Frankfurt (Oder) looks to get the incentives mix right

There are numerous opportunities for investors across east Brandenburg, and the region is determined to improve awareness and the take up of these opportunities. Due to its categorisation as a ‘predefined C region’ under the EU’s framework, Frankfurt (Oder) and its surrounding region can offer investors the chance to apply for the highest investment incentives possible in Germany with a grant of up to 40%. 

Dependent on the number of new jobs created, the total investment volume and the size of investing company, investment grants tend to be 20% for large companies, 30% for medium-sized companies and 40% for small companies. The process has been made easier for prospective investors through a funding calculator on the Investor Center Ostbrandenburg (ICOB) website, which gives an initial idea of the potential funding available to investing companies.

“We ensure, together with our regional and nationwide partners, that the process of investing in the region is as seamless as possible. Thereby foreign and domestic investors profit from numerous benefits and services including approval management, subsidy application or preselection of staff,” says ICOB managing director Christopher Nüsslein.

Aide from investment incentives, Frankfurt (Oder) offers significantly lower rental and labour costs than in nearby Berlin. It placed first in terms of cost-effectiveness in fDi’s German Cities of the Future 2016/17 ranking.

State support success

The decision by specialist semiconductor manufacturer Yamaichi Electronics to expand its facility in the city was perhaps made easier through the incentives that build upon the strengths of the region – but not as much as the supportiveness of the city and state governments.

“The financial incentives in the form of direct cash incentives were interesting for us but not crucial for our investment decision,” says Helge Puhlmann, European president at Yamaichi Electronics. “The support from the city of Frankfurt (Oder) and the state of Brandenburg was excellent,” he adds.

Also located in the federal state of Brandenburg, the business promotion bank Investitionsbank des Landes Brandenburg (ILB) supports and promotes public and private investment projects with direct cash incentives for investment and R&D projects, as well as for labour, infrastructure or housing construction.

ILB offers low-interest loans, subsidies, liability exemption, guarantees and venture capital (VC) to ensure companies at all stages of business development are supported in Brandenburg. Support of SMEs through VC, equity and equity-related financing have been utilised by success stories such as Unicaps and AsGoodAsNew, both homegrown companies that have found a supportive environment in Frankfurt (Oder). 

This report was published in association with Investor Center Ostbrandenburg, GVZ Frankfurt (Oder) and Oder Frankfurt Subice. Reporting and editing were carried out independently by fDi Magazine.