Located 100 miles south of capital city Berlin, Leipzig is the most populous city in the German state of Saxony.

With a residential population of approximately 600,000, rising to1.1 million in the metropolitan area, it now ranks as Germany’s eighth most populous city.

Boasting a diverse economy with numerous industries represented, major names including Amazon, DHL and BWM investing in Leipzig continues to showcase its status as a burgeoning business location.   

Further showcasing the growing and diverse economic investment in Leipzig, global firm HIH Invest has bought a new warehouse near Leipzig airport, installing AES Airplane Equipment & Services, an aircraft component maintenance firm, as the new tenant.

Increasing investment opportunities in Leipzig as digital tech sector grows 

One of the sectors enjoying sustained growth and investment in Leipzig is digital tech.  Alongside the strong automotive and healthcare sectors, information technology has emerged and become established as a primary industry in the city and across the region.  

When considering investing in Leipzig, this is a sector that is attracting significant interest as the tech hub continues to grow.  Since 2012, it is reported that around 500 new IT companies have established their businesses in the Leipzig Region, a growth that outstrips all other German cities.

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Boasting a young, tech-savvy workforce and affordable housing, the city represents a major investment opportunity in this field.  City of Leipzig official data has reported that around 15,000 people are now directly employed by over 1,300 ICT enterprises in Leipzig.  

Tech investment and collaboration strengthening

Companies investing in Leipzig include those involved in software asset management, eCommerce, software development, travel and comparison websites, IT solutions for logistics, AI and Big Data, cybertech, and eHealth. 

With collaboration between tech establishments including the Leipzig University of Applied Science, and the SAE Institute, the local tech industry has flourished.  

In addition, and a major investment draw, the city has been recognised by the local government as a Smart Digital Initiatives Hub.

This status determines the city as having a strong market for companies involved in high-tech, smart infrastructure, smart energy and e-health.  

Investing in Leipzig offers business tax incentives 

When it comes to investment strengths, the tax landscape is an important consideration for businesses.  

As an economic powerhouse in Europe, Germany provides a competitive system of corporate taxation designed to stimulate inward investment to continually strengthen the economy.  

Companies in Leipzig are eligible for an annual research allowance of up to EUR 1 million, a perk that continues to boost industries including biotech, healthcare and high tech.  

In addition, companies that employ in-house research staff can allocate 25% of the wages and salaries, including tax-free social security contributions to be credited against their annual company tax bill.  

Coupled with the research allowance, this is an attractive investment incentive for start-ups with initial losses. 

Life science sector driving biotech investment in Leipzig 

One of the significant investment strengths of the city is the emergence of a burgeoning life science sector.  

As a cluster region for research, innovation, and production, Leipzig life sciences and biotechnology companies have made important investments in the local economy.  

With a steady stream of highly trained specialised staff from local institutions and Life Science Campus, investing in Leipzig has become a strong draw for applied science and research firms, as well as biotech and life science companies including BioCity and Haloteck Biotechnologies.  

Increased collaboration between life-science focussed academic institutions, biotech businesses and research facilities continue to strengthen, with investment potential increasing.  

As a city already regarded as a pharmaceutical and medical logistics hub, DHL continues to expand operations in Leipzig, strengthening the distribution capabilities that are critical for both domestic and international business investors.  

Research institutions in the region include the German Centre for Integrative Biodiversity Research and the Max Planck Institute for Evolutionary Anthropology, both of which continue to invest in the local industry and economy. 

Dovetailed initiatives attracting investment in Leipzig 

In part, the investment strengths and draw for those investing in Leipzig are down to a range of initiatives.  

From tax incentives to regional economic support from government and corporate agencies, they are designed to attract new businesses while encouraging expansion of existing corporate operations.  

Increased funding for rural areas around Leipzig, a state-supported urban development project are two initiatives that have contributed to increased business investment in the city.  

Support from the Leipzig Chamber of Commerce and industry is increasing investment, augmenting the number of start-ups and relocations to the city.  

Having initiated a collaboration between potential investors and regional leaders for economic development, the planning and approval processes for business operations have become more streamlined.  

With a reduction in bureaucratic hurdles and more business collaboration potential, investing in Leipzig has become an increasingly propitious prospect.  

Information, Data and Statistics from BDO Germany, Leipzig Chamber of Commerce and Industry, Statista, Globalisation and Cities Research Network, German National Statistics.