• The German government has proposed the “Future Finance Act,” which seeks to promote financial innovation in startups by reducing the minimum market capital for initial public offerings (IPOs), and facilitating investments by institutional players.
• The legislation also encourages the issuance of electronic securities on a blockchain and improved portability of crypto assets.
• These new rules would apply to businesses employing up to 500 people and with revenues below 100 million euros ($109 million).
Germany Promotes Financial Innovation in Startups
The German government has proposed the “Future Finance Act,” drafted legislation that seeks to promote financial innovation in startups. Under this act, the minimum market capital for initial public offerings (IPOs) is reduced from 1.25 million euros ($1.37 million) to 1 million euros ($1.1 million) and institutional players are encouraged to invest in startups, small businesses and special purpose acquisition companies (SPACs). Additionally, the act encourages the issuance of electronic securities on a blockchain and improved portability of crypto assets.
Regulations Applying To Businesses
These new regulations would apply to businesses employing up to 500 people and with revenues below 100 million euros ($109 million). This move is intended to make Germany more attractive for investors, mobilize private capital for future investments and create a favorable environment for startups and investors in the country.
Christian Lindner’s Statement
German finance minister Christian Lindner said in a statement: “We want to make Germany the leading location for startups and growth companies…Small and medium-sized companies will also benefit from this.”
Goals Of The Legislation
The goals of this legislation include: capital markets digitalization through the issuance of electronic securities on a blockchain; improved portability of crypto assets; making it easier to raise equity; creating an environment that is more attractive for investors; mobilizing private capital for future investments; providing easier access to capital markets; and promoting a culture of stock market investments.
Conclusion
This newly drafted legislation provides opportunities for both investors and innovative entrepreneurs looking to start or grow their business in Germany. By improving access to capital markets, encouraging investment by institutional players, reducing minimum IPO requirements, issuing electronic securities on a blockchain, and providing better portability of crypto assets, it will help further develop Germany’s economy as well as its startup sector.