Large-scale privatization of state-owned firms is under way in the German Democratic Republic

Business America, August 27, 1990

A large-scale privatization of state-owned enterprises is currently being carried out in the German Democratic Republic. The "trustee institution" (Treuhandanstalt) in charge of this process will be attempting to sell off nearly 8,000 firms in coming months, creating stock companies (Aktien Gesellschaft, AG) or limited liability companies (Gesellschaft mit beschraenkter Haltung, GmbH). Large conglomerates (Kombinate) are being broken up into independent firms, some of which may stand alone while others might be merged together.

Not all of these firms are expected to survive. Many of them will have to undergo extensive restructuring in order to become competitive under new market conditions. However, all GDR firms will be required by Oct. 1, 1990 to submit balance sheets similar to those used in the Federal Republic of Germany. Many of them have already completed these reports, which make it much easier for potential buyers or partners to distinguish attractive opportunities from expensive and problematic undertakings.

Three new business facilitation offices have been established to help foreign companies explore opportunities in the GDR. These include the Consultation Office at the State Trusteeship, the Office for Industrial Cooperation of the GDR Economics Ministry, and the Export Promotion and Consulting Office of the GDR Chambers of Industry and Trade. Below are contact addresses and a brief description of these offices. Even after all-German elections these offices will probably continue to exist in some form and to be useful sources of information for U.S. companies. Office for Industrial Cooperation of

the GDR Economics Ministry

This office is the first contact point for businesses interested in investing or producing in the GDR. It provides foreign business representatives with basic legal and market information to facilitate cooperation with GDR industrial enterprises. It also approves in the name of the Ministry various applications including joint ventures required by current law. Address:

Ministerrat der DDR Buero fuer

industriekooperation beim

Ministerium fuer Wirtschaft

Leipziger Strasse 5-7

Berlin 1080 Telephone:

(01 1-37-2) 232-1832 or 232-5864 Telex:

1152311 Director:

Dr. Wolfgang Stamm State Trusteeship Consultation Office

The State Trusteeship (Treuhandanstalt), established to privatize some 8,000 state-owned enterprises, has opened an office to assist foreign companies interested in cooperation arrangements, capital participation, or acquisition of GDR companies; or companies interested in providing services to the trusteeship such as auditing, business, or financial consulting. Address:

Konsultationsbuero bei der

Treuhandgesellschaft der DDR

Alexanderplatz 6

1020 Berlin Telephone:

(01 1-37-2) 235-2801 or 235-5885 Contact:

Prof. Ronneburger, Director

or Herr Ullmann

Export Promotion and Consulting

Office of the GDR

Chambers of Industry and Trade

This office can provide foreign businesses with basic information about doing business in the GDR; addresses for organizations and associations; and suggestions for other business contacts. Address:

Industrie- und Handelskammer

Export-foerderungs- und Beratungs

GmbH

Schoenholzer Strasse I O/ I I

Berlin I 100 Telephone:

(011-37-2) 48220