year on year. This was the first annual fall after five quarters of growth (industry data by the Association of German Pfandbrief Banks, vdp). [111][17]

Price development

Lower prices can look like an opportunity. But the official risk reports are careful. The Bundesbank says commercial property prices have stabilised, but the situation is “fragile” and the recent price rise was based on few sales. In a negative scenario, prices could fall about 9% within a year. [20] BaFin reports that commercial property loans make up about 9% of German banks’ total assets, and that 6.4% of these loans at large banks were non-performing in late 2025. [112] Building new offices is also getting more expensive: construction prices for new office buildings rose 5.2% in the year to May 2026. [113]

Purchase costs

When you buy property, you pay several costs on top of the price:

• Real-estate transfer tax (Grunderwerbsteuer): 3.5% to 6.5%, depending on the federal state (table below).
• Notary and land registry: these fees are fixed by law and rose on 1 June 2025. From the official fee table, we calculate about 0.95% of the price for a €500,000 purchase and 0.85% for €2 million, without a loan. A loan secured on the building costs extra. [114]
• Broker fee: for commercial property there is no legal rule on who pays or how much. The fee is freely negotiated. [115]
• VAT: the sale of a building is usually free of VAT. A business seller can choose to charge VAT when selling to another business, and then the buyer pays it to the tax office. [116]
• Share deals: buying a company that owns the property also triggers transfer tax if 90% or more of the shares change owner within 10 years. [117]

Rents and yields (industry data)

Official statistics do not publish commercial rents, so the figures below come from property consultancies. They mostly describe the best buildings in the best locations (“prime”). Average rents are much lower: in Hamburg, the average office rent is €22.18 per m², about half of the prime rent. [119]

• Warehouses: prime rents in the first half of 2026 were €11.00 per m² in Munich, €10.50 in Berlin and €8.50 in Hamburg and Frankfurt. Demand rose 16%. [121]
• Prime yields (Q2 2026): offices in top cities 4.49%, high-street shops 3.85%, logistics 4.60%, shopping centres 6.00%. [122] A yield of 4.5% means a buyer pays about 22 times the yearly rent (our calculation: 1 ÷ 0.045).
• Market activity: investors bought commercial property worth €25.1 billion in 2025 and €12.3 billion in the first half of 2026 (+8%). [123][122]

Financing and tax

Loans are more expensive than a year ago. In July 2026, German banks charged 3.78% on average for new loans to companies. Loans up to €1 million with a rate fixed for more than 5 years cost 4.14%. [19] Compare these loan rates with the prime yields above. For tax purposes, business buildings that are not used for housing can be depreciated at 3% per year. [124] Since 2025, the new property tax (Grundsteuer) applies, and each town sets its own rate. [125]

If you have skills that companies need (management, IT, finance, engineering, marketing), consulting can be started with very little money. Your main investment is your time and knowledge. The market is large: Eurostat counts about 89,500 management consultancy firms in Germany with €55.1 billion in turnover in 2024. [126] The consulting association BDU reports 0.5% growth for 2025 and expects 4.5% for 2026, with consulting on artificial intelligence growing fastest (+18.8% in 2025, industry data). [127] But freelancers also report a harder market: the average hourly rate in one large platform survey fell for the first time, to €103. [128] The number of self-employed people in Germany has been falling since 2012, to 3.7 million in 2025. [129]

Freelancer or trade?

This is the first question for every consultant. Some professions count as “free professions” (Freiberufler). The law names, for example, consulting business economists (beratende Volks- und Betriebswirte) and engineers. [130]

Social insurance costs in 2026

As a self-employed person you pay your own health and long-term care insurance. This is often the biggest fixed cost in the first years.

The biggest risk: “false self-employment”

If work that is agreed as self-employment is in fact employment, this is called false self-employment (Scheinselbstständigkeit). Deutsche Rentenversicherung decides this by looking at all the circumstances of the case. You or your client can ask Deutsche Rentenversicherung for a status check (Statusfeststellungsverfahren). It is free, takes about three months on average, and can be done before the work starts. [24][135]

Even as a real self-employed person, you must pay into the state pension if you have no employees and work long-term mainly for one client. [136] In 2026 the standard contribution is €735.63 a month, and new founders can apply for an exemption for up to three years. [134][137] A bigger change is coming: in June 2026 the government’s pension commission recommended that all people who become self-employed after a future cut-off date must join the state pension. The coalition plans to pass the law by the end of 2026. It is not law yet. [138][139]

Legal form and VAT

A UG or GmbH limits liability (see the table in Part 3). The partnership for free professions (PartG mbB) can limit liability for professional mistakes only in professions where a law requires professional liability insurance. [140] If you advise businesses in other EU countries, you usually do not charge German VAT; your client pays VAT in their own country (reverse charge). [141] The small-business VAT limits of €25,000 and €100,000 also apply to consultants. [72]

The picture is clear: services linked to technology, health and public investment are growing; traditional industry and some consumer sectors are under pressure.

This trend continued in 2026. In the second quarter, information and communication grew 3.9% and public services, education and health 2.1% year on year. Manufacturing grew 1.1%, its first increase since early 2023. [2]

Long-term demand drivers

• Public investment: the special fund of up to €500 billion runs for 12 years. In 2027 it plans €17.7 billion for transport, €9.0 billion for digitalisation (including microelectronics) and €3.5 billion for hospitals (draft plan). [33][152]
• An ageing population: the number of people aged 67 and over will grow to 20.5–21.3 million by 2038. By 2035, one in four people will be 67 or older. [153]
• A shortage of skilled workers: the Federal Employment Agency lists 157 shortage occupations, including care, medicine, construction trades, drivers, cooks and childcare. Software development is no longer on the list. [143]

Some questions to ask yourself. How much money can you afford to lose? Do you need the money back soon? Do you want a second income, or a full-time job? Do you have the right skills and the time? A licensed adviser can help you answer these questions for your own situation.

• Students (§ 16b AufenthG): the student permit allows employment of up to 140 full days per year. Self-employment is not included, so students need separate permission from the foreigners’ office (Ausländerbehörde) before they start a business. [154]
• Self-employment permit (§ 21 AufenthG): you need an economic interest or regional need, a positive effect on the economy, and secure financing. The permit lasts up to three years. Applicants over 45 must show adequate pension provision. [155]
• Freelancers (§ 21 (5) AufenthG): people in free professions, such as many consultants, can get a permit through an easier route without the “economic interest” test. [155]
• Other permits: if you hold a different permit (for example, for work), you may be self-employed only if the foreigners’ office allows it. [155]