Germany Pushes to Expand Startup Incentives By End of Year

(Bloomberg) -- Germany’s ruling coalition wants legislation designed to create more attractive conditions for startups in place by the end of this year, the finance ministry said.

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The proposed law would increase the annual tax-free allowance for employee share ownership to €5,000 ($5,408) from €1,440, according to a monthly report published Friday. The government also plans to allow for shares with multiple voting rights, which can enable a founder to maintain influence after a company has gone public.

The government is currently assessing feedback from Germany’s 16 states and lobby groups and wants to approve the law in cabinet over the summer before it’s sent to parliament.

“These are good prospects for the future for many companies that want to look ahead and invest with courage and optimism,” said Steffen Saebisch, a deputy finance minister.

More broadly, the legislation seeks to simplify access to capital markets and strengthen and modernize Germany as a financial center, as well as increase transparency and remove barriers to technology in financial-market supervision, according to Saebisch.

Germany’s Startup Association has welcomed the government’s proposals, saying that they could give companies operating in Europe’s biggest economy a boost and make Germany more competitive internationally.

“Startups are at a disadvantage compared to established companies when it comes to attracting employees,” Christian Miele, the association’s chief executive officer, said last month.

Germany ranks last in a Europe-wide comparison on stock ownership programs, which weakens it as a startup location and crimps innovation, he said, adding that “improvements are therefore urgently needed.”

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