Incentives at a Glance

Germany offers numerous incentives to all investors - regardless of whether they are from Germany or not.

Funds are provided by the German government, the individual federal states, and the European Union (EU). These are predominantly aimed at new investments geared towards fostering economic growth.

Germany has EUR 26.3 billion funding provided by the EU (co-financed using means obtained from German national and regional budgets) at its disposal until 2013. In addition, Germany and its individual states make their own incentives funds available.

There are a number of incentives programs available which can be grouped into two overall packages:

• the investment incentives package with different measures to reimburse investment costs
• the operational incentives package to subsidize expenditures after the investment has been settled

Each package consists of a different number of programs, ranging from cash incentives for the reimbursement of capital expenditures to incentives for research and development (R&D).

Each incentives program defines industries as well as forms of investments (e.g. greenfield projects or expansions) eligible for funding. Foreign investors are subject to exactly the same conditions available to German investors.

Each program has a set of criteria (such as company size, planned investment project location, etc.) which determine individual investment project incentive levels.

Company size is generally determined according to an EU-wide classification system in which companies are categorized as being small, medium-sized or large according to their staff headcount, annual turnover or annual balance sheet total.

The size of a company is an important criteria to determine the possible incentives level a company may receive. Most incentives programs offer the highest incentives rates to small and medium-sized enterprises (SMEs). Some programs may even specifically target SMEs (this is very often the case with R&D programs).

The criterion concerning the headcount is compulsory. In addition, either of the annual turnover or the balance sheet criteria must also apply. Please refer to the explanation of the European Commission for more information.

For more information on EU framework conditions, please refer to the following site: