The two sides will need many years to complete a comprehensive deal on trade and investments before the March 29, 2019, deadline mandated in EU law, BDI Managing Director Joachim Lang told Reuters.
"The threat of a very hard Brexit remains high," Lang said. "Our companies are preparing for all scenarios. Anything else would be naive."
Lang will be part of a delegation of European business leaders who will meet British Prime Minister Theresa May in London on Monday. May will reiterate her desire for a two-year Brexit implementation period, her office said.
Lang said that the unclear outlines of the future shape and the timeline of a deal were creating uncertainty for businesses.
"It will be impossible to negotiate, agree and ratify a comprehensive deal on the future relationship that encompasses trade, investments and economic ties by March 30, 2019," Lang said. "This process will last years."
The BDI said last month German firms active in Britain should make provisions for the scenario of Britain leaving the EU without an agreement, known as a hard Brexit, because the British government does not know what it wants.
(Reporting by Gernot Heller; Writing by Joseph Nasr; Editing by Peter Graff)