Saxony and Bavaria are the strong locations for family businesses in Germany
Saxony knocks Bavaria off its throne, Lower Saxony is working its way forward, Saxony-Anhalt is particularly future-oriented, Rhineland-Palatinate is lagging behind. The results of the second federal state index of the Family Business Foundation in cooperation with ZEW Mannheim are in part surprising.
Among the territorial states, Saxony achieved first place in the Federal State Index 2025 with around 59 points, displacing Bavaria, which is now in second place, from first place in the Federal State Index 2022. Saxony achieved its top position in the overall ranking thanks to good scores in the sub-indicators "Labor & Human Capital" (first place among the territorial states), "Financing" (second place among the territorial states) and "Infrastructure" (joint first place with Lower Saxony among the territorial states).
Saxony and Bavaria are well ahead in the ranking, which combines a large number of individual indicators into five sub-indices: Taxes, Labor / Human Capital, Financing, Infrastructure, Institutions. Saxony, however, performs rather averagely in terms of taxes and institutions, while Bavaria does not really impress in terms of infrastructure. Lower Saxony (third place) is particularly good here. In contrast, Baden-Württemberg (fifth place) also shows weaknesses in infrastructure.
When it comes to infrastructure, electricity supply plays a role, with higher grid fees in the south. Those who have made a bold start on digitizing their administration are, like NRW, rewarded with a good ranking in the institutions index. The assessment is therefore complex, and not everything can be attributed to political decisions, as Prof. Dr. Friedrich Heinemann, head of the ZEW Research Department "Corporate Taxation and Public Finance", emphasizes.