The Leipzig Region, Germany: ideal for new business funding
The Leipzig region is currently attracting many businesses along with people looking to find suitable work and build a life here. Leipzig is the fastest growing city in Germany and offers perfect conditions with a wealth of attractive sites of all shapes and sizes for your business to settle and grow.
What business funding is available in the Leipzig region?
The region of Leipzig also offers many new business funding opportunities, with the Leipzig Region and the Free State of Saxony contributing up to 30% of your investment costs. If you are looking for funding to start your business, Invest Region Leipzig will provide you with comprehensive information on the available funding and put you in touch with the relevant funding agencies in the region.
This article outlines six common funding sources for businesses in the Leipzig region.
1. Support programme for growth and expertise in SMEs
The Office for Economic Development has a wide range of programmes of its own to support a competitive economy in Leipzig. Small and medium-sized enterprises (SMEs) receive focused support to fill the gaps in national and regional aid programmes.
The City of Leipzig’s SME Support Programme is a central pillar in its backing for economic development. The goal is to devise viable, promising solutions and financially support them whenever the resources of small and medium-sized enterprises are objectively insufficient. The programme was launched in 2013 to enable SMEs to make better use of their own potential – above all by means of innovation and technology-based project funding – and hence boost their competitiveness.
In 2021, the City of Leipzig doubled funding for its SME programme to €1.8 million per year. In addition, the SME Support Programme was simplified by the Office for Economic Development and subdivided into just four schemes. Project support is now available for sustainable business growth, securing businesses in times of crisis, and business succession. Furthermore, subsidies are granted to skilled tradespeople who set themselves up in business after qualifying as master craftspeople as well as others with especially inventive business concepts. Founders are also eligible for assistance as they take their first commercial steps in Leipzig.
2. Project-based and individual commercial support
The primary goals of public subsidies under the GRW Joint Task ‘Improvement of the Regional Economic Infrastructure’ are to create new jobs and secure existing, competitive ones. Financial support is provided for commercial investments and business-related infrastructure schemes. Assistance is also available for the construction and improvement of resources as well as the diversification of production, the modernization of manufacturing operations, and upgrading the regional infrastructure. This funding is mainly awarded to SMEs and is intended to help tap the endogenous regional development potential.
3. Funding for research and technology
The Free State of Saxony uses a variety of funding programmes to aid businesses, universities and research centres with R&D and technology transfer. Apart from the usual technology funding programmes (financed by the ERDF European Regional Development Fund and the Free State of Saxony), technology funding from the ESF (the European Social Fund) is available to Saxon companies under the programmes InnoExpert, InnoTeam and Transferassistent. Saxony uses this funding to help above all SMEs recruit personnel to conduct R&D, introduce internal innovation management, and carry out technology transfer tasks. All in all, in 2020 the Saxon Ministry of Economic Affairs, Labour and Transport approved grants for 442 research and technology projects totalling about €64 million under the above-mentioned schemes. They include 76 projects by enterprises, universities, non-university research institutes and other beneficiaries operating in Leipzig, for whom grants of around €9 million were approved.
4. S-Beteiligungen: Capital for growth, innovation and digitalization
Sparkasse Leipzig’s investment entities known as ‘S-Beteiligungen’ invest in regional SMEs to help achieve the growth, visions and innovations of local employers. By the end of 2020, they had invested a total of over €94 million in central Germany, including over €6 million in 2020. As a result, more than 125 firms have managed to bring their foundation and expansion plans to fruition. Investments for growing companies range between €500,000 and €2.5 million.
The S-Beteiligungen act as management partners for the WMS growth fund Mittelstand Sachsen Plus, which provides equity to innovative, promising, growth-focused companies in Saxony, and produced another €85 million for Saxon SMEs in 2020 under WMS III. As a management partner for the TGFS Technology Venture Capital Fund in Saxony, the S-Beteiligungen strengthen young, innovative tech companies with venture capital. They are currently investing in firms with a total of about 1,420 employees.
5. Promoting cooperation between research and industry
The Leipzig Foundation for Innovation and Technology Transfer supports projects likely to stimulate economic development in Leipzig and bring about lasting change. It concentrates its activities on transferring knowledge and technology between research and industry. Funding is provided for new products and processes in and for Leipzig companies.
The aim is to support the regional economy, to adapt it to rapidly changing market requirements, and to advance and keep pace with digitalization. Between 2001 and 2020, projects were funded to the tune of around €11 million.
6. Centres Fund: Making the city centre, district centres and high streets more attractive
City centres, district centres and high streets are the heart and soul of economic, cultural and social life in Leipzig. However, businesses have come under pressure from the Covid pandemic, online retail and demographic change. The City of Leipzig has therefore taken measures to make the city centre more attractive as well as to fund other initiatives with the same aim. One of these schemes is the Centres Fund, designed to support the revitalization of the city centre and district centres. The City of Leipzig is taking steps to make these areas more attractive as well as to aid businesses and
institutions with ideas for the temporary use of vacant premises or which launch events to boost the retail sector.
Identifying the right funding for your business with Invest Region Leipzig
After you’ve found the ideal location for your business in the Leipzig Region, the next step is to find and secure funding to help your company grow. There are a variety of funding opportunities and sources within the region, which allows you to find the best suited funding for your business.
Invest Region Leipzig can assist you in obtaining funds from the government and other funding organisations by working with our colleagues in municipal business development. We’ll guide you through the whole process, link you with the relevant organisations to help you fund your project, and answer any concerns you have about financing and funding options.
Need advice and guidance on doing business in Germany?
As professional consultants with many years of expertise, we support you in all the important steps for the successful implementation of your project: from the choice of the ideal business location and the right office and commercial space to identifying suitable funding and helping you to recruit skilled workers. Our promise: a confidential and free service.