The German government is taking steps to create a more welcoming environment for startups working with financial innovation through the ‘Future Finance Act’.
According to a draft bill introduced by the finance ministry on April 5, the legislation aims to modernize and make the country’s capital markets more efficient, enabling them to mobilize more private capital for future investments. The new rules will apply to businesses with up to 500 employees and revenues below €100m ($109m).
The legislation will reduce the minimum market capital for initial public offerings (IPOs) from €1.25m ($1.37m) to €1m ($1.1m), and make it easier for institutional investors to invest in startups, small businesses, and special purpose acquisition companies (SPACs).
The government aims to create a favorable environment for startups and investors in the country, making Germany more attractive to investors and promoting a culture of stock market investments.
“We want to make Germany the leading location for startups and growth companies,” said German finance minister Christian Lindner 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.”
The draft bill also includes key goals such as the issuance of electronic securities on a blockchain and improved portability of crypto assets.
The bill supports the use of blockchain technology in capital markets, which will enable the issuance of electronic securities, making it easier to transfer and trade them.
The legislation also aims to improve the portability of crypto assets, making them easier to use across different platforms.
Germany is a member of the G7, a group of the world’s seven biggest democracies, which are working on tougher crypto regulations. However, the new legislation is seen as a way to balance regulation with innovation and growth.
The government’s focus on improving access to the capital market and making it easier to raise equity for startups and small businesses is a positive step towards promoting innovation in the financial sector.
The move to create a favorable environment for startups in Germany is part of a broader trend of governments recognizing the importance of startups in driving innovation and economic growth.
By reducing barriers to entry and providing support to startups, governments can encourage the development of new technologies and industries. The German government’s focus on startups and financial innovation is expected to make it a more attractive location for investors and entrepreneurs alike
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In conclusion, the Future Finance Act introduced by the German government aims to create a more welcoming environment for startups working with financial innovation.
By modernizing and making capital markets more efficient, the government aims to mobilize more private capital for future investments.
The legislation reduces barriers to entry for startups and small businesses, making it easier to access the capital market and raise equity. This move is expected to make Germany more attractive to investors and promote a culture of stock market investments, while also promoting innovation in the financial sector.