Location Promotion Act (StoFöG): Changes to Company and Capital Market Law

On December 19, 2025, the Bundestag passed the StoFöG. Although the law still requires the approval of the Bundesrat, this is expected to be granted on January 30, 2026, as planned. The Act contains various practical innovations in stock corporation and capital market law, including the implementation of the EU Listing Act (see, for example, Capital Market Law Update No. 60, 61).

Introduction of the 1-cent share

In future, companies will be able to issue shares with a (notional) par value of less than EUR 1, down to 1 cent. This is intended to remedy a disadvantage of the German AG that is sometimes relevant in practice when comparing legal forms with other countries. This has an impact, for example, on the structuring of restructurings or financing instruments for growth companies. For example, the issue of options to venture capitalists or employees currently requires a payment of at least EUR 1 per share, which may require a considerable capital investment, whereas this is not the case with a 1 cent per share. In addition, for companies with stock market prices of less than EUR 1, a reduction in the par value per share would make it possible to raise capital again without simultaneously consolidating shares.

Restructuring of the delisting regime

The StoFöG also reorganizes the delisting regime. In future, it will be permissible to switch from the regulated market to an SME growth segment (which in Germany effectively means Scale) without having to make a delisting purchase offer. Furthermore, delistings from an SME growth market will be treated in the same way as delistings from regulated markets and will require a purchase offer reviewed by BaFin that allows investors to exit in return for compensation. Uplistings to the regulated market, on the other hand, remain exempt from the offer requirement.

Against this backdrop, some companies in the regulated market are currently considering switching to Scale in order to reduce the regulatory burden. The motives for this can be manifold. A typical example is to escape BaFin's disproportionate sanctions practice, even by European standards. Minor offenses that ultimately do not really interest anyone are often punished with heavy fines. Unfortunately, the legislator is not addressing this issue – changing it would have been "location promotion." Other motives may include circumventing takeover law requirements in the future. In this case, a downlisting followed by a takeover without the regulations of the WpÜG (German Securities Acquisition and Takeover Act) and then a delisting 1 to 2 years later would be a way to legally avoid the minimum price rules of the WpÜG. 

Prospectus law simplifications

Prospectus-free offerings will be made considerably easier in the future. From June 5, 2026, prospectus-free offerings of securities (in particular shares and bonds) with a volume of up to EUR 12 million (previously EUR 8 million) will be possible within 12 months. However, this previously applied per class, whereas in future it will apply per issuer. Previously, it was possible to issue a convertible bond of EUR 8 million and carry out a capital increase of EUR 8 million without a prospectus, for example; in future, this will be a total of EUR 12 million.

Another very important practical change is the deletion of the provision stipulating that these prospectus-free offerings of EUR 8 million to date and EUR 12 million in future must be carried out by an investment services company within the framework of investment advice and brokerage. As a result, bond issues by companies outside the financial sector as proprietary issues were in many cases not feasible under these exemptions. This will change in future. However, it should be noted that the disclosure requirements of case law, according to which "prospectus-like" core information must still be available, remain unchanged.

In the course of implementing the EU Listing Act, the liability provisions of the WpPG will also be extended to the new Annex IX document. In certain cases, this document replaces the prospectus and contains condensed basic information. In our practice, the Annex IX document has already gained considerable importance.

Conclusion

It can therefore be seen that there have been few changes in the legislative process with regard to the topics summarized here. The StoFöG is expected to come into force at the beginning of 2026. The 1-cent share and the adjusted delisting regime will be particularly relevant in practice. The simplifications in prospectus law and securities trading law are also welcome.