Investment Incentives in Brandenburg
Brandenburg is considered a “Target 1” zone within the EU and therefore offers Europe’s best investment incentives.
The regional authorities support economic growth through a variety of tailored measures, including investment allowances, joint programs for companies and business networks, programs for developing industry expertise, as well as R&D and market access programs. Please see http://www.ilb.de/ for further details.
Moreover, several financial companies such as BC Venture GmbH and Seed Capital Brandenburg GmbH provide equity capital to businesses that intend to invest in the region, while Bürgschaftsbank Brandenburg provides security for SMEs in search of credit when they cannot provide normal guarantees. Please see http://www.bc-capital.de/ and http://www.bbimweb.de/ for further details.
Last but not least, the Federal State and the State of Brandenburg can provide the required guarantee to secure investment credits if no other financing possibility is available. Please visit http://www.bmwi.de/ and http://www.foerderdatenbank.de/ for further information and application.
Main Economic Development Tools
Investment Allowance (Investitionszulage, IZ)
A simple application procedure makes the tax-free investment allowance particularly interesting, especially for investors in remote locations such as the Oder Valley. In general, companies that meet certain legal requirements (in particular manufacturing businesses, production-related service providers, and hotels) are entitled to the allowance that covers between 12.5 and 27.5% of the initial investment.
Joint Programs for Industry Businesses (GA-G)
These programs aim to create and secure jobs in competitive companies in the manufacturing, media and service industries. They concern mainly SMEs and businesses in key technologies that benefit from subsidies as follows:
- Large businesses*: up to 30% of the investment amount
* More than 250 employees, sales of more than €50 million or balance sheet total of more than €43 million
- Mid-sized businesses**: up to 40% of the investment amount
** Less than 250 employees, sales up to €50 million or balance sheet total up to €43 million
- Small businesses***: up to 50% of the investment amount
*** Less than 50 employees, sales or balance sheet total up to €10 million
The investment incentives in Brandenburg comprise four modules:
- Basic incentive
- Incentive for potential development
- Allowance for mid-sized enterprises
- Allowance for small enterprises.
Companies active in a key technology may apply for a basic incentive to the amount of 15% of the eligible investment costs.
Brandenburg’s business promotion is geared to high-quality investments. Projects that provide beneficial structural effects and may result in a higher sustainability are eligible to an additional incentive for potential development of up to another 15%. Brandenburg grants such additional incentives:
- depending on the number of created permanent jobs and/or training posts in relation to the investment volume;
- depending on the share of new staff members with degrees from universities and institutes of technology;
- depending on the amount of R&D costs in relation to the turnover (manufacturing companies);
- depending on the number of permanent jobs in central functions (service providers);
- for investments in industry concentration centers, in regional growth areas, or in the tourism infrastructure.
According to this bonus system, the investing company must achieve at least 5% to fulfill the minimum requirements for the additional incentive.
The allowance for SMEs depends on the size of the company. In keeping with EU guidelines, it amounts to 20% for small businesses and 10% for mid-sized enterprises.
Brandenburg also makes labor cost promotion available for service providers as an alternative to the conventional investment incentives for buildings, machines, etc. In order to promote high-quality employment in the region, this incentive is granted for jobs with annual gross wages of at least €35,000. More...
Joint Programs for Business Networks and Cluster Management
In order to support supra-regional co-operation between companies, institutions and production-related service providers, Brandenburg’s Ministry of Economic Affairs promotes the development of networks in the German Capital Region through a pilot project that runs until December 2008 and bear the name “Co-operation Networks and Joint Task Cluster Management”. Eighteen such networks already exist in the following growth industries:
- Automotive industry
- Biotechnology/Life sciences
- Energy technology
- Food industry
- Surveying
- Synthetics/Chemistry
- Logistics
- Aeronautics
- Media/Information and communication technology
- Metal production/Metal processing/Mechatronics
- Petrochimical/Bio fuels industry
- Optics
- Tourism
Program for Developing Industry Expertise
Brandenburg has launched the “Impulse” program to support regional networks, primarily in growth industries. It aims to promote regional networks and co-operation projects among SMEs of the manufacturing industry and their service providers for up to three years. The “Impulse” program supports not only management activities (development, co-ordination and moderation), but also services for the design, implementation and updating of networks.
Yearly costs of up to €150,000 are eligible. The degressive incentive amounts to 90% of the eligible costs in the first year, 70% in the second year and 50% in the third year. More...
R&D Promotion in Small and Mid-sized Enterprises
In order to improve the competitiveness and innovation-friendliness of SMEs in the manufacturing and service industries, Brandenburg supports R&D projects aimed to develop new products and procedures in key technologies as defined by the regional authorities.
The incentive consists in financing the gross costs for industrial research (up to 80% for small businesses and up to 75% for mid-sized companies) and prototype development (up to 60% for small businesses and up to 50% for mid-sized companies), with a maximum of €500,000. More...
Main incentive program
The program is designed to promote industrial R&D for new or improved products, processes and technologies. It supports not only individual projects - which were already catered for under the previous incentive program - but also joint projects between companies or between companies and research facilities in the state of Brandenburg.
The maximum subsidy rate was raised as follows:
- small businesses: 60% for experimental development and 80% for industrial research;
- mid-sized companies: 50 to 75%;
- large businesses: 40 to 65%.
The program primarily supports projects in microelectronics and key technologies as stipulated in the LIK concept. More...
Innovation Assistant
Employing graduates of universities and institutes of technology as Innovation Assistants shall improve the competitiveness and innovation-friendliness of regional SMEs.
The incentive consists in contributing to 50% of the wages during the first year of employment (maximum €20,000 for each graduate), and to 40% during the second year (maximum €10,000). More...
Access to New Markets for SMEs
The targets of this program are to help SMEs accessing foreign markets, to promote sales in Germany, and to support the development of industry networks. The regional authorities therefore contribute to the costs for participation in trade fairs and for advice and training services by marketing consultants.
The incentive consists in a contribution of up to 50% of the eligible costs incurred by a company or group of companies within three years (maximum €50,000). Costs for stand hire, setup and operation during trade fairs, exhibitions and co-operation exchanges are eligible up to €15,000 per event and company. More...
Incentive programs of the federal government
In addition to the Brandenburg-specific programs, the German federal government also offers various incentive programs especially designed to promote collaboration between businesses and to support R&D projects and the development of networks in Eastern Germany. The federal incentive programs include in particular “InnoRegio”, “Innovative Wachstumskerne”, “Zentren für Innovationskompetenz”, “Innovationsforen”, “NEMO” and “INNOWATT”. More...
Furthermore, investors can capitalize on the multifaceted funding programs of the KfW bank at favorable interest rates. More...
Additional Information
Please click here for an overview of all investment incentive tools developed by the Federal State of Brandenburg. The brochure titled “Wirtschaftsförderung in Brandenburg/Business Promotion in Brandenburg” also provides interesting information. Moreover, you can download the latest information on guidelines, application rules and forms from the website of ILB Bank (www.ilb.de).