Germany Adopts Startup and Scaleup Strategy

Germany’s federal cabinet has adopted a new startup and scaleup strategy, a broad plan from the Economics Ministry meant to make it easier to found companies, help them grow faster and keep their innovation inside the country. The cabinet signed off on the package on July 22, 2026, and it was later reported by mainstream outlets including Handelsblatt alongside government and trade press. For the many foreign founders and tech workers in Germany, it signals where policy is heading.

The startup and scaleup strategy bundles 152 individual measures across eight fields of action. Economics Minister Katherina Reiche presented it as a foundation for what she called the next generation of German world market leaders. The plan is meant to be delivered before the end of the current parliamentary term, so much of it is aimed at the coming years rather than a single budget.

What the startup and scaleup strategy sets out to do

The plan rests on three goals. The first is to make founding a company easier and quicker, cutting the red tape that new businesses face. The second is to help promising firms scale, meaning to grow from a small startup into a larger company, without running out of money or moving abroad. The third is to keep that innovation and the resulting jobs in Germany.

To get there, the government wants to reduce bureaucracy and mobilise far more venture capital, the risk money that finances young firms, from both private and public sources. A central pillar is improving access to growth funding, which officials describe as Germany’s biggest weakness: the country produces strong startups but often loses them to foreign investors when it is time to scale. The strategy channels support through vehicles such as the Deutschlandfonds and state-backed investment arms, and for the first time it puts more weight on areas like DeepTech and defence-related technology.

How the startup and scaleup strategy was built

The Economics Ministry says the startup and scaleup strategy was developed together with the startup community rather than drafted behind closed doors. According to the ministry, the process drew on around 300 submissions from founders, investors and industry groups, along with roughly ten workshops that fed into the final document.

That consultation matters because the sector has long complained that German rules do not fit the pace of a young company. Surveys cited around the launch showed that a large majority of startups see excessive regulation as a main obstacle to building a business in Germany. Whether the 152 measures ease that burden in practice will depend on how they are implemented, and some commentators have already questioned how quickly the funding promises will reach companies.

A record year for new companies

The strategy arrives during an unusually strong stretch for German entrepreneurship. More than 3,000 startups were founded in the first half of 2026, a record that already comes close to the total for all of 2025 and, by the government’s count, more than 50 percent above the previous half-year. Officials point to this surge as evidence that the founding climate is improving and that the moment is right to remove the barriers to growth.

Startups are also a meaningful employer. Government figures put the number of people working at startups and scaleups at roughly 522,000 in 2024, about a quarter more than four years earlier. Those are exactly the kinds of jobs, in software, engineering and research, that draw international talent to Germany, which is why the details of the strategy reach well beyond German founders.

What it means for foreign founders and employees

For expats, the startup and scaleup strategy is worth watching on three fronts: setting up, funding and staying. Easier and faster founding rules would directly help foreigners who want to start a business or work as freelancers, a path many take before building a larger firm. Our guide to freelancing and self-employment in Germany explains the current registration and tax basics that any founder still has to navigate.

More venture capital and stronger support for spin-offs from universities could mean more well-funded employers and more room for equity-based pay, which has been harder to arrange in Germany than in some other countries. The plan does not, on its own, change visa or immigration rules, so foreign founders and staff will still rely on the existing routes for residence and work permits. Still, a government that is actively courting startups is a positive signal for anyone who came to Germany to build or join one. The real test will be how many of the 152 measures turn into concrete changes that founders and employees can actually feel.