Setting Up a Subsidiary in Germany

Yu Yajun had one clear goal when she applied to participate in the Manager Training Programme of the Federal Ministry of Economics and Technology (MP). She planned to establish a subsidiary of her firm Amate Technology in Germany. Therefore, she wanted to gather detailed information on the ground regarding the economic climate and investment conditions before taking such a step.

Wuhan. Amate Technology is a supplier of temperature monitoring wireless sensor systems. In 2006, CEO Yu Yajun founded the company together with her partners in the Central Chinese city of Wuhan. The firm grew quickly and became the market leader for these high-tech products in China. Although her products were already on the European markets, Yu Yajun was convinced that real expansion without a local subsidiary would be extremely difficult. She was also convinced that it would be best to establish this subsidiary in Germany – Europe’s most important industrial base. This is how Yu Yajun came to attend manager training at the German Management Academy of Lower Saxony (DMAN) in the Lower Saxon town of Celle.

Yu Yajun visited various companies and several trade fairs in Germany, including the industrial fair in Hannover. By exchanging experiences with entrepreneurs from the high-tech sector, the manager had her conviction confirmed that an SME in the technology industry must concentrate on one key area. She should not try out several new areas of business without a sound strategy, as many Chinese companies do after seeing initial success.

In order to expand the business in Germany and Europe, Yu Yajun commissioned the Aachen agency TEMA Technologie Marketing AG to advise on and implement necessary measures. With support TEMA’s support, Amate Technology became a member of the M2M Alliance in November 2012. M2M stands for “Machine to Machine” and represents the automated exchange of information between machines themselves or between machines and a central control centre. The M2M Alliance is the largest association in this sector. It represents the economic interests of its members and promotes cooperation and information exchange between individual industries and companies. Yu Yajun began to set up the Aachen subsidiary in April 2013. A German team was charged with establishing business relationships with German and European customers for Amate Technology. From her own experience, Yu Yajun understood the importance of knowing and understanding the differences between China and Germany. Therefore, in June 2013, she invited her German employees to attend a ten-day training programme in China. The successful businesswoman believes that this gave her colleagues in Aachen a better understanding of the parent company, Chinese corporate culture and a different management style. A relevant experience on the ground is much more effective than simply relaying information that lacks practical relevance – Yu Yajun has been convinced of this since she participated in the MP in Germany.