General legal changes for startups in 2025 can also be found in this post. The second part of this post can be found here. The third part of the post can be found here. The last part can be found here. Please note that this is a general overview. It is difficult to say what will actually be introduced in the end. The posts should therefore serve as a suggestion for your own research.
Introduction of a digital bonus for start-ups
From 2025, the German government will introduce a so-called “digital bonus” to support start-ups in the digitalization of their business processes. Investments in digital technologies such as cloud solutions, AI software and IT security measures are eligible for funding.
How does the digital bonus work?
Start-ups can apply for grants of up to 50% of their investment costs – up to a maximum of 50,000 euros per project. The funding is aimed at companies with fewer than 250 employees and a maximum annual turnover of 50 million euros.
Practical tip:
Use the digital bonus specifically for projects such as the introduction of new accounting software or the expansion of your IT infrastructure. Find out about the funding conditions early on and submit your application in full – funding is often limited.
Introduction of a sustainability report for larger companies
From the 2025 financial year, larger companies will be obliged to prepare and disclose a sustainability report. This regulation initially only applies to capital market-oriented companies with more than 250 employees and a balance sheet total of more than 20 million euros or a turnover of more than 40 million euros.
What content must the report contain?
The report must contain information on environmental, social and governance (ESG) issues – such as the company’s CO₂ emissions or the diversity of the management team. The aim is to create transparency about sustainable business practices and enable investors and customers to make informed decisions.
Practical tip:
Even if your startup is not directly affected: Sustainability is increasingly becoming a competitive factor. You should therefore consider at an early stage how you can make your business processes more sustainable – this can give you long-term advantages with customers and investors.
Introduction of the Supply Chain Due Diligence Act for smaller companies
From 2025, the Supply Chain Due Diligence Act (LkSG), which previously only applied to companies with more than 3,000 employees, will be extended to smaller companies. Companies with more than 1,000 employees will then have to ensure that their supply chains comply with international human rights and environmental standards. This regulation primarily affects manufacturing companies, but also service providers that rely on international suppliers.
What does that mean in concrete terms?
Affected companies must carry out risk analyses to identify potential violations in their supply chain. This also includes the obligation to develop action plans and report regularly on compliance with the standards. Violations can result in high fines and reputational damage. Smaller companies that are not directly covered by the law may also be affected if they are part of the supply chain of a larger company. They could be required by their business partners to provide evidence of compliance with standards.
Practical tip:
Even if your startup is not directly affected, you should analyze your supply chains and ensure that your suppliers comply with human rights and environmental standards. Document your efforts carefully and check possible certifications for sustainability and compliance.
Introduction of the EU product passport system
The EU product passport system will be gradually introduced from 2025. The aim of this system is to create transparency regarding the origin, composition and recyclability of products. The product passport is provided digitally and contains detailed information about the entire life cycle of a product.
Which sectors are affected?
The system will initially affect sectors with a high environmental impact, such as electronics, textiles and construction products. The product passport is intended to help promote sustainable consumption and support companies in complying with EU regulations on the circular economy.
What advantages does the system offer?
Companies can use the product passport to document their sustainability efforts and position themselves as responsible towards customers and business partners. At the same time, the passport facilitates access to funding programs or public tenders in which sustainability criteria play a role.
Practical tip:
If your startup is active in an affected industry, you should check at an early stage which data is required for the product passport and how this can be recorded. Use digital tools to document your production processes and find out about possible funding for sustainable innovations.
Introduction of AI regulations through the EU AI Act
The first stage of the EU AI Act (Artificial Intelligence Act) will come into force on February 2, 2025. The aim of this regulation is to regulate the use of artificial intelligence (AI) in the EU and minimize risks for consumers and companies. High-risk AI systems in particular are affected – such as those for biometric identification or automated decision-making in sensitive areas such as health or finance.
What are the requirements?
Companies must ensure that their AI systems are transparent and do not deliver discriminatory results. They must also carry out regular risk analyses and have their systems certified. Violations of the requirements can be punished with high fines – up to 6% of annual global turnover.
Practical tip:
If your startup uses or develops AI technologies, you should have a risk analysis carried out at an early stage and check whether your systems comply with the new requirements. Consult external experts to certify your processes and minimize legal risks.
