This content is relevant for:Coronavirus / Incentives
Business Location Germany
The country’s economy is in a strong position to introduce measures supporting the economy over a prolonged period. By providing businesses with sufficient liquidity, the government measures have helped ensure that enterprises emerge from the crisis intact.
In June 2020, the German federal government agreed on an economic stimulus package worth EUR 130 billion. The program ("Future Package") includes a number of measures to foster economic growth and investment in Germany.
Foreign investors wishing to invest in Germany can benefit in particular from funding in the areas of mobility, medical devices, CO2 reduction, digitalization, and artificial intelligence.
All measures will improve the general environment for companies, ensuring Germany remains highly attractive to foreign investors.
The German government pledged EUR 1.7 trillion to companies of all sizes - from self-employed persons to large companies - and other public measures to tackle the coronavirus crisis. The money has been spread across a wide range of financial instruments including guarantees, short-term liquidity loans, short-term grants, salary coverage for working-hours reductions, short-term tax relief, and stocking up of public venture capital support funds and consortial financing support for larger projects.
The most important short-term instruments were support for working-hours reductions (EUR 10 billion) which has enabled companies to retain employees and liquidity grants enabling businesses whose revenues were impacted to stay afloat.
As the pandemic slowly subsides, the most important support is now the EUR 1.1 trillion committed to a wide variety of loans, liquidity grants, financing programs, and guarantees. These measures keep businesses liquid in the short-to-medium term, as well as encouraging further research and development and enabling business with longer product development cycles to continue working towards market maturity. Small to medium-sized companies are still eligible for liquidity aid grants up to 90 per cent of fixed costs (depending on assessed decline in revenue) up to September 30, 2021.
A detailed overview of the available and comprehensive pandemic crisis support programs is available on the dedicated website of the Federal Ministry of Finance.
The Federal Employment Agency pays the short-time allowance as partial compensation for a loss of earnings caused by a temporary cut in working hours. This reduces the costs faced by employers in the context of employing workers, and enables companies to continue to employ their workforce even in the event of a loss of orders. In other words, short-time allowances help to prevent dismissals and/or redundancies.
Short-time allowances schemes can currently be granted on a more flexible basis for a limited period until December 31, 2021. For instance, companies are eligible to apply, if 10 percent of the employees are effected by shorter working hours. Moreover, social security contributions which have to be paid solely by employers for employees working short-time are reimbursed in full until the end of December 2021.You can find this fragment in the following contexts: