At the German Busi­ness Angel Day in Nurem­berg at the begin­ning of Decem­ber 2016, it was announ­ced that from Janu­ary 1, 2017, the “invest­ment subs­idy 20”, which is very important for busi­ness angels, will apply. This signi­fi­cantly expands the oppor­tu­ni­ties for busi­ness angels to make their invest­ments in young tech­no­logy compa­nies. The rules will apply from Janu­ary 1, 2017 (the date of appli­ca­tion and invest­ment), as the EU Commis­sion also gave its appr­oval on Decem­ber 12.

In the future, a busi­ness angel can leverage up to 500,000 invest­ment volume through the invest­ment grant, i.e. at a 20% grant rate, he can receive up to €100,000 in grants. The spouse can claim the same amount again, if applicable. 

In addi­tion, there is also the possi­bi­lity to now make a funded invest­ment with Busi­ness Angel GmbHs with up to six members, without one having to be a majo­rity share­hol­der. The compa­nies eligi­ble for funding have been expan­ded so that inno­va­tive compa­nies, such as FinTech compa­nies and insu­rance­Tech compa­nies, will also be eligi­ble for funding in the future.

Yes, now busi­ness angels who make their invest­ment as a natu­ral person can in the future not only get an acqui­si­tion grant of 20% on their inves­ted capi­tal, but also another exit grant in case of successful sale. This amounts to 25% of the taxa­ble profit from dispo­sals of units subsi­di­zed with invest­ment grants. This is inten­ded to compen­sate for the disad­van­ta­ge­ous posi­tion of capi­tal gains for natu­ral persons (approx. 26.6% tax burden) compared to invest­ment GmbHs, which are only subject to 1.5% effec­tive tax in accordance with Sec. 8b KStG. This proce­dure repres­ents an excep­tio­nal measure. Howe­ver, it is capped at a certain amount, which makes detailed conside­ra­tion or legal advice between invest­ments in the private sphere or via an invest­ment limi­ted liabi­lity company sensi­ble. On the other hand, the new regu­la­tion now also enables private inves­tors to claim capi­tal losses, which is not possi­ble in the case of an invest­ment GmbH due to the tax exemp­tion there.