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Germany: What happened in 2019 and significant events in 2020

German Law: Year in Review 2019 and Year to Come 2020 summarises some of the major developments in Germany last year, and a selection of key changes that we anticipate over the coming year. There are links to further reading, where available.

A broad range of legislative updates were made in 2019, and further reforms are expected in 2020. Some new developments are triggered by the situation in Germany, whereas further initiatives are based on new European regulatory requirements.

Explore our overview of key areas you need to be aware of below.

Key updates to


major legal developments in 2019 and 2020

Technology evolution and environmental changes are key – both trigger global and national regulatory actions. We saw a significant number of legislative milestones implemented in 2019 impacting our clients’ businesses. We note that numerous regulations have an environmental component and sustainability is at the forefront. 

Sebastian Benz, Knowledge & Learning Partner, Germany

Sebastian Benz

2019 has seen significant changes in law at EU level, which will impact your business in the years to come. By watching this video, you can get a sneak peek into:

  • the sustainable finance package, which seeks to integrate environmental, social and governance considerations into the investment process;
  • the banking package, which brings changes to prudential regulation and the resolution of banks;
  • the investment firms review package, which marks a major reform for capital and liquidity rules for investment firms;
  • the clean energy package, which aims to create an integrated energy market;
  • the screening of FDI regulation, which sets minimum standards for national FDI screening.

Significant events in 2020


Crypto assets qualify as a new category of financial instruments in the German Banking Act and rules regarding custodian business in this regard will be implemented.

Corporate liability

Comprehensive changes to the existing system are proposed in respect of the liabilities of companies for criminal offences committed by their managers.

Shareholder Rights

Implementing SDR II into national law will lower bureaucracy hurdles and strengthen shareholder rights.

Significant legal and regulatory events in 2020

Explore the tabs below to review the key legal developments you need to be aware of in 2020

Banking Regulation

Bank Recovery and Resolution: BRRD II and SRMR II were published in June 2019 and reforms inter alia the MREL regime. Germany will implement BBRD II into national law by the end of 2020, SRMR II will apply directly on the same timetable.

Read more

European Deposit Insurance Scheme: Since November 2019 there has been new momentum to establish EDIS. A German non-paper makes suggestions that the different performance of national deposit guarantee schemes (nELS) could be offset by a European reinsurance system. It is likely that Germany will push to compromise during its upcoming European Council Presidency in the second half of 2020.

Capital Markets

Securitisation: Even though applicable since 2019 further delegated regulations (such as on transparency requirements for originators, sponsors and SSPE) are expected to be published in relation to the Securitisation Regulation during the course of 2020.

Issuer Guidelines: The Federal Financial Supervisory Authority is expected to publish the outstanding module C of the new edition of the Issuer Guidelines for German and foreign issuers whose securities are admitted to trading on a German stock exchange. The new module C which was consulted in 2019 will consider the changes brought into force by the Market Abuse Regulation.

Climate and Sustainability

Sustainable Finance Taxonomy: In October 2019, trialogue negotiations began on the planned EU Taxonomy Regulation, which aims to set out uniform criteria, and a process for establishing a unified classification system, for determining whether an economic activity is environmentally sustainable. If a political agreement is reached early, the Regulation could be formally adopted in Q1 2020.

Benchmark Regulation: Amendments introduce two new categories of benchmarks: "low-carbon" benchmarks and "positive-carbon impact" benchmarks. In addition, the possibility of using existing, but non-registered critical benchmarks has been extended until the end of 2021. Also extended was the admissible maximum period for a mandatory administration of, or contribution to, critical benchmarks, namely to a total of five years.

Climate Protection Legislation: In line with the Climate Protection Plan 2030 published in October 2019 the government started legislative procedures to introduce a national CO2 pricing regime for the transport and heating sectors as of 2021, requiring companies selling fuels to acquire CO2 certificates. Coal fuelled power plants are to exit the market by 2038. Also, the share of electricity generated from renewable sources will grow to 65% in 2030. Energy storage, electric vehicles and their charging infrastructure will be promoted by adjusting regulatory requirements.

Plastic Regulation: The upcoming implementation of the EU-Single-Use Plastics Directive will lead to stronger regulation of certain types of single-use plastic products, the general rise in awareness having possible regulatory effects on all types of plastics.

