Hamburg – The Gateway to the World (Tor Zur Welt)
The city of Hamburg is located in northern Germany and covers 755.22 km2 (291.59 sq mi), making it the second-largest city in Germany, after the capital city of Berlin. The central city area is inhabited by 1,845,229 people, with a density of 2,400/km2 (6,300/sq mi). The urban area is inhabited by 2,484,800 people (est. 2020), while the outer metropolitan area has a population of 5,107,429 people. The Deutsche Mark (DM) was replaced by the euro (EUR) currency fully adopted in 2002.
Germany shares its border with nine other countries and has 2389km along the North Sea and the Baltic Sea. The state of Hamburg is divided into seven boroughs and 105 quarters. Each borough has its own democratically elected parliament, which is voted in every four years by public members. Each of the parliaments deals with issues of local importance, such as transportation, schools, and local services. Quarters do not have independent governing bodies and are more for geographical and historical purposes.
Hamburg Economy
In recent times the economy of Hamburg has changed from industrial to a more service-based technological economy; the service sector now accounts for over half of all the jobs in the city. The majority of enterprises in Hamburg are classed as ‘small businesses. Over 90% of all businesses employ less than ten people. Although not as strong as it used to be, the industrial sector is still present, particularly in the aeronautical industry, with Hamburg being one of the essential areas for the production of aircraft parts in the world. The Hamburg Finkenwerder Airport (XFW) is located in southwestern Hamburg on an Airbus plant and employs over 12,500 people.
Hamburg is one of the major production centers of Germany, with many music companies, publishers, and television and radio centers operating from the city, such as Hamburg 1, Tide TV, Radio Hamburg, and Axel Springer AG.
The River Elbe has helped Hamburg become the economic center it is known as today. Famous exports include machinery, steel, automobiles, aluminum, and copper. Hamburg’s major import and export partners are China, Singapore, Finland, Sweden, and Japan.
Hamburg Infrastructure
Hamburg is one of the leading transportation hubs of Germany, with numerous travel connections throughout the state. Hamburg International Airport (HAM) is located 8.5km north of the city center and operates frequent domestic and international flights. Over 17 million people passed through the airport in 2019, making it Germany’s fifth busiest airport based on passenger traffic volume. The S-Bahn train operates services that run directly from the airport to several locations in the city center.
Hamburger Verkehrsverbund (HVV) is responsible for the operation of the transportation system, which is run and owned by several different companies. The HVV’s role is to create a smooth and unified journey for the commuter. There are currently bus, train, and tram lines in operation. The HVV serves an average of 1.95 million passengers a day. Bus services make frequent stops throughout the city center, and the Metro 5 bus line is the busiest bus route within Europe. Roads are well maintained and connect the state of Hamburg to surrounding cities and each of the neighboring countries.
The historic port of Hamburg is located on the banks of the River Elbe, and it is one of the most important ports for trade exports in both Germany and Europe. The port spans over 70km2 and has a large warehouse for storing goods. The Speicherstadt is a group of warehouses tourist attractions, but some are still used for extra storage space.
Hamburg Workforce
Hamburg has a labor force of just over 1 million people. An estimated 14% of the population holds a foreign passport, with the largest ethnic group in the city being the Turks. Other small foreign resident groups include the British, Polish and American. The official language of Hamburg is German, and over 50% of the population is fluent in the English language. Due to the large Turkish population, the Turkish language is also spoken in Hamburg’s communities.
The ministry is responsible for the educational system in the state of Hamburg. The city has a combined total of over 450 primary and secondary schools. There are also 17 private and public universities in the area, the largest being the University of Hamburg, with 42.106 (2014) students enrolled in degree programs. There are also several specialist institutes: The Helmut Schmidt school, which trains officers for the German Army, and The University of Music and Theatre. In total, over 75,000 people are studying in Hamburg.
Business Costs in Hamburg
The costs for renting an office within the Hamburg CBD are amongst the lowest in Germany, with the average rental cost being $36.72 per square foot per annum, compared to $52.47 per square foot per annum in Munich. It also has the most stable rental market in Germany. A discounted VAT rate is available for several agricultural products and foods kinds of stuff, but a 19% rate applies to most goods and services in the country.
Individual tax rates work on a tiered system and range from 0%-55% of total income earned. Corporate tax rates vary depending on what municipality the company is located in. On a federal level, there is a set 15% flat rate, in addition to a 5.5% solidarity tax. The trade tax (municipal) starts at 14% and never exceeds 17%; thus, total corporate tax rates are between 30% – 33%.
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. Labor costs in Hamburg are lower than in other German cities such as Berlin and Frankfurt while still maintaining the same skills and efficacy.
Hamburg offers several incentives to attract foreign investors, with low-interest loans and tax subsidies available for businesses that fit specific requirements.