Questions and answers on fees, membership and activities of the IHK

How does the IHK represent the interests of businesses?

Taxi drivers or industrial operations, start-ups or experienced entrepreneurs – all businesses benefit from the IHK’s regional economic advocacy:
  • When the IHK, for example, ensures improved transport links to the city centre, this pleases everyone who has a business there.
  • When the IHK strongly opposes a local authority increasing their charges, this benefits all the companies in the municipality.
  • When the IHKs join forces with employment agencies, schools and universities to bring together young, qualified people with companies, this is important for the entire region.
  • And when the IHKs, via their umbrella organisation the German Chambers of Commerce and Industry (DIHK) in Berlin, advocate against tax increases and for easier start-ups, well-qualified skilled workers and affordable energy, this is good for all Germany’s businesses.

What services does the IHK offer businesses?

  • Marketing or tax, innovations or law – businesses can get valuable expert advice on all key matters in the IHK.
  • Start-ups can discuss their business ideas with their IHK. They can get help with business plans, key industry data, tips for bank interviews and help with funding applications.
  • Businesses can clarify corporate finance issues on consultation days with financial institutions and development banks.
  • Valuable contacts can be made during industry meet-ups and entrepreneur groups. Business owners who want to pass on their businesses can get to know potential successors via their IHK.
  • And anyone wanting to break into a foreign market can also take the first step from home. The IHK is very well-connected with the Chambers of Commerce Abroad (AHK) and their offices in more than 80 countries. You can get information about the market and familiarise yourself with the necessary formalities, such as import regulations, via your IHK or directly at one of the AHKs. Later, the relevant AHK can help with your first entrepreneurial steps on site.
And last but not least: IHKs provide a solid education. For example, each year they organise more than 590,000 intermediate and final examinations. This also benefits those who cannot provide training themselves but, for example, want to employ an office administrator. The IHKs do all of this independently – their motto: by business, for business.

Can’t the government take care of the training?

The government knows that it can’t even begin to organise training as well as the IHKs. And it certainly wouldn’t be as realistic! This is why it transferred responsibility for professional training to the IHK.
The IHKs don’t just relieve the state of the burden, however. They also organise the training more quickly, more appropriately and more cheaply than government institutions could. This is not least due to the 170,000 women and men from the business community and vocational schools, who volunteer on around 28,000 IHK training committees.

How do businesses rate the services of their IHK?

Anyone who knows the IHK and uses their services places great value on them! More than 70 per cent of companies are satisfied or very satisfied with their IHK. This is shown in the findings of a recent TNS – Emnid survey, published in August 2013. For individual services – such as appointing experts or consultation on education and training – the satisfaction rates are at 90 per cent. 95 per cent are satisfied with IHK start-up advice.
The IHK organisation regularly analyses improvement opportunities based on this Emnid survey, but it also uses surveys carried out by IHK partners in the education, political and administration sectors, as well as mystery shopper operations.
The IHK also commissioned a measurement of administrative costs via the Federal Statistical Office. According to this study, the information obligations arising from the IHK by-laws only cost German businesses an average of eleven euros per year in bureaucratic costs.
The IHKs are thus models of minimally bureaucratic action in the interest of businesses.

Does compulsory membership make sense?

Yes – for three reasons:
  • Only the statutory membership enables the IHKs to represent all traders in their region equally – and not just the individual interests of certain major enterprises or sectors. This means the IHKs are committed to improving infrastructure and transport links, lowering taxes and duties, reducing bureaucracy and promoting skilled young workers through education and training. This benefits everyone – competitors and business partners alike. This can only work if everyone takes part and contributes to the funding. Otherwise, the well-financed firms would call all the shots, according to the principle of “he who pays the piper calls the tune”.
  • IHKs replace state administration – this, too, is only possible thanks to statutory membership. The IHKs take on a number of public service tasks for businesses, e.g. in professional training and export promotion. Without the IHKs, the government would have to incur further administrative expenses to complete these tasks. IHK member fees therefore prevent higher taxes and fees.
  • Finally, statutory membership ensures the IHKs’ political neutrality and guarantees their independence.
The Federal Constitutional Court, incidentally, also believes statutory membership is necessary. “The proper performance of public functions makes an organisation based on statutory membership both necessary and appropriate ... If membership of the IHK were voluntary, then the composition of the members would be arbitrary,” argued the judges.

Could the IHKs not also complete their tasks without compulsory membership?

