Nearly 80% of Germany's mid-sized companies (Mittelstand) cannot imagine relocating their operations abroad, according to a new survey by DZ BANK. Only 8% are open to the idea of moving entire sites to other countries, and just 5% would consider shifting their corporate headquarters overseas. Meanwhile, 13% could envision transferring specific departments abroad.

Stefan Beismann, Head of Corporate Clients at DZ BANK, commented: “For now, Germany remains the default location for German companies.”

Strong Domestic Commitment Despite Deteriorating Conditions

The survey, which polled over 1,000 executives and decision-makers at mid-sized German firms, reveals a strong home bias—even as concerns over Germany’s competitiveness as a business location mount. While some large corporations are accelerating their international expansion, the Mittelstand remains largely committed to its domestic base.

Overall, 80% of respondents stated they cannot imagine fully or partially leaving Germany. This sentiment is particularly strong in the construction and service sectors, where 87% of companies expressed a firm commitment to remaining in Germany.

“Germany is still the location of choice for the Mittelstand, but not unconditionally,” Beismann explained. “Many mid-sized companies are flexible enough to consider international moves if domestic conditions deteriorate further. Their current loyalty reflects the Mittelstand's traditional sense of responsibility toward employees and its role as a regional employer.”

Selective Relocation Under Consideration

While full relocation is rarely an option, some firms are considering moving parts of their operations abroad. Only 8% would contemplate shifting entire sites overseas, with slightly higher openness (16%) seen in the food industry. Just 5% of companies overall are open to relocating their headquarters abroad, although nearly 10% of agricultural firms would consider this move—compared with only 2% in construction.

A clear trend emerges: the larger the company's revenue, the greater its willingness to explore international relocation.

Notably, 13% of firms are considering moving individual departments abroad, primarily for cost reasons or to escape bureaucratic hurdles. In the energy-intensive chemical sector, over 20% of companies are contemplating such steps. Again, firms with annual revenues exceeding €50 million show greater readiness to act.

Calls for Reform: Bureaucracy, Infrastructure, and Investment Certainty

Despite their continued commitment to Germany, mid-sized companies offer only lukewarm assessments of the country's business environment. On a scale from 1 (very good) to 6 (very poor), Germany's internet infrastructure received an average rating of 3.5, while investment planning certainty scored 3.3. As a research hub, Germany fared slightly better with an average score of 3.0.

Government performance, however, was rated harshly. Administrative efficiency received a 4.4, and digitalisation efforts were graded at a worrying 4.5.

These results underscore that while the Mittelstand remains rooted in Germany, its patience may wear thin unless structural reforms—particularly around bureaucracy and digital infrastructure—are urgently addressed.