Dortmund – The Steel City (Stahlstadt)
Dortmund is a city located in the Arnsberg administration region, Rhin area of Western Germany. Situated in the Bundesland of North-Rhine Westphalia, Dortmund covers an area of 280.71 km2 (108.38 sq mi), making it the largest city in the Ruhr Valley and the seventh-largest in the country. In 2020 official government statistics estimated the city population at 587,696 with a density of 2,100/km2 (5,400/sq mi). The urban area population (Ruhr) is estimated at 5,302,179 people, while the metro area population (Rhine-Ruhr) is estimated at 11,300,000 people. The official spoken language is German.
Dortmund has a long history as an industrial city but has undergone a significant transformation into today’s modern cosmopolitan center. Aside from significant structural and economic change, the city has also enjoyed widespread cultural development by building new shopping precincts and a Philharmonic Hall (Dortmunder Philharmoniker). In 2010, Dortmund has embraced the Ruhr region’s status as the European Capital of Culture (awarded by the European Union) by rolling out a vibrant creative program of projects and events. In 2021, Dortmund has won the competition “iCapital Award 2021 – European Capital of Innovation”.
The city has also earned the nickname of the “Green Metropolis” because almost half its area is comprised of waterways, parks, and woodlands, which, combined with its architecture and sporting facilities, has begun to attract large numbers of visitors.
Dortmund is currently governed by the Social Democratic Party of Germany (SDP) (which has a long history as the biggest party in the town council). The city’s current Lord Mayor of Dortmund is Thomas Westphal (assumed office on 1 November 2020) of the Social Democratic Party.
Dortmund is the powerhouse of the Rhine Ruhr region. In 2021 the state statistics office estimated the city’s GDP at €22.574 billion, some 17% of total regional GDP. At the same time, GDP per capita was estimated at €38,469.
Dortmund has transitioned from an industry-based economy (producing steel, coal, and beer) into one dominated by the services sector in the past few decades. The transition was driven by the “Dortmund Project,” an initiative set up as a public-private partnership to strengthen the city’s economic power. Home to numerous medium-sized enterprises, core sectors now include healthcare, manufacturing, energy, financial services, and business.
Dortmund has also become recognized for its dynamic technology sector that encompasses a range of areas from Biotechnology and Microtechnology to Automotive and Life Sciences. The sector is undergoing rapid growth, and the city is now home to hundreds of IT companies, manufacturing firms (specializing in nanotechnology), and logistics firms.
The city also enjoys a burgeoning creative sector with advertising, design, architecture, fashion, and music.
Dortmund’s agricultural sector, although small is, still plays an essential role in the local economy. Farms and agricultural land surround the city center, producing grains, vegetables, and meat products.
Dortmund’s location makes it a central transportation hub for goods traveling from the west to the east of Germany and beyond. The city is linked to other major cities and neighboring countries by a network of well-maintained autobahns as it lies right at the center of the European Motorway Network.
The city center operates a modern and efficient public transport system that consists of an underground, suspension railway, and buses.
Dortmund’s central railway station, or Hauptbahnhof, moves over 982 trains per day and 190,000 passengers, making it the busiest station in the Ruhr Area and the second busiest in Germany. The station operates frequent Eurocity and Intercity trains to other major German and European destinations, alongside extensive regional services.
Dortmund also boasts the largest canal harbor in Europe that offers regional business a direct connection to the significant seaports throughout Europe.
Dortmund’s International Airport is the city’s largest airport and lies 10 kilometers east of the city center. The airport is overgrowing, with a newly built hall and extended runway to meet demand. According to official statistics, in 2022, the airport had over 2.5 million passengers to major destinations all over Europe.
In 2019 The City of Dortmund Economic Development Agency estimated Dortmund’s total workforce over 325,000 people. The workforce is predominantly German, with Turkish, Croatian, Serbian, and Dutch.
Around 79% of the workforce was employed in the city’s services sector, 20% in Manufacturing. Agriculture and forestry accounted for the remaining 0.5%. Primary industries within the services sector included rental, real estate, financial, insurance, transport, communications, and trade.
Dortmund’s highly skilled workforce results from the city’s excellent public education system. As a major university center, the city is home to a large student body that attends its many facilities, including the Technical University, University of Applied Sciences, and International School of Management. The city is also a leading location for science and research, containing several research organizations and institutes that interlock with the universities and local industries providing integrated learning opportunities. Fields of expertise include IT, Micro Mechanical Systems, Biomedical Science, and Robotics.
Dortmund’s unemployment rate at 11,5% (est. 2017).
Business Costs in Dortmund
Germany’s individual income tax rates work on a 0% – 45% progressive scale.
Corporate tax is charged on corporate enterprises, particularly public and private limited companies and other corporations, e.g., cooperatives and foundations. In addition, businesses are expected to pay a solidarity tax of 5.5% and a trade tax. The standard corporate rate in 2021 was set at 15% but combined with the additional taxes. The effective corporate tax rate is about 30%-33%.
The standard VAT rate in Germany is 19%, while a reduced VAT of 16% can be applied to food and agriculture products.
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.
Office rental costs are considerably cheaper in Dortmund than in other major German cities such as Berlin and Munich, have estimated costs of €246 and €409/sq.m per year, respectively.