Germany’s lower house of parliament has given the green light to the Financing for the Future Act, and it’s a big deal! The aim of this law is to make Germany more appealing to entrepreneurs and give a boost to the economy of Europe’s industrial powerhouse. The new law will allow companies to go public with a minimum market capitalization of one million euros, down from the previous 1.25 million. Plus, they won’t need an underwriter like a bank anymore.
Germany’s Finance Minister Christian Lindner said, “We don’t want all the tech giants to only come from Silicon Valley; we want them to have a home here too.” The law also includes tax breaks for shareholders to encourage more startups, but it’s expected to lead to annual tax revenue losses of almost one billion euros from 2026.
The act also aims to make it easier for new companies to retain workers by offering share ownership as an attractive option to attract talent when they can’t afford high salaries. To sweeten the deal, the tax allowance for employee share ownership is being increased to 2,000 euros from 1,440 euros. This is great news for start-ups and their employees!
But wait, there’s more! The lower house of parliament also approved a multibillion-dollar tax relief package for small and medium-sized companies. The Growth Opportunities Act will provide tax relief of around 7 billion euros a year from 2024, and a total of over 32 billion euros until 2028. This is a huge step to unleash new investment, especially in the face of weak foreign demand and high interest rates.
It’s clear that Germany is making big moves to support its businesses and entrepreneurs, and it’s exciting to see the potential impact of these new laws. With these changes, Germany is definitely aiming to become a hotspot for innovation and growth in the business world.
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