BERLIN, Nov 17 (Reuters) – Germany’s lower house of parliament on Friday passed the Funding for the Future Act, which aims to boost entrepreneurship and improve access to capital markets.
The purpose of this law is to make Germany more attractive to entrepreneurs and boost the economy of Europe’s industrial powerhouse.
In the future, companies will be able to list with a minimum market capitalization of 1 million euros instead of the previous 1.25 million euros. It also eliminates the need for underwriters such as banks.
“Global technology leaders must not only grow up in Silicon Valley, but also have a base here,” said German Finance Minister Christian Lindner.
The law includes tax breaks for shareholders to encourage more startups. Previous government statements said the law would result in around 1 billion euros in lost tax revenue per year from 2026.
When start-ups struggle to retain employees and cannot offer high salaries, shared ownership is seen as a good option to attract talent.
The Financial Future Act increases the tax deduction for employee stock ownership from €1,440 to €2,000.
“This will make it even more attractive for start-ups to have their employees join the company,” said SPD MP Leonard Orr.
Germany’s parliament also passed a multibillion-dollar tax cut for small and medium-sized businesses on Friday, aimed at spurring new investment amid weak external demand and high interest rates.
The package, known as the Growth and Opportunity Act, provides for tax cuts of about 7 billion euros ($7.6 billion) a year from 2024, totaling more than 32 billion euros through 2028. (Reporting by Christian Kramer and Maria Martinez; Editing by William MacLean)