Extended support for business angels
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.