# Federal Testing Act Creates Framework for Regulatory Sandboxes > The new Federal Testing Act regulates time-limited regulatory sandboxes in the enforcement of federal law and sets clear limits. Source: https://www.mtrlegal.com/en/federal-testing-act-framework-regulatory-sandboxes/ · Language: en · Updated: 2026-10-25 --- ## Act creates framework for experimental spaces Act of 9 October 2026 – file reference unknown: The “Act to Strengthen Germany as a Location for Innovation and Business through Experimental Spaces” has been published in the [Bundesgesetzblatt 2026 I No. 289 (Federal Law Gazette)](https://www.recht.bund.de/eli/bund/bgbl-1/2026/289). The omnibus act was executed on 6 October 2026 and promulgated on 9 October 2026. The lead ministry was the Bundesministerium für Wirtschaft und Energie (Federal Ministry for Economic Affairs and Energy); the regulatory areas affected include aviation, public information technology, economic development, statistics, the Sozialgesetzbuch (German Social Code) and the protection of minors. With the Act, the legislature aims to embed experimental spaces more firmly in Germany. The focus is on the Bundeserprobungsgesetz (BErpG, Federal Testing Act) regulated in Article 1. It entered into force on 10 October 2026. In addition, the omnibus act contains further amendments to various sector-specific statutes. ## Federal Testing Act as a central component ### General framework for regulatory sandboxes The Federal Testing Act is intended to enable authorities to test certain procedural processes in the [enforcement of federal law](https://www.mtrlegal.com/wiki/bundesrecht/) on a time-limited basis in a manner that deviates from the standard process. The concept of a regulatory sandbox is linked to trial spaces that are limited in time and scope and in which new approaches can be tested under controlled conditions. The general testing clause is not addressed to companies or private individuals as direct applicants. Under § 4 para. 1 BErpG, only legal entities under public law, in particular local and regional authorities as well as their authorities and institutions, are entitled to apply, insofar as they enforce federal law. ### No deviation from substantive law The testing options are limited by law. A deviation from substantive law is not permitted under § 3 BErpG. This means that the issue is not a general exemption from substantive statutory requirements, but rather limited deviations within the framework of the testing provided for by law. Excluded, among other things, are tax obligations, levy obligations and reporting obligations in connection with the total social security contribution. These areas therefore cannot be suspended on the basis of the general testing clause. ## Procedure and time limitation ### Decision on the application A decision on an application for approval of a test is to be made within three months. According to the explanatory memorandum to the Act, this period begins upon receipt of the complete documents. The three-month period is structured as a target requirement; according to the explanatory memorandum, failure to comply with it does not trigger any legal consequences. The approval must be limited to a maximum of four years. A one-time extension by no more than a further four years is permissible. The testing therefore remains expressly limited in time. ### Publication before the start of testing The applying authority must publish the scope of the planned testing without undue delay after notification of the approval and before the testing begins. This publication obligation concerns the scope of the intended testing and is intended to create transparency regarding the use of the instrument. The key elements of the general testing clause therefore include in particular: - only certain legal entities under public law are entitled to apply, - the testing concerns the enforcement of federal law, - substantive law may not be derogated from, - certain obligations, in particular in the areas of tax, levies and social security, remain excluded, - the approval must be limited in time, - the scope of the testing must be published before it begins. ## Sector-specific testing clauses and further regulatory areas ### Sector-specific experimental spaces In addition to the Federal Testing Act, the omnibus act also contains sector-specific provisions. Experimental spaces are created or expanded in, among others, the following areas: - healthcare, - protection of minors in the media, - digital administration, - register modernisation, - education sector, - telecommunications sector, - aviation. The individual provisions are each connected to the sector-specific statutes concerned. They should therefore not be understood as a uniform authorisation for all innovation projects, but are tied to the respective statutory framework. ### Extension of sector-specific regulatory sandboxes