Monday, January 17

Startups Law: what has changed compared to the original text and what tax advantages will entrepreneurs have in Spain

The Government has approved today what is known as ‘Startups Law’, with a series of measures to try to promote the presence of entrepreneurs and digital nomads in Spain. The text has been validated by the Council of Ministers, after some last minute changes with respect to the draft that was leaked a few months ago, although it still must go through Parliament.

Here we tell you what measures the new ‘Law of the ecosystem of emerging companies’ brings and what advantages it will provide. Not necessarily new entrepreneurs, since the text includes deductions for ‘serial entrepreneurs’, those who have already tried to create a company.

The original text required that the founders had not previously benefited, but the final ‘Startups Law’ will allow them to be accepted up to three times. That is to say, entrepreneurs who have already created other companies before. This is how one of the requests that many had demanded is collected, because precisely in the startup ecosystem the risk is high and there are not a few who end up being successful after several attempts.

What tax advantages does the Startups Law bring?

The first tax measure introduced is the reduction of Corporation Tax and in the Non-Resident Income Tax for 4 years. This will pass 25 to 15% and a postponement of the payment of the tax debt will be allowed without interest or guarantees, for two years.

What is considered a startup? For this, there will be a certification, managed by Enisa and by the National Entrepreneurship Office. The objective is to end up creating a single window with which to streamline Procedures to establish a company, online and without notarial or registration costs. As described by the Government, the period to create a startup will be about 6 hours up to a maximum period of 5 days if they want to make personalized statutes.

Another aspect introduced is the limit of the ‘stock options’, which will be tax-free up to 50,000 euros, compared to the current 12,500 euros and the 45,000 euros initially proposed. It is also added that their taxation will be delayed until the moment they are sold (or due to the company’s IPO).

Are also set Tax deductions of up to 50% for investments of up to 100,000 euros. Initially, it was contemplated to go from 30 to 40%, but finally it will be 50%, during the first five or seven years for biotechnology, energy, industrial and other strategic sectors.

News for digital nomads

One of the government’s goals is to try to attract foreign investment and talent. For it the necessary procedures for obtaining visas will be expedited, specifically for those who come to a Spanish startup or digital freelancers. These new visas will include a reduced tax rate.

The text contemplates that non-resident investors in Spain will only need a NIF, instead of the NIE. In addition, the return of talent is also contemplated. In this sense, the prior non-residence in Spain to access the special visa is reduced from 10 to 5 years.

They hope to have it implemented in the summer of 2022

Sources from the Ministry of Economic Affairs have shown their confidence that this ‘Startups Law’ is finally approved by summer 2022. The deadline is the last quarter of 2022, which is the period in which the European Union has been promised that these reforms would be carried out, as part of the Recovery, Transformation and Resilience Plan.

It is unknown what economic impact these measures will have, since The amount that it will have in the coffers to reduce these tax taxes has not yet been revealed. Although it is part of a series of measures to try to attract investment and talent.

What Juan Luis Hortelano points out, Blinkfire CCO, following criticism of the first draft, various tweaks and tax improvements have been added that appear to have improved the outlook of this law.

Image | Per Lööv
In Engadget | ‘Spain Entrepreneurial Nation’: this is what the founders of startups and investors of the new Government project think