Tax Policies and Funding: Fueling Investment and Growth
The coalition’s focus on tax relief and investment incentives aims to create a more favorable environment for businesses. This includes a phased reduction of the corporate tax rate. Moreover, the introduction of a “Company with Tied Assets” legal form is designed to support businesses with a social or sustainable focus. A planned 30% degressive depreciation for equipment investments between 2025-2027 is also in the mix.
The creation of a “Germany Fund,” supported by billions of Euros in federal funds and private co-investments, is a crucial aspect. This fund aims to inject capital, especially into scale-ups and tech-driven companies. The goal? To propel innovative growth and economic advancement across Germany. This initiative could be a game-changer, stimulating venture capital investment and fostering a thriving startup ecosystem.
Streamlining Bureaucracy and Boosting Digitalization
One of the primary goals of the coalition is to simplify business registration processes. The plan for a digital “One-Stop-Shop” promises to enable company formations within 24 hours. The idea is to reduce red tape and make it easier for entrepreneurs to get started. This could significantly reduce the time and effort required to launch a business.
Further measures to cut red tape in administration and procurement are planned, alongside an acceleration law to shorten planning and construction times. Moreover, the government wants to alleviate documentation burdens, specifically targeting small and medium-sized businesses (SMEs), the trades, and startups. In the trades sector, there’s also a focus on supporting generational transitions.
The expansion of broadband and 5G networks is a key priority. Faster internet access, particularly in rural areas, will be facilitated through a mobile communications and broadband acceleration law. Furthermore, Germany aims to become a leading hub for future technologies, with significant investments in digital infrastructure, including sovereign cloud and AI infrastructure.
Electromobility: Incentives for Businesses and Freelancers
The coalition’s commitment to electromobility includes expanding tax incentives for company cars. The 0.25% rule for private use will apply to vehicles with a list price up to €100,000. Simultaneously, a special depreciation allowance is being introduced for commercially used electric vehicles.
Moreover, a new incentive program, known as “Social Leasing,” is planned for lower and middle incomes. This provides a way for individuals, like freelancers, to access electric vehicles. This initiative will be complemented by expanding charging infrastructure, especially for commercial depot charging, and extending vehicle tax exemption until 2035.
Did you know? The German government is also focused on developing a national hydrogen strategy, which could further accelerate the adoption of electric vehicles and sustainable transportation solutions.
Social Security and Retirement: Supporting Freelancers and Workers
Freelancers who are not already part of a mandatory pension scheme will be required to contribute to the state pension system. Alternative retirement plans, offering reliable coverage, will remain an option. The goal is to strengthen retirement security and prevent old-age poverty among freelancers.
To incentivize older workers to remain in the workforce, the “Active Pension” will be introduced. Starting January 1, 2026, those who have reached the legal retirement age and choose to continue working can earn up to €2,000 tax-free per month. This will be applicable to employees and freelancers.
Though a unified pension scheme for all workers, including civil servants and members of parliament, is under discussion, it was not included in the coalition agreement. The debate is ongoing in a pension commission.
Labor Law and Social Security: Adapting to a Changing Landscape
The government’s plan focuses on the future of the minimum wage, with the commission considering collective bargaining and 60% of the gross median wage. The aim is a minimum wage of €15 per hour by 2026.
Digital procedures will replace paper-based processes where possible, including the signing of fixed-term employment contracts. The requirement for written form in labor law will be abolished.
To address the skills shortage, work visas and recognition of qualifications will be expedited. The government will also establish a “Work and Stay” program to help graduates from German universities stay to start a business or find employment (skills shortage mitigation).
The coalition aims to establish legal certainty for freelancers and their clients. This will involve a fundamental reform of the status determination process, which determines whether someone is self-employed or effectively an employee. The goal is to prevent false self-employment without unsettling genuine entrepreneurs.
For the first time, there will be maternity protection for freelancers. The coalition intends to introduce similar protection periods around childbirth for self-employed women as for employees. In terms of parental allowance, freelancers will also receive better treatment: The calculation basis for parental allowance for freelancers will be made more flexible, so that irregular incomes or profit phases can be better taken into account. This is intended to ensure that self-employed parents receive a fairer parental allowance.
Innovation and Technology: Driving Future Growth
The coalition agreement emphasizes the promotion of key technologies such as AI, biotechnology, and space travel. The government will play a greater role as a primary customer for the digital economy. Specific funding programs for female founders are also planned to increase diversity in the startup scene.
To foster innovation, the tax credit for research and development will be improved. The funding percentage and maximum assessment basis will be significantly increased, and the application process simplified. The new funding initiatives will likely boost Germany’s competitiveness in key sectors, such as AI, and biotechnology.
The transfer of research into practice will also be strengthened. Universities will receive additional funds to promote spin-offs, and the EXIST program will be continued and expanded. Regional innovation clusters will be further developed and promoted. The new Investment Fund II will have a strong focus on spin-offs in the deep-tech and biotech areas.
Cash Register and Receipt Regulations
The existing receipt requirement will be abolished from January 1, 2027. This requires retailers to provide a receipt for every sale, even if the customer doesn’t ask for one. The aim is to reduce bureaucracy, especially for smaller businesses.
At the same time, businesses with an annual turnover exceeding €100,000 will be required to use registered cash registers to ensure the digital recording of sales. This regulation aims to strengthen financial transparency and tax compliance.
Pro tip: Businesses should proactively assess how the new regulations affect them. Preparing for changes, such as adopting digital processes and exploring available funding options, will be key to success.
A Look Ahead: Seizing Opportunities and Awaiting Implementation
The 2025 coalition agreement outlines many measures that could strengthen Germany as a place to start a business. Simplifications in the founding process and financial support initiatives offer opportunities for startups and freelancers. Important steps are planned in key areas like mobility, digitalization, and retirement provision. However, it remains to be seen how quickly and effectively the implementation will occur.
Those looking to benefit from funding now can find a comprehensive overview of current funding opportunities on our site.
In the “Besser gründen”-Podcast, Für-Gründer editor-in-chief René Klein provides a more detailed look at the Merz government’s plans. He also explains what is much more helpful for freelancers and founders than hoping for politics.
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