Capital movements and payments
The movement of capital and payment transactions between Germany and other countries are, in principle, free as is all foreign trade activity. However, the German Foreign Trade and Payments Act (Außenwirtschaftsgesetz), in conjunction with chapters 6 and 7 of the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung), provide for restrictions and financial reporting requirements.
Restrictions
There are restrictions on the movement of capital and payments which include, but are not restricted to, those in the context of
- the Treaty about the settlement of Germany’s foreign debt,
- the acquisition of certain undertakings, and
- the embargo rules (financial sanctions).
Reporting requirements
The reporting requirements that are in force with regard to the movement of capital and payments apply to both businesses and natural persons, and primarily serve for drawing up the German Federal balance of payments.
Reporting obligations have been imposed on, for example,
- the assets of German citizens who are resident abroad,
- the assets of foreign citizens resident in Germany,
- incoming and outgoing payments (not including payments for imports of goods, export earnings),
- claims on, and liabilities to, foreign citizens, and
- the acquisition of certain businesses.
The information above only provides a short summary of the reporting requirements and restrictions on the movement of capital and payments that are in force at present.