Without the membership of all commercial enterprises, the IHKs would become an extended arm of the state. The economy would have much less organisational freedom. The IHKs would be subject to strict state supervision and directives. The government in this case would have to enact numerous regulations to replace the current IHK by-laws.
IHKs perform more than 50 public functions. In addition to training, these include:
  • the issuance of certificates of origin,
  • the implementation of proficiency examinations,
  • the keeping of registers,
  • the appointment of certified experts
– and more functions are being added all the time. For example, at the moment:
the recognition of professional qualifications attained abroad or the proficiency examination for financial investment intermediaries.
Without statutory membership, we would need a public office, for example, to supervise vocational training and examine the trainees. We would need regional economic development agencies, expert agencies, state commissions appointing financial and commercial judges, and governmental advisory committees on economic affairs in transport and land use planning.
The list goes on and on! And the state would fund such additional functions from taxpayer contributions. If the state were also to lose 218,000 volunteers and acknowledge the fact that public authorities are less able, for instance, to organise professional training as efficiently as the economic community, this would mean higher taxes, and fees for these additional governmental tasks would have to be levied on businesses. These would be significantly higher than the fees they currently pay to the IHKs.
Around 175,000 company examiners volunteer in the vocational and professional training sectors alone every year. Taking on these examination functions would burden the state budget with several hundred million euros. The economy would simultaneously lose opportunities for co-determination and investment.
In developing training regulations, the entrepreneurs involved in the IHK organisation help shape the qualifications of the future and, with their expertise, guarantee that young people do not have to learn things that are not needed in businesses.

How is the membership fee calculated?

It is made up of a base fee and an apportionment:
  • The base fee is tiered to correspond with the company’s capacity.
  • The apportionment is based on the company’s income. So: if you make more profit, you pay more. The IHK fee is therefore based on companies’ financial capabilities – it’s also a form of solidarity-based financing.

Why don’t all businesses have to pay fees?

Many traders are only active as a sideline or only to a very small extent. They generate correspondingly low incomes. These so-called bagatelle traders have been exempted by law since 1999.
Specifically:
  • Natural persons and private companies entered in the commercial register are exempted from fees if their annual income does not exceed certain limits – generally €5,200.
  • Start-ups are also exempt: since 2004, natural persons who become self-employed for the first time are not required to pay fees for the first two years and only the base fee for the two years following. They only have to pay the base fee and apportionment after that. The requirement that they are not entered in the commercial register and that their annual income does not exceed certain limits – generally €25,000 – still applies here.

Shouldn’t the IHKs first reduce their costs before charging their member companies?

They do so continuously. The IHKs evolve constantly and adapt their structures, just like businesses. They ensure their organisations are streamlined and decision paths are short. The entrepreneurs in the IHK plenary assemblies and IHK committees make sure of this.
The IHKs work effectively and cost-effectively, because the entrepreneurs themselves decide on expenditure and revenue. Unlike public authorities, IHKs conduct their accounts according to the double entry principle. This enables them to be transparent about income and expenses, assets and funding.

Where does it say which services companies get from the IHKs in return for their fees?

You want to know how much IHK fees are? How many small and medium-sized companies are members of the IHK plenary assembly? How many employees the individual IHKs have? Or how many certificates of origin the IHKs issue? How many start-ups receive consultations? You can look it up here: www.ihk.de/ihktransparent.
This is where you’ll find comprehensive facts and figures on fees, services, offices and volunteering. This information is updated annually.

Who sets the fee amount?

The IHK parliaments, i.e. the elected entrepreneurs in the IHK plenary assembly, decide on the IHK budgets and financing. And therefore also on the amount of membership fees.

Why do IHK fees vary from region to region?

Fees are not set centrally; the regional IHK plenaries decide on the amount. If the entrepreneurs decide to increase IHK services, they may finance them through higher fees or contributions. The lower limit is set at the point where the IHKs have to comply with their legal obligations.
The economic strength of companies also differs by region. This can lead to a IHK in a region with a weaker economy having to charge higher fees in order to meet their responsibilities.
Currently, the lowest base fee for small producers varies between €10 and 60 a year. For companies entered in the commercial register, the regular base fee starts between €30 and 290 a year. The average IHK fee, based on paying member companies, is around €296 a year, or €25 a month.
But a good third of IHK members do not have to pay a fee as their profits are too low or they are start-ups.

Can the IHK reimburse companies using their reserves – and lower the fees?

