As part of its diversification strategy, the Federal Government of Germany has improved the conditions of investment guarantees for 34 countries, which are the diversification targets. The new conditions have been enforced by end of October 2024 with the publication by PwC Investment Guarantees. The incentives and target countries are to be reviewed after 5 years, which will be in October 2028.
This strategy aims to support German enterprises even more effectively in opening up new markets. The incentives are categorized according to the respective OECD country risk classification. The updated conditions are as follows:
- Waiving of the application fee. Otherwise, the application fee will be 0.05% for investments of EUR 5 million or more
- Reduced deductible for companies of 2.5% instead of 5%, in case of damage
- Reduced annual guarantee premium by 0.45% (previously 0.5%) and by 10% for countries in OECD country risk classification 1-5. Due to legal requirements, this criterion does not apply to some countries on the list, such as Benin, Togo or Ethiopia, because of the increased risk of default.
This diversification strategy applies to the following countries:
- Africa: Algeria, Egypt, Ethiopia, Benin, Ivory Coast, Ghana, Kenya, Morocco, Rwanda, Senegal, Togo, South Africa, Tunisia
- Europe: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia, Turkey
- Caucasus/Central Asia: Georgia, Kazakhstan, Uzbekistan
- South/Southeast Asia: India, Indonesia, Malaysia, Philippines, Thailand, Vietnam
- South America: Argentina, Brazil, Chile, Colombia, Peru
The benefits apply to a geographically balanced number of investment destinations that offer good conditions for German companies, but have so far been less in the focus of the economy and play a subordinate role in the portfolio of investment guarantees. Against this background, countries were selected that stood out as partners for German foreign trade, as transformation partners, as foreign policy partners in a rules-based global order or as emerging economic partners, taking into account economic and foreign policy criteria.
