Why 2025 Could Be the Perfect Time for Foreign Companies to Enter the German Market (Despite the Rise in Corporate Insolvencies)
The surge in corporate insolvencies throughout 2024 and continued economic uncertainty understandably raise concerns for investors and founders evaluating entry into the German market. But behind the headlines lies a landscape of strategic openings and untapped potential, especially for international companies agile enough to seize emerging opportunities.
Market Shakeups = Market Entry Points
Germany saw more than 22,000 insolvencies in 2024, a number driven by lingering pandemic effects, high energy costs, geopolitical instability, and rising interest rates. On the surface, this paints a troubling picture. However, a closer look reveals something else: structural shifts across industries that create opportunities for new players with the right timing, strategy, and offers.
Rather than a reason to stay away, these market shakeups can signal the right moment to enter.
Which Sectors Are Shrinking—and Which Are Open for Disruption?
Several sectors drove the insolvency spike in 2024. Hospitality businesses, for instance, were squeezed by regulatory crackdowns on platforms like Airbnb. Retail, including fashion, footwear, and textiles—faced rising costs and evolving consumer behaviors. Automotive giants, even in traditional hubs like Wolfsburg, struggled with the shift to electric mobility.
However, while some industries contracted, others remained resilient or even underexplored. For example:
Technology and Financial Services: From 2008 to 2024, the insolvency rate in sectors like IT, FinTech, and telecom remained strikingly low, according to the Statistisches Bundesamt.
Software and Digital Services: Computer programming, cybersecurity, RegTech, and e-commerce solutions continue to show strong demand, with room for innovation and expansion.
Financial & Insurance Services: Regulatory stability and frameworks like the Basel Committee's guidelines help keep these sectors relatively insulated.
These healthier sectors, often more open to innovation and less tied to legacy systems, represent attractive entry points for international businesses.
However, no sector was immune to the market turmoil in Germany in 2023 and 2024 due to the economic and political uncertainties and venture capital and funding limitations.
A Recovering Economy: Small Growth, Big Potential
While Germany’s GDP contracted by 0.2% in 2024, economists are cautiously optimistic for 2025. Forecasts from the Roland Berger Institute and the European Commission project growth between 0.4% and 0.7% in 2025 and over 1% in 2026.
This suggests a stabilizing environment where early entrants can benefit from lower competition, leaner market dynamics, and potentially more favorable acquisition or partnership deals.
Even a modest rebound can significantly reduce the risk of insolvency for new entrants, especially those offering adaptive tech solutions, automation, or process improvements.
Innovation as a Risk Mitigation Strategy
Artificial intelligence, automation, and smart risk management are helping companies not only survive but thrive during economic uncertainty. In Germany, the AI sector is tightly aligned with economic development policies, with research suggesting a potential GDP boost of 0.2% from AI adoption alone.
For foreign entrants in FinTech, LegalTech, RegTech, or B2B SaaS, this is a critical differentiator. Despite the regulatory uncertainties, demonstrating AI capabilities can lead to both operational efficiency and regulatory advantages, particularly with adherence to the EU AI Act and related frameworks.
Turnaround and Acquisition Opportunities
Insolvency does not only mean closure—it often means transition. Foreign companies can:
Acquire distressed assets at lower valuations
Enter partnerships with restructuring firms
Hire top talent from affected businesses
Fill supply chain or service gaps created by market exits
For the right investor, these conditions are not barriers, but launchpads.
Entering the Market with Confidence
To navigate this complex but opportunity-rich environment, it's essential to partner with local experts who understand:
Germany’s regulatory and insolvency frameworks
Sector-specific risk and growth dynamics
Cultural and operational business expectations
Our market entry and business expansion services include:
Go-to-market strategy and market entry project management support
Business culture and strategy workshops for founders and teams
Market and user research services to curate a user-centric product strategy
Marketing and localization projects for organic client acquisition
PR and event organization services to announce your market entry
2025 may not appear “perfect” at first glance—but for bold, well-informed companies, it’s a year of strategic openings and long-term advantage.
Where others see a risky landscape, we help you see the roadmap to resilient, compliant, and scalable growth.
Let’s talk if you’re planning market entry in Germany’s financial, legal, e-commerce, tech, gaming, or professional services sectors.
Download our free German Tech Market Readiness Checklist to assess your GTM readiness, or download our complementary German Banking & Fintech Market Report 2025 to learn more about the financial services trends and market predictions.
