Foreign Investments in Hessen Remain on the Rise – 163 Permanent Establishments

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Hessen registered a new record-high number of permanent establishments set up by foreign companies in 2016. “A total of 163 international companies set up permanent establishments or expanded their existing investments in Hessen in the past year – more than in any other year before,” announced Hessen’s Minister of Economic Affairs Tarek Al-Wazir in Wiesbaden. The figures were compiled by the state of Hessen’s own economic development agency Hessen Trade & Invest GmbH (HTAI) in cooperation with regional and local economic development agencies. “Hessen broke its previous record set in 2015 of 156 permanent establishments. This is a testament to the appeal of Hessen as a business location.”

Atop the list of investors for the first time is China with 44 new permanent establishments, pushing back the former leader USA (34) to second place, followed by the UK (20), Japan (7), and India (7). Other significant countries of origin whose companies invested in Hessen in 2016 included France, South Korea, and Switzerland (6 each). The information and communication technologies, services, and financial sectors were the industries most strongly represented by the foreign companies setting up operations in Hessen in the past year. One third of the permanent establishments function as a distribution, marketing, or sales office. The other two thirds involve production and factory expansions, research and development investments, administrative offices, and various services.

HTAI has been working closely with the regional economic development agencies from FrankfurtRhineMain, central Hessen, and northern Hessen. HTAI’s CEO Dr. Rainer Waldschmidt cited as a prime example the arrival of the Chinese plastics processing company KINGFA SCI. & TECH. (Europe) GmbH in Wiesbaden, which is attributable to the cooperation that took place between HTAI and Germany Trade & Invest, FrankfurtRheinMain GmbH International Marketing of the Region (FRM GmbH), and the industrial park operator Infraserv. “The excellent infrastructure, central location within both Germany and Europe, and vibrant cosmopolitan atmosphere all constitute key arguments in favor of setting up operations in the economic center of Hessen.”

A selection of additional permanent establishment projects carried out in 2016:

- Velodyne LiDAR, a leading manufacturer of laser systems and sensors based in the USA, established its first ever German branch in Rüsselsheim.

- The global South Korean corporation LG Electronics relocated its European headquarters from London to Frankfurt, which it merged with its German headquarters to date in the Düsseldorf region.

- The French data center operator OVH purchased a building in the central Hessian city of Limburg with plans to open a data center there in the spring. “OVH won’t have any problems connecting its new data center in central Hessen to the fiber optic cable network,” assured Jens Ihle, CEO of Regionalmanagement Mittelhessen GmbH, which played a key role in OVH’s decision in favor of Hessen.

- The Confederation of Indian Industry (CII), India’s largest industrial association, opened its German office in Frankfurt. Hessen’s Minister of Economic Affairs Al-Wazir laid the groundwork for CII’s arrival in Hessen during a visit to India in 2015.

Al-Wazir expects to see a continuation of this positive trend in the next few years. “The announcement of the United Kingdom’s departure from the EU has encouraged us to appeal to overseas companies with European headquarters in the UK to relocate these headquarters to Hessen.” The state of Hessen has been working closely with the FrankfurtRhineMain region with this objective in mind. “Shared events, road shows, delegations, and trade fair booths are planned with the aim of jointly promoting the image of FrankfurtRhineMain and Hessen to international companies as the ideal business location within the EU,” explained FRM’s CEO Eric Menges.