Germany's New Startup Act: Boosting Capital Markets Before Elections

The German cabinet has approved the Second Financing for the Future Act, aimed at promoting startups and enhancing capital market access. With elections approaching, it's unclear if parliament will pass it. The act proposes tax improvements for venture capital and investment facilitation in infrastructure and renewable energies.

Germany's cabinet has given the nod to a package designed to boost startups and improve access to capital markets, according to government sources. The approval of this initiative comes with the uncertainty of parliamentary passage before the upcoming February elections.

Dubbed the Second Financing for the Future Act, the package seeks to revamp an economy marked by sluggish growth, chiefly by enhancing the tax environment for venture capital investments. Additionally, the act aims to ease investment hurdles in infrastructure and renewable energy sectors while reducing bureaucracy.

The act represents one of 49 measures within the government's broader growth strategy to fortify Germany's standing as a business hub. Despite the current minority government status, the act requires a parliamentary majority to pass. With the Free Democrats' conditional support, the law could potentially secure the necessary majority.

(With inputs from agencies.)