46%
more
Software start-ups launched in 2025 than in 2024 — 853 in total.
Germany’s Startup Strategy: Less Red Tape
The German government’s startup and scale-up strategy makes starting a business more attractive. Entrepreneurs will face less red tape and access venture capital faster.
When the South Korean AI start-up Nota AI was scouting for a European base in 2022, its founders didn’t take long to settle on Berlin. The company, which develops traffic-monitoring and driver-assistance systems, was drawn by Germany's formidable automotive and logistics sectors and the capital's reputation as a launchpad for new businesses.
“Germany is the powerhouse of Europe, known for its economic strength and its spirit of innovation,” the company says. “Berlin has quickly emerged as a dynamic hub for Europe's new generation of start-ups.”
The German government is working hard to appeal to founders from abroad. Economic Affairs Minister Katherina Reiche describes the start-up and scale-up strategy adopted by the government in the summer of 2026 as a significant step forward. Its ambitions, she says, can be distilled into three imperatives: making it easier to start a business, accelerating growth and keeping innovation in Germany.
Björn-Ove Krahn, a start-up expert at Germany Trade & Invest (GTAI), enumerates the benefits for international founders. “More capital, less bureaucracy and greater flexibility. The new strategy for start-ups in Germany is fully focused on growth, opening up attractive prospects in the German market.”
Read this article to find out:
1. What Germany’s new start-up strategy focuses on
2. What international founders need to know.
3. How the Germany Fund brings venture capital closer.
Cutting red tape
The commercial register, the tax office, the social security authorities, the trade office – until now, each agency has operated according to its own procedures and with its own forms, obliging founders to fill everything out separately and submit documents to multiple locations.
“Bureaucracy is one of the biggest hurdles to starting a business in Germany,” says Krahn. “The government takes the problem seriously and intends to change it.”
In future, founders will be able to enter their details just once through a single digital process – such as a web portal – which will then route the information to the relevant authorities. For Krahn, this is a genuine game changer: “It will make it easier for international start-ups to work with German authorities.”
A further measure under consideration would allow company formations to be notarized online. In Germany, every company formation must be officially notarized, and at present, founders are required to appear in person in Germany to complete this step. The government aims to change that. With online notarization, entrepreneurs will be able to incorporate a German company from abroad. “That would be a real help for international start-ups,” Krahn says.
“More capital, less bureaucracy and greater flexibility – the new strategy for start-ups in Germany is fully focused on growth.”
More venture capital
Capital is the lifeblood of any young company. In 2025, venture capitalists invested a total of EUR 7.2bn in German firms. To push that figure higher, the government has been channeling billions (a total of EUR 30bn) into the market since late 2025 – partly in the form of guarantees – via the “Germany Fund,” a joint initiative with the state-owned development bank KfW.
The goal is to catalyze a further EUR 130bn in private investment. The Germany Fund combines a range of financing instruments and selectively absorbs a portion of investor risk. Its thematic focus spans deep tech, artificial intelligence and biotech and now extends to defense and security technology – for the first time.
Germany already has a track record of turning innovation into globally successful businesses. Its scale-ups and unicorns include Celonis, Personio, Enpal, Isar Aerospace and defense-tech champion Helsing. The new strategy aims to help more companies follow in their footsteps.
Defense tech opportunities
Germany is already Europe’s leading hub for defense-related venture capital. In 2025, roughly 50 per cent of all venture capital invested in the European defense sector flowed into German companies. Strong players include Helsing and Quantum Systems, which develops drones and aerial reconnaissance systems and has built a strong international presence.
The new start-up strategy aims to accelerate this momentum by explicitly making security and defense a priority sector. With backing from the Germany Fund, the pipeline of venture capital into the defense industry is set to grow:
“The state can now support defense-sector start-ups and scale-ups by investing in specialised venture capital funds for the industry via the Germany Fund,” explains Krahn.
Other public funding instruments – including programs run by the Federal Agency for Breakthrough Innovation – are also being opened to defense-sector start-ups for the first time, having previously been reserved for civilian projects exclusively.
Some aspects of the government's strategy remain works in progress. But the direction is clear: Germany is placing its bets on innovative, early-stage businesses as the country’s engines of future growth, prosperity and security.
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38%
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Health start-ups launched in 2025 than in 2024 — 428 in total.
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80%
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Food start-ups launched in 2025 than in 2024 — 295 in total.
Source: Startup-Verband / startupdetector
Germany, unpacked
Germany is establishing itself as one of Europe's most dynamic start-up locations, as the numbers bear out. In 2025, the number of new start-ups reached a record 3,568, up 29 per cent on the previous year. The momentum has intensified: in the first half of 2026 alone, 3,053 companies were founded, more than 50 per cent more than in the entire second half of 2025. The driving force behind this sustained surge is a cluster of technology-driven, research-intensive megatrends. Artificial intelligence and deep tech, in particular, are proving powerful catalysts for start-up activity across the country.
Looking to start a business in Germany?
Björn-Ove Krahn
GTAI’s start-up expert