Competition and Antitrust

Competition Law Reform: Germany’s Competition Law reform reflects competition law in digital ecosystems and considerably extends the FCO’s enforcement powers against “super-dominant” firms with a view on digital platforms. It aims to focus German merger control by raising the second domestic turnover threshold and by extending the maximum merger control review period by one month. The draft act reduces the Federal Cartel Office’s requirements for imposing interim measures, provides for comfort letters for co-operation between competitors and strengthens the authority’s investigative powers and procedural rights in appeal proceedings.

National and EU Foreign Investment Control: Following the lowering of intervention thresholds in Germany, the regulator has seen another all-time high number of notified cases and in-depth review proceedings. A new regulation for investment screenings in the EU, including a framework regulation for foreign investment screenings by the EU member states, was adopted in March 2019. It will be directly applicable as of October 2020 and a further reform of the German provisions is expected as part of the implementation of this regulation.

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Implementation of 2nd Shareholder Rights Directive: The new legislation will bring significant changes to German stock corporation law in 2020. The main issues are an extension of “say on pay” provisions, a restriction on related party transactions, further transparency requirements in relation to institutional investors and the identification of shareholders.

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Corporate Governance Code: Fundamental changes to the code such as provisions on the independence and remuneration of board members will come into force after the implementation of the amended EU Shareholder Rights Directive.

Corporate liability for criminal offences: The Ministry of Justice presented a “draft law on combating corporate crime” in August 2019. The draft inter alia proposes amendments to available sanctions, procedural changes, and new regulations on internal investigations. It entails conceptual and comprehensive changes to the existing system, which are subject to discussion in the legislative procedure. The law is expected to come into force in 2020.

Read more

EU Company Law Package: The Package includes new rules on cross-border mergers, conversions and divisions as well as on digital tools in company law allowing e.g. the founding of a GmbH via video conference. Implementation is planned for 2021 and 2022

Data Protection

GDPR: Uniform concept for the calculation of fines: To harmonise the calculation of fines under the General Data Protection Regulation within the Member States of the EU by the supervisory authorities, guidelines are currently being created at an EU level. The German supervisory authorities have already published their own calculation scheme considering a variety of factors.


Anti-Money Laundering: The implementation of AMLD5 will come into force in January 2020. Members of the public are no longer obliged to prove legitimate interest in order to access information regarding ultimate beneficial owners in the German transparency register. Increased due diligence requirements for high-risk countries will apply. Furthermore, crypto assets as a new category of financial instruments in the German Banking Act and rules regarding custodian business in this regard will be implemented.

Digital Health: The Digital Health Care Act is expected to come into force at the beginning of 2020. It introduces a specific procedure for digital health applications to qualify for reimbursement under the statutory health insurance scheme.

Intellectual property

Patents: The government is planning to reform the Patent Act. Earlier discussions focused on automatic injunctions and the gap between decisions on infringement and validity. Government officials recently indicated, however, that the reform might also entail improvements to the patent procedure and trade secret protection in patent infringement proceedings. The legislative process is expected to be finalised during 2020.

Investment Management

Prudential Regulation for Investment firms: The European legislator proposed an Investment Firms Directive and Investment Firms Regulation to implement a new prudential regime for investment firms also affecting governance requirements and renumeration rules. IFR and IFD will concern a very wide range of non-bank financial institutions including asset managers, investment banks, stock brokers, private equity and venture capital firms. The reform package will also change the terms on which non-EU firms can access EU financial markets. The new regime is expected to apply from Q2 2021, with new capital requirements being phased in by 2026.

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Investment brokerage: Amendments to the German Placement Agent Regulation will come into force in August 2020. The regulation is relevant for all financial investment brokers and fee-based financial investment advisers. They will be subject to the German Banking Act and BaFin will be the competent supervisory authority.

Restructuring and Insolvency

Pre-Insolvency Restructuring: In October 2019, trialogue negotiations began on the planned EU Taxonomy Regulation. It aims to set out uniform criteria, and a process for establishing a unified classification system, for determining whether an economic activity is environmentally sustainable. If a political agreement is reached early, the Regulation could be formally adopted in Q1 2020.


RETT Reform: The reform of the real estate transfer tax on share deals is expected to be adopted in 2020. It remains to be seen if the main amendments as included in the government draft, such as the lowering of the 95% thresholds for shareholdings to 90% and the extension of the current holding periods from 5 to 10 or 15 years will be implemented.

