Written by: Marcus Wolter, Bianca Lindau, and Crystel Saraie

On April 9, 2025, the German Christian Democrats (CDU) and Social Democrats (SPD) finalized a coalition agreement after the snap elections in February. This agreement outlines a comprehensive set of policies aimed at stimulating economic growth, enhancing competitiveness, and trying to address pressing global issues such as trade tensions and climate change. Here, we delve into the key aspects of the agreement and their implications for founders, investors, and the tech sector as a whole, ranging from changes to corporate and intellectual property (IP) law to implications for M&A and venture capital investments.

Corporate Law and M&A

1. Administrative Streamlining: The coalition plans to introduce administrative streamlining acts to reduce regulatory burdens and enhance legal certainty. This includes measures like repealing the German Supply Chain Act (Lieferkettengesetz) and implementation of the EU Corporate Sustainability Due Diligence Directive to reduce bureaucratic burdens, reduction of the eight percent of jobs in the federal administration over four years, with an exception for security authorities.
2. Reform of Stock Corporation Law: The right to challenge resolutions under stock corporation law will be reformed to boost legal certainty and limit opportunities for abuse, making Germany a more attractive business location [1].
3. M&A Regulations: While the agreement does not directly alter M&A regulations, Germany’s foreign direct investment (FDI) control framework is being revised. This includes a new Investment Screening Act aimed at ensuring equal treatment for shareholders and expanding coverage to intellectual property licensing [2].

Intellectual Property (IP)

While specific IP reforms are not detailed in the coalition agreement, the emphasis on innovation and digitalization suggests a supportive environment for IP development:

1. Innovation and Digitalization: The government’s focus on fostering innovation through real-world laboratories and experimental clauses in laws could indirectly support IP creation and protection. This approach may encourage the development of new technologies and business models, potentially leading to increased IP filings and a more dynamic IP landscape in Germany.
2. Digital Ministry: Plans for a new digital ministry could lead to more streamlined processes for IP-related administrative tasks [3]. The coalition aims to further digitally interconnect the administrative branch. Measures could include digitalizing patent and trademark applications, improving data exchange between relevant authorities, and enhancing cybersecurity measures to protect IP assets. This will increase efficiency, internal communication and the effectiveness of the administration. Overall, this digitalization should simplify and make access to government services more attractive for individuals and companies.

Founders and Start-Ups

1. Simplification of Founding Processes: The coalition agreement recognizes the relevance of startups as the hidden champions and DAX companies of tomorrow [4]. It aims to reduce bureaucracy for start-ups by simplifying notarial procedures and digital certification processes. This includes enabling automatic data exchange between relevant offices to facilitate quick company establishment [1].Plans are further underway to minimize the existing bureaucratic burden for start-ups, aiming to establish a comprehensive one-stop shop for all administrative procedures, allowing companies to be set up within 24 hours [1] [4].
2. Government funding: Further, the creation of the “Deutschlandfonds” and the continuation of the “Zukunftsfonds” address and highlight the issue that many startups face limited funding options and thereby also addresses the need for venture capital.

Investors

1. Tax Incentives: The agreement introduces an “investment booster” in the form of a depreciation allowance for investments in equipment, which could attract more investors by enhancing returns on investment [3].
2. Corporate Tax Reductions: The corporate tax rate is set to decrease from 15% to 10% in five steps starting from 2028, making Germany more competitive for investors [3].

Tech Sector

1. Innovation and Digitalization: The coalition views some key goals in the state becoming an important customer of the digital economy, promoting the transfer of technology from universities to businesses and further strengthening key digital technologies such as AI, quantum and robotics [4]. The coalition emphasizes innovation through experimental clauses and real-world laboratories, which can foster advancements in the tech sector [1]. For example, the agreement suggests enabling real-world use of drones in agriculture and strengthening the Al movement through innovation-friendly regulation [4].
2. Digitalization Enforcement: The federal government plans to take on more responsibility for digitalization, necessitating amendments to the Basic Law. This could lead to increased investment in digital infrastructure and technologies [1].

Conclusion

The new German coalition agreement sets the stage for significant changes in corporate law, M&A, and the tech sector. While it does not directly address IP reforms, the focus on innovation and competitiveness suggests a supportive environment for technological advancements. Founders and investors can expect a more streamlined regulatory environment and attractive tax incentives. As the agreement is implemented, it will be crucial to monitor how these policies evolve and impact the business landscape in Germany.

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[1] Germany’s future coalition government: What has been agreed? Reuters. (2025, April 9). https://www.reuters.com/world/europe/key-issues-agreed-by-germanys-future-coalition-government-2025-04-09/

[2] Gotsche, H., Mann, C., & Kubalek, N. (2025, March 11). M&A Guide 2025: Germany. IFLR. https://www.iflr.com/article/2eis39s1hh6av7hdnofls/sponsored/m-a-guide-2025-germany

[3] Partington, M. (2025, April 10). German tech leaders cautiously optimistic about New Coalition Agreement’s startup measures: “a good starting point, but we need action.” Sifted. https://sifted.eu/articles/new-coalition-agreement-startup-measures

[4] Breitlinger, D. (2025, April 10). Koalitionsvertrag 2025: Was die neue regierung für startups plant. Bitkom e. V. https://www.bitkom.org/Themen/Startups-Scaleups/Koalitionsvertrag-2025-Was-die-neue-Regierung-fuer-Startups-plant