Introduction of a digital reporting system for working hours
From 2025, a digital reporting system for working hours will be introduced, which will oblige all employers to record their employees’ working hours electronically. This regulation follows a ruling by the European Court of Justice (ECJ), which requires complete documentation of working hours.
What does this mean for employers?
In future, employers must ensure that all working hours – including overtime – are recorded digitally. This also applies to flexible working models such as home office or remote working. The new regulation is intended to help prevent breaches of working time legislation and better protect employees from overwork.
Practical tip:
Implement a digital time recording system in good time and train your employees in how to use it. Check existing working time regulations for conformity with the new requirements and adapt them if necessary.
Introduction of the EU VAT package 2025
From 2025, the new EU VAT package will come into force, which aims to simplify cross-border trade within the EU and at the same time reduce fraud in the VAT system. The changes will primarily affect B2B trade and e-commerce. A key component is the introduction of a new system for reporting VAT data in real time.
What will change in concrete terms?
In future, companies that make cross-border deliveries within the EU will have to report their sales in a standardized digital portal. This system replaces the previous recapitulative statement (ZM) and enables direct verification by the tax authorities of the countries involved. The aim is to reduce the administrative burden and increase transparency in EU-wide trade, and the One-Stop-Shop (OSS) procedure will be expanded so that companies can process more tax obligations centrally via a single platform. This applies in particular to services and digital products that are sold to customers in other EU countries.
Practical tip:
If your startup operates across borders, you should adapt your accounting and tax systems to the new requirements in good time. Use the extended possibilities of the OSS procedure to manage your tax obligations efficiently. Seek support from a tax advisor to ensure that all declarations are made correctly and on time.
Introduction of a digital business register
From mid-2025, a central digital company register will be introduced that will bundle all relevant information about companies in Germany. The aim is to increase transparency and facilitate access to company data for authorities, investors and business partners.
What information is recorded?
The register contains details such as the company name, legal form, registered office and information on managing directors or board members. In addition, information on beneficial ownership is integrated in order to combat money laundering and tax evasion more effectively.
What advantages does the register offer?
Companies only have to enter their data once, which reduces bureaucracy. At the same time, investors or business partners can access relevant information more quickly, which makes business relationships easier.
Practical tip:
Ensure that all company data is correct and complete. Use the register strategically to increase your visibility with potential investors or partners.
Introduction of a sustainability label for SMEs
From 2025, a voluntary sustainability label will be introduced for small and medium-sized enterprises (SMEs). This label is intended to recognize companies that take special measures in the area of environmental and climate protection or assume social responsibility.
How does the label work?
Companies can apply for the label by documenting their sustainability measures and having them audited by an independent body. The criteria include CO₂ reduction, fair working conditions and the use of sustainable materials.
What advantages does the label offer?
The sustainability label strengthens a company’s reputation and can be used as a competitive advantage – for example in public tenders or in marketing to environmentally conscious customers. In addition, companies with the label often benefit from funding programs or tax relief.
Practical tip:
Check your business processes for sustainability potential and carefully document the corresponding measures. Consult external consultants to prepare your application for the label in the best possible way.
Introduction of an EU-wide digital identity system
From 2025, an EU-wide digital identity system will be introduced that will enable citizens and companies to identify themselves securely and easily online. This system is based on the so-called “European Digital Identity Wallet” and is intended to facilitate cross-border transactions and access to public and private services.
What does this mean for companies?
Companies can use digital identity to simplify their processes – for example when verifying the identity of customers or business partners. Digital identity can also speed up the conclusion of contracts that previously required a physical signature. The system offers considerable advantages for start-ups in the fintech, e-commerce or digital services sectors, as it facilitates access to international markets.
What are the advantages of the system?
The digital identity system creates more security for online transactions and reduces the administrative burden for companies. At the same time, it strengthens the trust of customers and business partners in digital business models.
Practical tip:
Check how you can integrate the European Digital Identity Wallet into your business processes. Find out about the technical requirements and possible funding programs for implementing the system.