Read more

Foreign Tax Reform: In the context of the transposition of ATAD I/II into national law, it is intended to further amend the Foreign Tax Act with respect to the CFC rules and the low tax rates of currently 25%.

Modernisation of corporate taxation: The German conservative parties have published a concept paper on the modernisation of German corporate taxation, the central subject of which is a tax relief for small and medium-sized companies. It is uncertain to what extent the extensive concept paper will lead to legislative proposals.

Read more

What happened in 2019

Brexit planning

To prevent serious market interruptions Germany enacted laws regarding the worst-case scenario of a hard Brexit.

Data Protection

This is very topical with several laws, such as the Trade Secret Act and the implementation of PSD2 and other corporate and financial regulations.


This will be key in the future. The EU Taxonomy for Sustainable Finance is on track and new carbon benchmarks will trigger future investment decisions.

What happened in 2019

Explore the tabs below to review the key legal developments you need to be aware of in 2019

Banking Regulation

Reform of Banking Regulation: CRR 2 and CRD V were published in June implementing fundamental changes to prudential regulation also affecting business planning, risk assessment and the remuneration structures of financial institutions.

Read more

Banking Union: In its verdict at the end of June the German Federal Constitutional Court approved Germany’s participation in the European Banking Union and the European Stability Mechanism in line with the German constitution.

Payment Services: Due to the next step of implementing PSD2, stricter rules have applied to the online banking authentication process and data protection since mid-September.

Read more


Brexit Accompanying Tax Act: The act contains provisions to prevent detrimental tax consequences, merely as result of a Brexit, with respect to circumstances that have been implemented by the taxpayer in the past (“Brexit as a harmful event”). For reasons of legal certainty and clarity, it came into force on 29 March 2019. Amongst others, the law amends the German Banking Act regarding the dismissal of risk takers, cross border financial services, own funds and enables BaFin to publish administrative acts.

Capital Markets

Market Infrastructure Regulation: EMIR has been amended by the so-called EMIR REFIT and EMIR 2.2. The reform package brings changes regarding the calculation for clearing and hedging obligations as well as reporting obligations. It also introduces a category of a small financial counterparty. EMIR 2.2 sets out amendments regarding the supervision of clearing counterparties (CCPs) and the recognition of third country CCPs.

Prospectus: The new EU Prospectus Regulation has been applicable since 21 July 2019. Together with several delegated acts, technical standards and implementing measures, it replaces the previous Prospectus Directive.

Read more


Climate and Sustainability

Sustainable Finance Taxonomy: In October 2019, trialogue negotiations began on the planned EU Taxonomy Regulation, which aims at setting out uniform criteria, and a process for establishing a unified classification system, for determining whether an economic activity is environmentally sustainable. If a political agreement is reached early, the Regulation could be formally adopted in Q1 2020.

Sustainability risks: Until the beginning of November BaFin (Federal Financial Supervisory Authority) ran a consultation for a new leaflet on dealing with sustainable risks such as ESG factors for financial institutions, insurance companies and investment firms containing guidelines for risk and strategy planning and stress-testing.

Competition and Antitrust

Competition: Whilst the Amazon-probe was settled, FCA´s Facebook decision was quashed in interim appeal proceedings before the Higher Regional Court of Düsseldorf. It is now up to the Federal Court of Justice to determine whether a failure to comply with data protection laws may constitute an infringement of competition law. Further, the Federal Minister of Economics granted ministerial approval for the Miba/Zollern joint venture which was previously prohibited by the Federal Cartel Office.

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Merger Control: The EU Commission issued another record fine for gun jumping by way of a two-step warehousing structure (Canon). Companies should exercise extreme caution in using these types of deal structures, in particular with regard to the foreseeable exercise of acquired options and pre-payments considerations.

Read more


Corporate Governance Code: In line with the implementation of the amended EU Shareholder Rights Directive the government commission resolved a fundamental change of the code in May, including provisions on the independence and remuneration of board members.

Trade Secrets: The Law on the Protection of Business Secrets against Illegal Acquisition, Use and Disclosure entered into force, implementing the EU Know-how Directive to create a uniform EU standard for the protection of trade secrets. Clients face stricter requirements for the protection of their trade secrets.

Whistleblower: New rules to protect whistleblowers revealing breaches of EU law in a wide range of areas were adopted in October. Member states must now implement the law within two years. It is expected that German legislation will be extended to also include breaches against national law.

