Rising rents, less venture capital and a shortage of talent are taking the shine off Berlin as a hub for startups. The government has taken note and is drawing up legislation to ensure the country and its capital stay attractive for entrepreneurs to help drive the economy of Europe's industrial powerhouse.

Chancellor Olaf Scholz's government aims to offer incentives to improve access to credit and talent with the Future of Financing Act. It will include proposals to simplify listing and post-listing requirements for startups and to digitalize capital markets. It also wants to increase the tax allowance for employee share ownership to 5,000 euros from 1,440 euros. A first draft will be ready in summer, and the law will be implemented in 2024.