Germany Implements Broad 2026 Business Reforms and IT Security Overhaul Under NIS2 Directive

Starting January 1, 2026, Germany is enacting comprehensive business and regulatory reforms aimed at revitalizing the economy and enhancing security for companies. The coalition government has announced a 25% reduction in bureaucracy, equating to €16 billion in relief, alongside measures impacting workers, retirees, and drivers. Significant reform includes increasing the minimum wage to €13.90 per hour, with plans to raise it further to €14.60 in 2027, and introducing an "Aktivrente" scheme allowing retirees to earn tax-free income while continuing to work.

Tax changes will see a new CO2 levy added to heating costs for fossil fuels such as oil and gas, which could add approximately €84 annually for average gas consumers. Simultaneously, subsidies for electric vehicles will be introduced and tax exemptions extended, promoting greener transport options. Digitalization efforts underpin many reforms, including the rollout of digital handcraft cards and streamlined administration in sectors like agriculture, healthcare, and construction.

Complementing these economic measures, Germany has implemented the NIS2 Directive—belatedly but effectively—from the end of 2025. This new IT security regulation expands its scope more than tenfold, now covering a vast number of companies, including those previously unregulated and their associated service providers. NIS2 imposes stringent cybersecurity obligations to strengthen defenses against the rise in cyber threats, marking a critical shift in how businesses manage IT risks.

According to the coalition's plan reported by Handwerksblatt, these reforms target boosting economic efficiency while adjusting social policies. Meanwhile, Taylor Wessing's analysis underscores the extensive reach of NIS2 and provides guidance on the new security requirements companies must meet. Discussions and expert sessions are scheduled for late January to help businesses navigate the updated legislation.

In summary, Germany's 2026 business environment will see sweeping changes—both in economic policies promoting fair wages and environmental sustainability, and in regulatory frameworks enforcing advanced IT security. This dual-pronged reform approach reflects the government's commitment to modernizing its economy while safeguarding enterprises from emerging digital risks.