Hannover is one of the ten urban districts in the Lower Saxony state, an area located in north-western Germany. Hannover’s territory covers 204.01 km2 (78.77 sq mi), with a population of 534,049 (est. 2020) in the central area, and 1,119,032 people in the metropolitan region, making it one of Germany’s ten largest cities. It is divided into 13 boroughs and five quarters, each with separate councils for administrative purposes. Hannover is twinned with Bristol in the United Kingdom and Hiroshima in Japan.
Germany is a member of the European Union (EU) along with the World Trade Organization (WTO) and the North Atlantic Treaty Organization (NATO). It uses the euro (EUR) for its currency system, which replaced the Deutsche Mark (DEM) in 2002.
Hannover has a primarily industrial and service sector. The automobile industry plays an essential part in the economy; Volkswagen Commercial Vehicles Transporter (VWN) has five assembly plants in the Lower Saxony region and one central plant in the Hannover district. The factory is shared with Continental AG, an automobile parts manufacturer and the fourth largest tire manufacturer globally. Hannover RE is another large company with headquarters in the city. It deals with health reinsurance and has over assets worth $38 billion.
While it may not be as popular as Berlin or Munich, tourism is also central to the economy, with visitors flocking to the city to view the historical architecture and experience traditional German culture. One of the most prominent tourist companies globally – TUI AG – is headquartered in Hannover and owns many airlines, hotels, cruise ships, and travel agencies. Furthermore, it employs over 50.584 people worldwide (est. 2021). Hannover is also one of the most important locations in Germany for trade fairs and conventions, with Hannover Messe and the CeBIT being held annually in the city center.
The agricultural sector, although small, is present in the outskirts of Hannover, with wheat, potatoes, oats, beef, and poultry being produced in the area.
Hannover is served by Hannover-Langenhagen Airport, located 11km north of the city center. It offers frequent domestic and European flights and several flights to the Middle East. A separate cargo terminal provides a base for three airlines transporting goods to Munich, Stuttgart, and Paris. A large central railway station (Hannover Hauptbahnhof) is located in the city center and has 661 trains departing daily. It also connects to the ICE, a high-speed train system that provides fast and comfortable services on two lines between Munich and Hamburg and Dortmund and Köln. There is an extensive network of roads and expressways in Hannover, which connect the town center to the outer region of the city and to further destinations such as the neighboring countries of France, Austria, and Poland.
The Germans are known for their efficiency, and it shows in their telecommunication structure, which is globally connected. The CIA World Factbook indicates that Germany has the third-highest number of mainline telephones and Internet hosts in the world (2021). As a result, Hannover has a robust and highly advanced communication infrastructure.
The official language of Hannover is German, with 98% of the population speaking it as their first language; however, English is taught in all schools, so many Germans are fluent in the English language. In some of the smaller ethnic communities, Turkish, Kurdish, and Romani may be found.
Germany is known for its structured and innovative education system, which allows students to study the traditional way, allow for university acceptance, or take a more vocational option, whereby they can study more practically to develop the skills needed for a future job. There are several higher education institutes in the city of Hannover. The largest public university is Leibniz University Hannover, established on May 2nd, 1831. It has nine faculties that offer over 150 different level degrees, with 29.781 students enrolled in its study programs (est. 2018).
Other notable universities include the Hannover Medical School, established in 1961, with 3.256 students enrolled in its study programs (est. 2012), Hochschule Hannover, established on August 1st, 1971, with 10.040 students enrolled in its study programs (est. 2015), and the School of Veterinary Medicine Hannover, established in 1778, with 2.459 students enrolled in its study programs (est. 2012).
Business Costs in Hanover
Individual tax rates are based on tax brackets which vary depending on the income earned. Any individuals earning less than EUR 9,744 are exempt from paying income tax. Any individuals earning over EUR 274,612 are required to pay 45% tax.
Corporate taxes are levied on a federal and municipal level. Thus, the amount of tax payable depends on the business’s location. A company with several offices in different locations throughout Germany must pay the individual municipal tax rates for each office.
The introductory tax rate on a federal level is 15%, with an additional municipal tax bringing the total rate between 30%-33%. Many items are exempt from value-added tax, including financial, cultural, educational, and charitable services and any exports from the country. A reduced VAT rate is available for some foodstuffs, books, and newspapers, and the standard rate for all other goods and services is 19%.
Rental costs in Germany are on par with costs in Oslo and Amsterdam. In contrast, office rentals in Hannover are considerably cheaper than other major cities in Germany, such as Frankfurt and Munich, with average office rental costs of $54.29 and $54.47.
From January 1st, 2021, the minimum wage is 9.50 euros per hour worked and from July 1st, 2021, the minimum wage is 9.60 euros per hour worked. Since 2020, the minimum wage rate in Germany is around 1.584,00 EUR net.
In general, Hannover has lower labor costs and office rental rates than Germany’s larger cities.