Germany's Startup Boost: Second Financing for the Future Act

The German cabinet has approved a financial measure package to boost startups and ease access to capital markets. Known as the Second Financing for the Future Act, it aims to improve tax conditions and reduce investment obstacles. Its fate depends on parliamentary approval amid upcoming elections.

The German cabinet has taken a proactive step by approving a crucial package of measures designed to stimulate startups and simplify access to capital markets. This initiative, termed the Second Financing for the Future Act, aims to enhance the tax framework, thus promoting venture capital investments while simultaneously alleviating bureaucracy and boosting investment potential in infrastructure and renewable energies.

According to a draft accessed by Reuters, the act proposes annual tax reliefs for companies totaling 45 million euros, equating to approximately $47.37 million. However, the enactment of this law hinges on it gaining majority support in both houses of parliament before the scheduled February elections, a challenge for the current minority government.

The brainchild of Christian Lindner, ex-finance minister and leader of the Free Democrats, the act could see his party's backing despite his firing by Chancellor Olaf Scholz. The act forms part of a broader 49-measure growth initiative focusing on solidifying Germany as a prime business hub to combat stagnant economic growth.

(With inputs from agencies.)