Investment Incentives

Cash Grants under the Joint Task for the Improvement of Regional Economic
Structures, a program administered by the Ministry of Economics and Energy, is one instrument
available for improving the infrastructure of regional economies and the economy as a whole – a
key objective for Germany’s federal and state governments.

The government has promoted investment in the former East Germany and offers several programs only in these regions. The
primary program is the Investment Allowance Act, which provides tax incentives for
investments in the eastern states in the form of tax-free cash payments or tax credits.
A comprehensive package of federal and state investment incentives, including cash, labor-
related and R&D incentives; interest-reduced loans, and public guarantees is available to
domestic and foreign investors alike. Investment incentives and operational incentives can be
combined.