Introduction of a new funding program for green start-ups
From 2025, the German government will launch a new funding program specifically aimed at green start-ups. The aim is to support innovative business models in the areas of sustainability, climate protection and the circular economy. The program offers grants of up to 500,000 euros per project as well as low-cost loans for investments in sustainable technologies.
Which startups are eligible for funding?
Funding is available for start-ups from all sectors that make a measurable contribution to environmental or climate protection – for example by reducing CO₂, conserving resources or developing sustainable products. A convincing business plan and proof of the feasibility of the project are required.
What advantages does the program offer?
In addition to financial support, funded start-ups benefit from an extensive network of mentors, investors and potential business partners. They also gain access to exclusive events and training courses in the areas of sustainability and corporate management.
Practical tip:
If your startup is active in the field of sustainability, prepare your business plan carefully and document your measures to achieve environmental goals. Submit your application early, as funding is often limited.
Extension of tax incentives for further training
Tax incentives for further training measures will be significantly expanded from 2025: In future, companies will be able to claim up to 50% of the costs of continuing professional development for their employees against tax (previously: 30%). In addition, digital training opportunities such as online courses or e-learning platforms will also be given greater consideration.
What are the advantages?
The new regulation makes it easier for companies to invest in the training of their employees and reduce their tax burden at the same time. For start-ups with a limited budget, this offers an opportunity to retain skilled workers in the long term and to develop their skills in a targeted manner.
Practical tip:
Use the extended funding opportunities specifically for the further training of your employees – for example in the area of digitalization or project management. Document all costs carefully so that you can claim them on your tax return.
Introduction of a digital reporting system for environmental regulations
From 2025, a digital reporting system for environmental regulations will be introduced, obliging companies to provide electronic evidence of their compliance with environmental regulations. This system will primarily affect companies in the areas of production, logistics and construction as well as start-ups with environmentally relevant business models.
What are the requirements?
Companies must regularly prepare reports on their energy consumption, CO₂ emissions or the use of hazardous substances and submit these digitally to the relevant authorities. The aim is to improve the monitoring of environmental regulations and identify breaches more quickly.
Practical tip:
Review your existing environmental compliance processes and implement a digital system to capture relevant data. Bring in external consultants to ensure that your reports comply with legal requirements.
Introduction of a new start-up grant for digital start-ups
From 2025, a special start-up grant for digital start-ups will be introduced, aimed at promoting innovative business models in the field of technology and digitalization. The aim is to strengthen Germany’s competitiveness as a location for digital innovations and make it easier for founders to become self-employed.
What does the grant cover?
The new start-up grant offers financial support of up to 50,000 euros for the first two years after the start-up. In addition to financial support, start-ups benefit from an accompanying mentoring program as well as access to networks and investors. Eligible projects include those in the fields of artificial intelligence, blockchain, IT security and platform economy.
Who can apply for the grant?
The grant is aimed at founders who have founded a digital startup within the last twelve months or are about to do so. A convincing business plan and a clear focus on innovative technologies are required.
Practical tip:
If you are planning to found a digital startup, prepare your business plan carefully and place particular emphasis on presenting the innovation potential of your project. Find out about the application deadlines and funding conditions early on so that you don’t miss out on any opportunities.
Introduction of a digital reporting system for social security contributions
A new digital reporting system for social security contributions will be introduced from 2025. The aim is to simplify the processing of contribution payments to health insurance funds, pension funds and unemployment insurance schemes and make it more transparent.
What will change in concrete terms?
In future, companies will have to transmit all relevant data on social security contributions digitally to a central platform. This applies to both regular payments and special notifications such as back payments or corrections. The system is intended to minimize billing errors and reduce the administrative burden.
What advantages does the system offer?
The digital reporting system facilitates cooperation between companies and social insurance institutions and ensures faster processing of contribution notifications. At the same time, it increases legal certainty for employers, as all data is recorded and checked centrally.
Practical tip:
Review your payroll processes and ensure that your accounting software is compatible with the new reporting system. Train your employees in how to use the system to avoid errors when transferring data.
Introduction of a new funding program for sustainable mobility
From 2025, the German government is launching a funding program to support sustainable mobility concepts in companies. The aim is to promote the use of electric vehicles, bicycles and other environmentally friendly means of transport.
