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GERMANY – Timeline set for the German private equity law

  • Emanuel
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The Federal Ministry of Finance has announced that it aims to have a bill drafted by the cabinet by the middle of next year. This means that the new legislation is on course to come into force in 2008. The new legislation is highly anticipated as it will lay out a clear set of regulatory and tax rules for private equity funds and investments in Germany.

So far it is not quite clear whether the German Federal Ministry of Finance is considering restrictions on the levels of debt that can be used in German investments. This would come hard on the heels of a proposed tightening of the rules on non-German holding companies and could - in a worst case scenario - mean that private equity funds would have to restructure both their non-German holdings and their German investments. In any case, a theme is emerging: the government is willing to support venture capital and mid-cap deals, but is closing in on larger buy-outs, especially those with significant debt.
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