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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.
(Reporting by Christian Kraemer and Maria Martinez, Editing by
William Maclean)
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