Just like companies, the IHKs have reserves on their balance sheets for items such as pension obligations. The aim is not to just record these as liabilities, but to fully fund them. Furthermore, the formation of reserves is applied practice not only in companies, but also in the IHKs. This corresponds to the commercial principle of caution.
The financial statutes of the IHKs, adopted by the plenary assembly, provide an equalisation reserve and, in addition, the possibility of provisions for certain events, such as renovations, replacement acquisitions for IT, using dedicated reserves.
As soon as IHK plenary assemblies determine that reserves are no longer necessary, or not in the current amount, they will also be reduced or resolved following the appropriate decision.

Is it only the big fish who have a say in the IHKs?

No. Each IHK member has a voice in votes, whether they’re industrial companies, greengrocers or taxi drivers. This is regardless of how large the business is or how much they pay in fees. This is a key advantage of statutory membership.
The plenary assemblies are also a reflection of the regional economic structure: all sectors, regions and sizes of company are represented in the IHK committees.

How is democracy ensured in the IHK?

Through the IHK plenary assembly. This is the parliament and most important body of the IHK. Member companies of an IHK elect the members of the plenary assembly, freely and secretly, every four or five years. The companies are divided into groups according to their sector.
This means the sector structure of the region is reflected in the plenary assembly.
The plenary assembly meets regularly and makes decisions on the IHK’s main work priorities, finances and general affairs.
There are around 5,300 plenary assembly members in the 79 IHKs in Germany, 16 per cent of which are women and 84 per cent men.

What influence do small and medium-sized IHK companies have?

Germany’s economy is full of small and medium-sized enterprises (SMEs). This is reflected in the plenary assemblies. In fact, around 76 per cent of the companies represented in the plenary assemblies are SMEs. Only around 24 per cent have more than 250 employees.

What do the IHKs do for smaller companies?

If a company has a problem, it can find experts in the IHK to help. This is especially important for smaller companies. Whether it’s education and training, law and taxes, environmental protection or advertising questions – the IHK has the right departments and experts.
The IHK thus offers all businesses expertise that otherwise only large companies could afford. And a recent Emnid survey shows that companies appreciate IHK services: 87 per cent are satisfied or very satisfied with seminars on business-related topics.
90 per cent are satisfied with education and training, and the satisfaction rate is 91 per cent when it comes to the appointment of experts and information relating to addresses and the commercial register. It’s also 91 per cent for start-up consultations.
The IHK offers start-ups an all-round service from a single source – initial information about self-employment, personal consultations on business concepts, seminars, consultations with banks and savings banks, and opinions on grant applications. It can also advise on where and how government funds are available and on choosing the right corporate form. Company founders may be able to find companies due for transfer on the IHK exchanges.
Last but not least, entrepreneurs can make contacts with other companies at many IHK events and so get to know potential business partners.

Is it always the same people who steer the ship at the IHKs?

Anyone who participates can exert influence. Participation is essential. Around 218,000 people volunteer with the IHK – for just this reason.
This is why there are, for example, expert panels in which companies can discuss current regional and economic policy topics and provide politicians with appropriate and objective advice based on the results.
The more companies engage with their IHK and see themselves as more than just passive members, the farther the members’ influence will reach – both their clout in the region and beyond.
And each entrepreneur can stand for election to the IHK plenary assembly and help shape the fate of the IHK and the regional economy as an elected representative. So: getting involved is well worth it!

What is the advantage of self-management?

Self-management replaces government management. Self-management means the economy decides, acts and pays by itself. Economic self-management turns the affected parties into stakeholders and ensures freedom. The Federal Constitutional Court also argued this in its decision on statutory membership.
Shouldn’t the IHKs take over even more tasks from the government?
That would make sense where these are tasks that affect the economy and which they could handle better than the government. The IHKs are institutions with which companies can and want to manage their own affairs.
For example, they want to legally accept and certify business registrations as well as issue environmental certificates. This would be consistent deregulation and another step towards more self-management.
The IHKs demonstrated the speed and cost-efficiency with which they can take on public service tasks when the government transferred to them the registration and licensing for insurance intermediaries.
The Federal Ministry of Economics praised them: “More than 40,000 certified licensees and 190,000 registrations in 1.5 years show that the chambers are extremely well prepared for this new task and have done a good job.”

Contact

Industrie- und Handelskammer Chemnitz – Chamber of Commerce and Industry Chemnitz
Straße der Nationen 25
09111 Chemnitz
Tel. +49 371 6900-0
Fax: +49 371 6900-191565
Email: chemnitz@chemnitz.ihk.de