Alongside many other factors, a successful start in self-employment depends on access to capital. Bank loans are generally needed, especially when taking over a business requires substantial capital, but these are often granted only if equity is available. In practice, many projects fail to overcome this hurdle.
WiReGo’s participation fund is one way to address this problem. Another is the so-called investment deduction, which businesses and founders can claim even before starting self-employment. What does this involve? Taxpayers can currently deduct up to 50 percent of the expected costs for the future acquisition of business assets in a way that reduces their tax liability. For a founder who is still in dependent employment but, for example, plans to start a business the following year, this reduces the income tax payable in the current year. In this respect, the former term “savings reserve” better describes what happens: a reserve is built up through an interest-free deferral of tax and can be contributed as equity as part of the startup financing.
This is a very simplified explanation. There are many details to consider, so tax advice is strongly recommended.
