BERLIN (Reuters) – Germany’s lower house of parliament on Friday passed the Financing for the Future Act, to promote start-ups and improve access to capital markets.
The objective of this law is to make Germany more attractive for entrepreneurs and to help drive the economy of Europe’s industrial powerhouse.
In the future, companies will be allowed to go public with a minimum market capitalization of one million euros instead of the previous 1.25 million. In addition, an underwriter such as a bank is no longer required.
“Global technology leaders must not only grow up in Silicon Valley, they must also have a home here,” Germany’s Finance Minister Christian Lindner said.
The law includes tax allowances for shareholders in a bid to encourage more startups. According to earlier statements by the government, the law will lead to annual tax revenue losses of almost one billion euros from 2026.
New companies struggle to retain workers and share ownership is seen as a good option to attract talent when they are not able to offer high salaries.
The Future of Financing Act increases the tax allowance for employee share ownership to 2,000 euros from 1,440 euros.
“This will make employee participation in the company much more attractive for start-ups,” said Lennard Oehl, member of parliament of the SPD party.
Germany’s lower house of parliament also passed on Friday a multibillion-dollar tax relief package for small and medium-sized companies, aimed at unleashing new investment amid weak foreign demand and high interest rates.
The package, called the Growth Opportunities Act, provides for tax relief of around 7 billion euros ($7.6 billion) a year from 2024, and a total of over 32 billion euros until 2028.