For regulatory sandboxes based on sector-specific testing clauses, § 7 para. 2 BErpG provides special requirements for extensions. Under this provision, such regulatory sandboxes may be extended no more than twice. The application for extension is deemed approved after one month has expired. This provision differs from the general testing clause, under which approval must be limited to a maximum of four years and a one-time extension by no more than a further four years is permitted. ## Legislative procedure ### From coalition draft to adopted Act The basis of the Act was a coalition draft by CDU/CSU and SPD in Bundestagsdrucksache 21/218 (Bundestag printed paper). The first reading took place on 23 May 2025. The title of the legislative project was changed to “Act to Strengthen Germany as a Location for Innovation and Business through Experimental Spaces” only during the committee proceedings. The Bundeskabinett (Federal Cabinet) adopted the drafting aid for the Federal Testing Act on 6 May 2026. The ministries named as having lead responsibility were the Bundesministerium für Digitales und Staatsmodernisierung (Federal Ministry for Digital Affairs and State Modernisation) and the Bundesministerium für Wirtschaft und Energie (Federal Ministry for Economic Affairs and Energy). ### Deliberation in the Bundestag and approval by the Bundesrat A hearing took place in the Digital Committee on 20 May 2026. The draft was largely supported there, while detailed provisions were also critically assessed. An expert named at the hearing expected only a limited innovation dynamic due to the complexity of application and advocated accompanying measures such as training and advisory services. The Bundestag (German Federal Parliament) adopted the Act on 25 June 2026 in the committee version on [Drucksache 21/6698](https://dserver.bundestag.de/btd/21/066/2106698.pdf). CDU/CSU and SPD voted in favour, Die Linke voted against; AfD and Bündnis 90/Die Grünen abstained. The Act was forwarded to the Bundesrat (Federal Council) on 4 September 2026 as BR-Drucksache 490/26 for approval. The Bundesrat considered it on 25 September 2026 at its 1068th session as agenda item 3 and approved the Act requiring consent on the same day. ## Points of criticism and rejected proposed amendments ### Discussion of objectives and evaluation Further requirements were also discussed during the legislative procedure. A rejected amendment motion by Bündnis 90/Die Grünen on Drucksache 21/6699 provided that, for each completed regulatory sandbox, the Federal Government would have to state whether a permanent legal adjustment had been made. In addition, the failure to make a legal adjustment despite positive results was to be separately justified in writing. Furthermore, the network “Reallabore der Nachhaltigkeit” and the Gesellschaft für Transdisziplinäre und Partizipative Forschung called for improvements in statements issued in June 2026. These related in particular to the express embedding of ecological and social objectives. ### Federal Government reporting obligation The Federal Testing Act contains a reporting obligation. Under § 11 BErpG, the Federal Government must report to the Bundestag on the practical application of the Act three years after its entry into force and every three years thereafter. The first report is therefore to be expected after 10 October 2029. This reporting obligation concerns the practical application of the Act. It does not replace the examination of individual projects required in each case within the statutory limits. ## Accompanying information and networking structures The Regulatory Sandboxes Innovation Portal is being established as a point of contact for advice, information, networking and knowledge transfer. The instrument of experimental spaces thus receives a supplementary structure intended to support exchange and the preparation of knowledge. For companies and investors, it is significant that the Federal Testing Act itself restricts eligibility to apply to certain public-law entities. Nevertheless, experimental spaces in the relevant economic sectors concerned may indirectly become relevant for market participants if public bodies carry out corresponding projects or sector-specific testing clauses are used. ## Assessment for business The Act does not create a general law-free space for innovation. Rather, it introduces a regulated instrument with which testing can be carried out subject to statutory requirements, time limitations and certain transparency requirements. Of particular importance are the distinction between the omnibus act and the Federal Testing Act as well as the differentiation between the general testing clause and sector-specific testing clauses. The restriction of eligibility to apply to certain public-law entities is also a central point of the statutory concept. 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