The German government is developing more lenient rules for financial innovation startups as part of the Future Finance Act. The new bill also envisions capital markets digitalization through the issuance of electronic securities on a blockchain.
Germany’s Federal Ministry of Finance (BMF) and the Federal Ministry of Justice (BMJ) drafted a bill that aims to attract startups offering innovative financial instruments to the country.
Thus, the Future Finance Act of the BMF envisages:
- Reducing the minimum capital for IPOs from €1.25 million to €1 million.
- Simplifying regulatory requirements for startups.
- Facilitating investments by institutional investors in startups, small and medium-sized enterprises, and special purpose acquisition companies (SPACs).
- Improving framework conditions for modern forms of transactions, such as acquisitions of special purpose vehicles (SPVs).
- Digitizing the capital market by enabling the issuance of electronic securities on a blockchain.
- Exploring improved transferability of crypto-assets.
- Introducing tax amendments to simplify access to the financial market for startups.
According to Christian Lindner, German Federal Minister of Finance, the initiative is designed to improve access to the capital market for innovative startups and thus make it easier to attract investments. In this way, the country’s authorities intend to make Germany “the leading location for startups and growth companies.”
The new rules will apply to companies with fewer than 500 employees and revenues below €100 million per year. This is reported by the local media.
Germany is recognized as the most crypto-friendly country, and the German tax policy in relation to cryptocurrency assets is one of the most loyal in the world. According to experts, the country created the best conditions for the development of the cryptocurrency industry.