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Düsseldorf has been a popular destination for Japanese businesses wanting to set up a European base since the 1980s, and more recently Chinese companies have followed suit. Wendy Atkins looks at what the city offers investors from the Far East as well as the rest of the globe.

Düsseldorf has become a popular location for international companies from multiple sectors seeking to establish a European or Europe, Middle East and Africa (EMEA) base. Asian firms, in particular, have favoured the city, enticed by its track record of attracting big name Japanese and Chinese firms.

The city’s long association with Japan can be seen in the level of activity at the Japanese Chamber of Commerce (JIHK). “There are approximately 1800 Japanese companies in Germany at the moment, and about one-third of them are based in North Rhine-Westphalia, but mainly Düsseldorf,” says Seiichi Kuroiwa, president of the JIHK in Düsseldorf.

“Our chamber currently has more than 500 members, making it the biggest Japanese community in Europe. The size of companies involved varies from those with a European headquarters with hundreds of staff to very small firms with just five to 10 employees.”

Big in Japan

Mr Kuroiwa says that Düsseldorf and the surrounding state are attractive to JIHK members because it has the largest GDP growth in Germany. “Many large company headquarters are also here and there’s a large market for our members,” he says. “The quality of the local workforce is very high and the labour and real estate costs are pretty reasonable compared with other areas such as Munich and Frankfurt.”

According to Mr Kuroiwa, three types of Japanese firm operate in the city. “There’s almost no company that covers only the German market from Düsseldorf. Some have their EMEA headquarters here. Others operate their European headquarters here, and others use the city as a base to cover Germany plus another area, such as northern Europe or Switzerland,” he says.

He adds that the JIHK is very active in supporting Japanese businesses to set up shop. “We provide local information in Japanese and put people in contact with members who are lawyers and tax advisers,” says Mr Kuroiwa.

Japanese chemical company Asahi Kasei has set up a European base in the city employing about 50 people. This houses Asahi Kasei Europe, which became an operating holding company in April 2016. The company’s European headquarters were in Belgium in the 1980s. “Our business is focused on the automotive industry, so the German market is better for us,” says Hideki Tsutsumi, managing director at Asahi Kasei Europe. “It’s also geographically the centre of the eurozone and very convenient for accessing suppliers.”

Moving on

Another firm to relocate is Chinese telecoms giant Huawei. It moved its European headquarters from London to Düsseldorf in 2007. “We had to make a decision because the business had grown in Europe and we had to extend our operations as well as our European back office,” says Torsten Küpper, vice-president and director, corporate and public affairs, at Huawei Technologies Deutschland.

“We therefore had to move our location. One option was to move to a bigger location in the UK, which had the major advantage of language. However, the disadvantage was that the UK was not part of the Schengen area [the 26 countries of the EU that have abolished border controls], so if a Chinese member of staff wanted to travel from UK to a back office in any other European country, they would always have to apply for a visa. But if they’re based in Düsseldorf and already have a Schengen visa, they can very easily travel to other European locations to visit other European operations.”

The ability to travel easily to other major continental business locations is a key attraction for firms that have established their headquarters in the city. “If you’re here and want to go to Benelux or France, it’s easy to do so by car, but in the UK, you always have to take a plane, so there’s a lot more flexibility,” says Mr Küpper.

Home from home

Düsseldorf’s history of hosting Asian cultures has also encouraged firms from the region to establish a base there. “Even in the 1980s, Düsseldorf was very successful in attracting the Japanese community, making it into a kind of European headquarters for Japan,” says Mr Küpper. 

Today, this reputation is proving a big attraction for Asian employees and becoming a major factor in their decision to take up posts in the city. With the area around Immermannstrasse often referred to as ‘Little Tokyo’ and 90% of all Japanese companies in the state based in the city and neighbouring districts of Mettman and Neuss, this popularity comes as no surprise. “People receive information from colleagues who are already here that tell them how good it is for their work-life balance,” says Mr Küpper. “Also, there’s a low crime rate and the city is a good size.”

Mr Tsutsumi agrees. “As a Japanese company, with expats and families, it’s very convenient here. There’s a very big Japanese society, Japanese food is easily available and it’s a very safe and compact city,” he says. 

Centre for telecoms

Another plus for firms such as Huawei is that Düsseldorf is Germany’s centre for telecoms, which has led to the creation of an ecosystem of suppliers that it and firms such as ZTE can tap into.

Direct flights to Asia from Düsseldorf are also a big bonus. “Cathay Pacific flies directly to Hong Kong and that’s only 60 kilometres from our headquarters in Shenzhen, so it’s very convenient,” says Mr Küpper. Japanese travellers are well served as well with direct daily flights to Tokyo Narita. According to Asian firms, Düsseldorf’s and Germany’s authorities are switched on to the needs of Japanese and Chinese employees – including the visa process, which businesses find pretty straightforward.

It is inevitable that there is talk that cities such as Düsseldorf could become even more attractive as a relocation hub for firms post-Brexit. But businesses are remaining tight-lipped about their intentions. “We haven’t noticed an increase, but watch this space. We are still in a wait-and-see situation,” says Mr Kuroiwa.

This article is sourced from fDi Magazine
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