• The German government is introducing the “Future Finance Act” to facilitate investments by institutional players in startups, small businesses, and special purpose acquisition companies (SPACs).
• The act reduces the minimum market capital for initial public offerings (IPOs) from 1.25 million euros ($1.37 million) to 1 million euros ($1.1 million).
• The new rules would apply to businesses employing up to 500 people and with revenues below 100 million euros ($109 million).

German Government Introduces Future Finance Act

The German government is pushing for more welcoming regulations for startups working with financial innovation in the country, according to the newly drafted legislation of the “Future Finance Act” introduced by the finance ministry on April 5. Key goals of the legislation include capital markets digitalization through the issuance of electronic securities on a blockchain and improved portability of crypto assets.

Reducing Minimum Market Capital For Initial Public Offerings (IPOs)

According to a translated version of the draft bill, Germany’s “capital market should become more modern and efficient in order to mobilize more private capital for future investments.” Among the government’s targets is to create a favorable environment for startups and investors in the country. The legislation reduces the minimum market capital for initial public offerings (IPOs) from 1.25 million euros ($1.37 million) to 1 million euros ($1.1 million) and facilitates investments by institutional players in startups, small businesses, and special purpose acquisition companies (SPACs).

Rules Applying To Businesses

According to local media reports, the new rules would apply to businesses employing up to 500 people and with revenues below 100 million euros ($109 million). “We want to make Germany the leading location for startups and growth companies,” German finance minister Christian Lindner said in a statement. “That is why we are improving access to the capital market and making it easier to raise equity. Small and medium-sized companies will also benefit from this.”

Germany Becoming Attractive To Investors

The government claims that move would make Germany more attractive to investors and promote a culture of stock market investments. “Startups, growth companies and small and medium-sized companies should have easier accesstohe capital market,”the minister said .

Conclusion

Germany is a member of G7 group which means it can be seen as an attractive place bothforinvestorsandsmallbusinessesduetoitsfavorable environmentforfinancialinnovationandgrowthcompaniesofthecountrywhichwouldhelpinmobilizingmoreprivatecapitalforfutureinvestmentsinthecountry.