Which measures are supported?
The program includes grants for the purchase of electric vehicles or cargo bikes as well as for the expansion of company charging infrastructure. Investments in mobility management software or incentives for employees to switch to public transport are also eligible for funding.
What advantages does the program offer?
Companies can not only improve their carbon footprint through sustainable mobility concepts, but also save costs – for example through lower operating costs for electric vehicles or tax benefits when employees use bicycles.
Practical tip:
Review your existing mobility concepts and develop strategies to promote sustainable means of transportation in your company. Find out about possible funding programs at federal or state level and use these specifically to finance your measures.
Introduction of a digital reporting system for supply chains
From 2025, a digital reporting system for supply chains will be introduced that obliges companies to provide electronic evidence of their compliance with social and environmental standards. This system supplements the Supply Chain Compliance Act (LkSG) and is intended to increase transparency in global supply chains.
What are the requirements?
Companies must regularly prepare reports on their supply chains and submit them digitally to a central platform. This includes information on suppliers, production conditions and measures to prevent human rights violations or environmental pollution.
What advantages does the system offer?
The digital reporting system facilitates the monitoring of supply chain standards and reduces the bureaucratic burden of reporting. At the same time, it strengthens the trust of customers and business partners in sustainable business models.
Practical tip:
Review your existing supply chain compliance processes and implement a digital system to capture relevant data. Bring in external consultants to ensure that your reports comply with legal requirements.
Introduction of an EU-wide carbon border adjustment mechanism (CBAM)
From 2025, the EU-wide Carbon Border Adjustment Mechanism (CBAM) will be fully introduced. This system affects companies that import certain goods such as steel, aluminium, cement or fertilizers from non-EU countries. The aim of the CBAM is to avoid competitive disadvantages for European companies that are already subject to stricter climate protection requirements.
What does this mean for companies?
In future, importers will have to prove the CO₂ emissions of imported products and purchase corresponding certificates. These certificates reflect the costs that European companies have to bear as part of emissions trading. Companies without proof of their suppliers’ CO₂ emissions automatically pay higher fees.CBAM not only affects large industrial groups, but also smaller companies that import primary products from affected sectors. It is therefore essential to analyze supply chains in detail and plan for possible additional costs at an early stage.
Practical tip:
If your startup or company uses imported goods from the affected sectors, check your supply chains for CO₂ emissions and possible additional costs. Work closely with your suppliers to create transparency about their production processes. Consider support programs to reduce your own carbon footprint.
Introduction of a digital sustainability report for SMEs
From 2025, a digital sustainability report will be introduced for small and medium-sized enterprises (SMEs). The aim is to increase transparency regarding environmental and social measures while reducing bureaucracy through digital processes.
What content must the report contain?
The report includes information on environmental protection measures, energy consumption, social standards and diversity within the company. Reporting takes place via a central digital portal provided by the responsible authorities. Companies can voluntarily provide additional information to highlight their sustainability efforts.
What advantages does the report offer?
A digital sustainability report enables SMEs to make their sustainability efforts visible and position themselves as a responsible company towards customers and business partners. At the same time, it facilitates access to funding programs or public tenders with sustainability criteria.
Practical tip:
Prepare for the creation of a digital sustainability report at an early stage by documenting your environmental and social measures. Use the report specifically as a marketing tool to position your brand as sustainable and innovative.
Introduction of a new funding program for the circular economy
From 2025, the German government is launching a funding program to support projects in the circular economy. The aim is to promote innovative business models that focus on resource conservation and recycling.
Which measures are supported?
The programme includes grants for the development of new recycling technologies, the optimization of production processes and the introduction of take-back systems for products. Investments in research and development in the field of material efficiency are also eligible for funding.
What advantages does the program offer?
Companies can reduce their production costs and improve their environmental footprint at the same time. The circular economy also strengthens competitiveness on international markets, as more and more customers prefer sustainable products.
Practical tip:
If your startup is active in the circular economy or is planning corresponding projects, prepare a detailed funding application. Document your measures to conserve resources and check possible collaborations with other companies or research institutes.
