The German Startups Association (Bundesverband Deutsche Startups eV) welcomes the economic stimulus and investment program approved by the coalition committee of the grand coalition, particularly because it includes a reform of employee participation.
The German government's economic stimulus package not only includes a temporary reduction in VAT and a bonus for the purchase of electric cars – startups can also look forward to several changes. These include improvements to the framework for employee share ownership, the tax-deductible research allowance, and simplifications in public procurement and insolvency law. According to the Startup Association, these will help the German startup ecosystem emerge stronger from the coronavirus crisis in the long term and be able to seize the opportunities offered by digital transformation.
Changes to employee participation
The startup association has placed the improvement of the framework conditions for employee participation at the top of its political agenda as the most important issue at the moment. Christian Miele, President of the Startup Association, in addition:
"If we want to emerge from the crisis with a bang, as Olaf Scholz put it, then Germany's attractiveness as a business location for international talent plays a key role. Only if we can retain domestic talent in the country and attract international talent will we be able to keep pace with key future technologies and create global tech champions. However, this requires a fundamental improvement in the framework conditions for employee share ownership. A mere increase in the tax-free allowance for employee share ownership, as announced by the coalition committee in November 2019, would fail to meet the needs of startups. Therefore, the precise design is crucial here as well. Startup-specific measures are needed. The Startup Association will contribute further proposals in this regard to the upcoming implementation process."
The approved expansion of the tax incentive for research will also open up innovation potential, Miele continued. And the president of the Startup Association explained that the planned simplifications and reduction of bureaucracy in procurement procedures, as well as the shortening of the debt relief process for natural persons to three years, will also particularly benefit founders and startups after insolvency.
The coalition resolution also commits to strengthening Germany as a location for investments in future-oriented, growth-oriented companies. The Startup Association welcomes this commitment and, in this context, once again underlines the importance of the rapid establishment of the planned "Future Fund," which is intended, in particular, to mobilize capital from private institutional investors for the venture capital market. The Future Fund will also gain dramatically in importance due to the planned tightening of foreign trade law, according to the association: If access to capital from third countries becomes significantly more difficult for domestic startups, domestic sources of financing will become even more important for financing innovation and growth in Germany.
