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Hamburg is capital city of family companies

Hamburg leads the way with 34 family-owned companies, followed by Düsseldorf with 16 and Munich with 15

Hamburg is the capital of family-owned firms, according to a June 2016 study of top family companies by EY consulting and Matchbird business networker. The study examined 678 family companies with headquarters in Germany and annual turnover of at least EUR 300 million. Hamburg leads the way with 34 family-owned companies, followed by Düsseldorf with 16 and Munich with 15 such firms.

‘Never bet the company’

Peter Englisch, Partner and Director of Family Companies at EY, said “Family companies are leaving their mark on the German economy. They have a key share in Germany’s success and prosperity and the good labour market.” A focus on continuity, sustainability and long-term planning is widespread among such companies, he stressed. Professor Peter Klein, Department Strategy & Leadership at HSBA, and who researches family companies, also confirmed this view. He pointed out: “There is an unspoken, inter-generational contract according to which the company has only been ‘borrowed’ from the grandchildren.” He added: “Unlike the publicly-listed, big, global-operating companies, decisions in third and fourth-generation, family-owned companies are based on values and traditions. However, there is often greater risk aversion in such companies along the lines of ‘never bet the company’.”

13 per cent of top family companies are older than 150 years

Commenting on the pursuit of apparently long-term, viable goals, Englisch stressed: “Many family companies have an impressive history – 13 per cent of top family companies are over 150 years old.” The EY study noted a sharp increase in employment and turnover during 2014 (study is based on the fiscal year 2014/2015). During that period, some 73 per cent of companies grew their turnover and 63 per cent reported increased employee numbers. Only 21 per cent or 23 per cent reported a drop in turnover and employee numbers including Hamburg-based, family-owned companies that suffered a 0.3 per cent decrease in turnover.

Significance of Germany’s family-owned companies

Top family-owned companies had annual turnover of around EUR 1.48 billion – which equates to the combined gross domestic product of Sweden and Spain. Most family companies work in industry, food, trade, automobiles and mechanical engineering. The automobile industry has the biggest workforce with 1,656,483 employees and generates the highest turnover of EUR 446,687 billion.

Sources and further information:

A concept to reform inheritance tax agreed by Germany’s coalition government aims to protect mainly medium-sized companies and to keep jobs. Under the reform, company heirs would be exempt from inheritance tax, if they continue to run the company long after their inheritance, keep jobs and can prove that taxation would threaten the firm’s existence. A means test requires heirs to prove business assets of over EUR 26 million. Business assets of over EUR 90 million do not qualify for a tax rebate. Companies with only five employees will find it easier to qualify for tax exemptions.

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