Dear reader, in this publication, we will discuss the key points that need to be considered and paid attention to if you want to buy a business in Austria or Germany, whether it is commercial real estate, a metalworking factory, or a raw materials manufacturing plant. In this article, you will find answers to the questions that many investors and businessmen have before buying commercial real estate or a well-established business in Germany or Austria, such as: a shopping or office center, supermarket, income property, large hotel or small guesthouse, car wash or gas station with a car shop, pizzeria or bakery, laundry or dry cleaner, a single restaurant or a large hotel with two restaurants. We also offer: investment projects and land for development, ready-made construction and security firms, shopping center packages, and investment apartments.
Is the buyer’s cash flow sufficient? This is the first and most important question, as many people have hopes for large loans in the EU countries, but it may not be as straightforward as the buyer might imagine, especially if they have not dealt with purchasing businesses in Germany or Austria before.
– Buy a business with commercial real estate that the bank can use as collateral;
– Have a company (in Austria or Germany) that has been successfully operating for several years with accounts in prestigious banks in those countries;
– Ideally, the company should have a good credit history. However, note that buying an existing company in Germany or Austria with a good history and immediately obtaining a loan may not be feasible, as banks will check the information about the change of ownership. It should be a genuine M&A, not just a change of ownership;
– Have proof of the legal source of the funds you plan to use to purchase, for example, a hotel in Austria or a shopping center in Germany.
If you meet these conditions, you can confidently expect a loan amount of around 60%-75% of the value of the commercial real estate at a good annual interest rate for many years. But if you have issues with these criteria, the loan, if obtained, will be less than 60%, and at best, up to 40%.
Arrange your financial capital. If possible, place it in prestigious EU banks legally. Open a business in Germany or Austria, including registering a company that will conduct real activities and build a good credit history.
Our company can assist with this; for example, we can help build a good credit history in Austria and, at the same time, provide investors with 20%-30% annual returns on their invested capital, specifically in development.
Pay attention to the possibility of auditing the business you are considering purchasing. Can the current owner provide reports for the past years of activity or not?
If you want to buy a rental business in Germany or Austria, be sure to pay attention to and not ignore (as some buyers do) the occupancy factor (if it is a package of apartments or income property) or the presence of major (anchor) tenants in commercial real estate (such as a large supermarket chain with a 30-year lease, as a good example).
Don’t be alarmed if you are offered to buy a shopping center in remote towns in Germany. Typically, the yield percentage there is higher (even though land price growth is slower) compared to, for example, Berlin, where it is 3%-4% if lucky. This is due to the effective functioning of the authority that controls compliance with antimonopoly legislation in the country. For example, if one small town has a gas station, and another one is nearby, it might threaten the profitability of both, so the government will not grant permission for the construction of the second one.
If you want to not only invest in Germany or Austria but also obtain a residence permit (temporary residence) or permanent residence as a priority or additional benefit, do not assume that simply buying residential property, such as an apartment in Germany, will grant you residency. You must either work legally in that country, study, or be an investor or businessman according to the country’s legislation.
Essentially, these are the key points to consider when purchasing a business in Austria or Germany. Everything else is a matter of individual specifics that should be considered on a case-by-case basis.
Now a bit about our company, which may be of interest to our readers and potential clients.
INVESTMAKLER is a brokerage company specializing in investments in commercial and residential real estate, various types of businesses, sales of such businesses, company registration and sales, and opening accounts.
Our main partners have over 20 and more than 30 years of experience in this field.
Our priority countries for business and real estate sales are Austria and Germany.
In other areas, we work in all jurisdictions, with the following being priority: Abu Dhabi | Bahamas | Bahrain | British Virgin Islands | Cayman Islands | China | Curaçao | Cyprus | Dubai | Gibraltar | Guernsey | Hong Kong | Isle of Man | Malta | Mauritius | Portugal | Seychelles | Singapore | South Africa | Switzerland | Turks & Caicos Islands | United Kingdom.
Consultations are available in Russian, German, Ukrainian, and English.