Read more

Data Protection

Tracking cookies: The European Court of Justice has ruled that pre-checked consent boxes for tracking cookies are not permitted under the EU privacy laws. Consent must be explicit and obtained prior to storing or accessing tracking cookies for targeted advertising. Website operators are required to inform users about the storage periods and which third parties will have access to the information.

Social plug-ins: The European Court of Justice ruled that website operators incorporating Facebook’s “like button” are joint controllers under the General Data Protection Regulation. Companies that have integrated any social plug-ins on their website must therefore enter into a joint controller agreement with Facebook stipulating several data protection obligations.

ePrivacy: The EU-ePrivacy Regulation is still work in progress. Once finalised the regulation will propose greater regulation of electric communication and increase privacy. Companies will face substantial fines when in breach of the rules. Legislative progress is awaited: the trialogue negotiations have not yet begun. The regulation is not expected to come into force before 2020 implementing a transitional period of two years.


Digitalisation: The German Ministry of Finance published a paper regarding the prospective possibility of electronic securities issuances under German law. The paper raises the idea of issuance via blockchains and a number of different legal questions that go hand in hand with the introduction of such electronic securities. A concept regarding virtual shares is expected. The German Blockchain Strategy introduced a more detailed timetable regarding these developments.

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Dispute Resolution

Singapore Convention on Mediation: The so-called Singapore Convention on Mediation, which paves the way for settlements reached by mediation to be recognised internationally, opened for signature and was immediately signed by 46 states, including the US and China. The Convention will come into effect six months after the deposit of the third instrument of ratification, acceptance, approval or accession.

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Hague Judgments Convention: The HCCH unveiled the final text of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The so-called Judgments Convention aims to facilitate cross-border litigation by establishing a general recognition and enforcement regime for court judgments among Contracting States.

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First Model Declaratory Action Proceedings: Since the new Model Declaratory Action Act came into force at the end of 2018, seven actions have been brought. The case against Volkswagen relating to the diesel scandal has been the focus of attention with the oral hearings starting in September. Decisions relating to the other cases brought important clarifications regarding the new law.

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Reform of the Code of Civil Procedure: The Federal Government adopted a draft law which is intended to amend and modernise various provisions of the Code of Civil Procedure. The new law shall increase the quality and efficiency of civil court proceedings. It aims at regulating the value limit for appeals to the Federal Court of Justice in civil cases, increasing specialisation in the courts and amending other provisions of civil procedural law.


Collision Rule in Collective Bargaining Law: In companies where employees are represented by more than one trade union, the collective agreement of the trade union with the most employees in this company will apply to all employees irrespective of their union membership. Following a verdict of the Federal Constitutional Court the Collective Agreement Act was amended in 2019 to allow for the application of collective agreements of trade unions with a minority of employees, under certain circumstances.

Part-Time working: Legal entitlement to part-time work for a limited period of time came into force in January 2019. Employees can return to their previous working hours after a part-time phase of at least one and up to no more than five years.


Subsidies for renewables not considered to be state aid: The European Court of Justice did not consider the subsidy regime for electricity from renewable sources under the Renewable Energy Act 2012 to be state aid. Thus, energy-intensive companies which previously had to pay the EEG levy in arrears because they had supposedly been relieved too much might now be able to recover these post-payments.

Energy audits for companies with low energy consumption: Companies consuming fewer than 500,000 kWh per year will be able to comply with the obligation to conduct an energy audit by entering basic information on the company and its energy consumption in an online portal.


Disclosure rules for cross-border tax planning arrangements: In essence, the bill implements the provisions of the EU Directive (“DAC 6”) which has to be transposed into national legislation by the Member States until 31 December 2019. The highly controversial disclosure rules for purely national arrangements are not included.

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Annual Tax 2019: The Omnibus Act provides for various tax measures such as the trade tax reduction for gains from shares in third country companies as well as the implementation of the union rules with respect to the VAT consignment stock.

Real Estate Tax Reform: The new provisions stipulate that the tax levy shall no longer be based on the land value (which had been rejected by the German Constitutional Court) but shall take into account other factors such as rental income. An opening clause allows the German states to base the real estate tax levy on a modified evaluation process.

Research and Development: This act implements tax incentives for research and development with a legal claim for all companies subject to limited or unlimited tax liability, irrespective of their size and legal form or their economic activities.

Explore our Year in Review 2019 and Year to Come 2020 series across 20+ jurisdictions and a number of topics.

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