Are German companies leaving the country?

2026-07-09 08:40:00, Kosova & Bota CNA

The trend of German companies moving abroad is weakening. Industry continues to invest abroad due to high costs. But how many companies are really leaving?

German companies are still moving some of their operations abroad, regardless of the size of the company. According to media reports, the specialist garden equipment manufacturer Gardena from Ulm is planning to cut 250 jobs in Germany and move some of its business to the Czech Republic. This represents a ten percent reduction in the number of employees in the country.

Large global companies, such as BASF, are also continuing to invest abroad. The Welt daily reported on February 11, 2026 that the company intends to move some of its service sector jobs to India. This is putting pressure on its headquarters in Berlin, where a large number of job cuts are planned.

There were also more dramatic assessments.

A year ago, the situation was described much more dramatically. "The industrial crisis in Germany is unfolding in full force," wrote the online magazine Financmarktwelt in November 2025. The author referred to data from the Federal Statistical Office, which analyzed trends from 2018 to 2023. More recent data have not yet been published.

According to the analysis, between 2021 and 2023, around 1,300 German companies with more than 50 employees moved certain business functions abroad. This accounted for 2.2 percent of all companies of this size headquartered in Germany in 2023.

Around 50,800 jobs were lost in the country as a result of these relocations. Financmarktvelt estimated at the time: "It can be assumed that in 2024, and especially in 2025, these trends will intensify further due to high energy prices, increased bureaucracy and rising labor costs."

Just six months later, the Reconstruction Credit Institute noticed another trend. In a press release on June 2, the institution's research department stated that "many mid-sized companies are withdrawing from overseas operations."

While in 2022, around 880,000 of the approximately 3.8 million medium-sized enterprises operated abroad, a year later this number had fallen to around 763,000. The share of medium-sized enterprises operating abroad fell from around 23 to 20 percent.

"The conditions for foreign trade have deteriorated significantly," says Dirk Schumacher, chief economist at the Reconstruction Credit Institute. He cites geopolitical tensions in Ukraine and the Middle East, increased export competition from China in key industrial sectors, and protectionist trade policy in the United States as the main reasons.

A mixed picture

The German Chamber of Industry and Commerce presents a different picture. When asked by Deutsche Welle, spokesman Sven Elling referred to a business survey conducted by the Chamber of Industry and Commerce at the beginning of 2026. It shows that cost pressures on German industry have reached record levels and that for this reason more and more companies are planning investments abroad.

According to the Chamber, 43 percent of industrial companies plan to invest abroad this year, which is three percentage points more than a year ago.

"The reasons are clear - rising costs, structural problems and weak economic activity in Germany," said Volker Treier, director of the Chamber's international business sector.

What do investments abroad bring?

Investments abroad have so far generally strengthened domestic production capacities and contributed to higher employment in the country. In particular, investments aimed at conquering new markets or developing sales and service networks have had favorable effects on parent companies. However, according to data from the German Chamber of Industry, the share of companies investing abroad primarily to conquer new markets has fallen from 30 to 28 percent.

"It is particularly worrying that the previous positive effects that investments abroad had on domestic business no longer exist, because companies now invest mainly to reduce costs. This often leads to serious cuts in business at home," says Volker Treier. Investments abroad today are mainly aimed at reducing costs, not expanding business.

The general trends in the field of foreign investment do not show a clear direction. One can speak of stagnation rather than growth. Professor Stefan Müller from the Leibniz Institute for Economic Research in Halle believes that Germany, when it comes to direct investment by domestic companies abroad, is "well below the record values ????previously achieved."

As he told Deutsche Welles, statistics from the German Federal Bank show that direct investments between 2017 and 2022 amounted to about 120 billion euros per year. In 2024, they amounted to about 80 billion euros, while in 2025, less than 100 billion. These data, in his opinion, "do not provide grounds for the conclusion that significantly more capital is leaving the country than in previous years."

America loses, Asia wins, Europe remains the leader

The research shows significant changes in the choice of destinations for German investments abroad. The attractiveness of North America is particularly declining. The share of companies planning to invest in that region has fallen from 48 to 44 percent.

At the same time, interest in Asia is growing. According to the Chamber, the share of industrial companies investing in China has increased from 31 to 34 percent. The Asia-Pacific region is also gaining importance, with this share increasing from 21 to 26 percent.

"The tariff dispute with the United States is increasing uncertainty and causing companies to postpone investment decisions," said Volker Treier.

With a share of 64 percent, the eurozone remains the most important destination for German investments abroad. Its stability, single internal market and common currency offer reliable business conditions, which are one of the main factors in making investment decisions in times of increased geopolitical uncertainty./ DW