Germany has long been a powerhouse of innovation and economic stability in Europe. With its robust infrastructure, highly skilled workforce and supportive business environment, Germany has become an increasingly attractive destination for entrepreneurs looking to establish their ventures or take their first steps in international expansion.
Below, we’ve laid out our picks for the top five cities in Germany to start a business. With picks ranging from the storied capital to Germany’s tech and industrial heartlands, these cities offer the best opportunities for entrepreneurs in a range of sectors and disciplines.
1. Berlin - The Startup Capital
When it comes to entrepreneurship, Berlin stands out as a European pioneer. The city has earned a well-deserved reputation as the startup capital of Germany, thanks in part to its reputation as an exciting place to live and work. Its vibrant, creative atmosphere, coupled with affordable living costs for a European capital, has attracted a vast community of entrepreneurs, investors, and tech enthusiasts.
The city is home to numerous co-working spaces, business accelerators, and startup incubators that provide invaluable financial support, guidance and networking opportunities for startups. Additionally, Berlin's diverse population and quality universities ensure a broad talent pool, making it an ideal place to tap into skilled professionals from across the country and the continent. For more information, see our article: A simple guide to starting a business in Berlin.
2. Munich - The Economic Powerhouse
As the third-largest city in Germany, Munich boasts a robust economy, and a strong foundation of innovation. Often seen as a culturally distinct region within Germany - similar to Cornwall in the UK, or the Basque country in Spain - the Bavarian capital houses several renowned research institutions, including the Technical University of Munich and the Ludwig Maximilian University, which contribute to the city's cutting-edge technology landscape.
Munich's well-established industrial sectors, such as the automotive industry (BMW, MAN), aerospace industry (Airbus, MBDA), and electronics industry (Panasonic, Siemens, Texas Instruments), offer excellent opportunities for businesses looking to collaborate or supply to large companies as part of Germany’s ‘Mittelstand’. The city's high standard of living and affluent population also create a prosperous market for local products and services.
3. Hamburg - The Gateway to International Trade
Strategically located near the mouth of the river Elbe, Hamburg has long been a key hub for international trade and transport. Its seaport is the third largest in Europe in terms of traffic, making it an ideal location for businesses involved in import and export activities, either to the rest of Europe or further afield.
Hamburg's well-developed logistics infrastructure (including a major commercial airport) and proximity to a multitude of European markets provide a competitive advantage to companies seeking to expand their reach. The city's thriving cultural scene and emphasis on sustainability make it equally attractive to businesses in the creative and eco-friendly industries, and are a strong selling point for recruiting talented employees.
4. Frankfurt - The Financial Centre of Germany
Frankfurt has become synonymous with finance, to an even greater extent since the exodus of talent from London after Brexit. As well as being home to the European Central Bank, Frankfurt also boasts numerous other financial institutions, including Deutsche Bank, BNP Paribas and ING. This financial hub provides an excellent environment for businesses seeking access to capital and financial services, while also benefiting from the freedoms of the EU’s Internal Market.
Related article: Why opening a company in Germany is a smart idea during tough times
The city's central location within Germany also makes it a convenient base for businesses with a nationwide or international focus, with the ability to trade more easily across a range of timezones, and strong transport links to facilitate meetings. Frankfurt's diverse economy, including the technology, consulting, and healthcare sectors, offers ample opportunities for entrepreneurs with innovative ideas in fintech and beyond.
5. Stuttgart - The Home of Innovation and Engineering
Often referred to as the cradle of the automotive industry, Stuttgart has evolved from a centre of culture and agriculture into a nexus of engineering excellence. The city's strong focus on research and development, especially in the automotive and mechanical engineering sectors, attracts entrepreneurs and businesses with a technical background, covering many of the sectors specialised in by other cities.
To this end, Stuttgart is Germany's second city for both the finance and automotive industries, hosting a major stock exchange and businesses including Mercedes-Benz, Porsche, Lenovo and McKessen. Stuttgart's well-established network of industrial clusters and the presence of global players create a fertile ground for collaboration and innovation, and its highly diverse population - around 40% immigrants - is a hotbed of creative and technical talent.
Germany offers a diverse range of cities, each with its unique strengths and advantages for entrepreneurs. From the creative, bustling startup ecosystem in Berlin to the financial prowess of Frankfurt and the engineering excellence of Stuttgart, Germany's cities have much to offer to aspiring business owners. The country's stability, strong commitment to innovation, skilled workforce, and supportive business environment make it a top choice for entrepreneurs looking to set up and grow their new ventures.
Before starting a business, it's essential to conduct thorough research, understand the local regulations, and assess the market potential in each city. With the right vision, determination, and support, Germany can be a springboard to success for any aspiring entrepreneur. To learn more about starting a business in Germany, visit our German company formation page. Alternatively, download our guide to starting a business in Europe, or contact us today to discuss your startup venture.
