64 billion euros in bureaucratic costs per year

The reduction of bureaucracy in Germany is gaining momentum. However, small and medium-sized enterprises are seeing little relief. According to the Regulatory Control Council, one bright spot is the construction turbo.

This article is part of the special topic Bureaucratic madness in the craft industry

The National Regulatory Control Council (NKR) sees a trend reversal in compliance costs – the time and cost that companies incur due to legal requirements. According to NKR Chairman Lutz Goebel, bureaucratic costs have fallen noticeably for the first time: by around 3,2 billion euros. 

But there is still no reason to sound the all-clear for small and medium-sized enterprises. The bureaucratic burden remains very high at 64 billion euros per yearAnd: "13,2 billion euros in additional compliance costs since 2011 are still far too high," said Goebel.  

Goebel warned in Committee on Digital and State Modernization of the Bundestag: "This mountain of burdens must be consistently removed." New requirements at EU level could burden SMEs with an additional 3,7 billion euros - a considerable expense, especially for companies with scarce resources. These include the NIS2 policy for more cybersecurity and CSR guidelines on sustainability reporting. However, both tend to affect larger companies.

Bureaucratic burdens arise in companies, for example, through

✓ Documentation and reporting obligations (e.g. reporting employees subject to social insurance contributions)

✓ Labelling requirements (such as the energy label for electrical appliances) 

✓ Cooperation in audits (e.g. external audits or cash register inspections by the tax office)

✓ compliance with legally prescribed minimum technical standards  

✓ Compliance with occupational health and animal welfare regulations 

Source: Destatis

With the new Federal Ministry for Digital Affairs and State Modernization (BMDS) The reduction of bureaucracy is now to be a top priority. The project, led by the BMDS under the leadership of Federal Digital Minister Dr. Karsten Wildberger developed Modernization agenda aims to simplify procedures, make laws more practical and improve digital access to administrative services.

Handover of the NKR Annual Report 2025 to Federal Minister Dr. Karsten Wildberger on 2 October 2025 Photo: © Sebastian Woithe

According to Goebel, success depends on whether all ministries will go along – and that's not the case everywhere at the moment. "Some companies are very hesitant," he criticizes. The legislative process also often leaves companies too little time to implement new requirements.

A first concrete step is the so-called "Construction Turbo" the Federal Government, which provides relief for planning and construction in the amount of 2,5 billion euros A potential ray of hope, especially for SMEs in the construction and trades sectors.

When asked by the Bundestag committee, the NKR emphasized the importance of IT networking of around 11.000 municipalities Uniform standards and the reuse of software could simplify procedures – for example, in the digitization of applications or approvals.

The idea of ​​a Germany-wide administrative app is not currently being planned, said Digital State Secretary Philipp Amthor (CDU). However, they are working on building blocks that could bring real added value – such as uniform interfaces or better digital forms. 

Amthor pointed out that the Modernization agenda is "the key" to making more ambitious and stronger progress with the relief projects.

Source: hib; Destatis; Regulatory Control Council

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