New Startups’ Law
The Law for the promotion of the startup ecosystem (better known as the Startup Law, available here) has just been published in the Official State Gazette (BOE). The law entered into force on 23 December 2022.
The law establishes certain advantages from which “startups” can benefit. But what is a startup for the purposes of the law?
What is a “startup” for the purposes of the Law?
The requirements that a company must meet in order to be accredited as an “emerging company” are as follows:
- • Be a newly created company or be no more than 5 years old since registration in the Commercial Registry (this period is extended to 7 years in the case of companies in biotechnology, energy, industrial and other strategic sectors or which have developed their own technology, designed entirely in Spain).
- Not have arisen from a structural modification of a startup company.
- Not distribute or have distributed dividends.
- Not be a listed company.
- Have its registered office, registered office or permanent establishment in Spain.
- Have 60% of the workforce with an employment contract in Spain.
- Develop an innovative entrepreneurial project with a scalable business model.
How to take advantage of the benefits of this Law?
To be certified as a startup for the purposes of the Law, companies must be certified by ENISA (a public company that supports entrepreneurship), which will assess whether a given company meets the requirements of the Startups’ Law. The procedure will be developed by an Order to which we will surely dedicate an additional post.
What benefits are granted to “startups”?
The main measures included in the Startups’ Law are as follows:
Tax measures
- Corporate Income Tax at a reduced rate (15%) for up to 4 years.
- Possibility of deferring payment of corporate income tax for the first two tax periods in which the tax base is positive.
- • The taxation of stock options is improved.
- The deduction for investment in new or recently created companies (IRPF) is increased.
- A more favourable tax regime is established for individuals who move to Spain to work or start up a business.
Corporate measures
- Startup companies are exempted from incurring dissolution due to losses until 3 years have elapsed since their incorporation.
- The company’s treasury stock is made more flexible, allowing start-ups to acquire up to 20% of their own share capital for the purpose of implementing a remuneration plan.
Measures regarding the Commercial Registry
- • The registration of startups and their corporate acts is streamlined.
- Notary and registry fees are reduced.
- The registration of shareholders’ agreements and the registration of clauses in the articles of association that include an ancillary obligation to subscribe to the provisions of shareholders’ agreements are permitted.
- The entry and stay in Spain of foreigners for reasons of economic interest and/or entrepreneurs is facilitated.
- • International teleworking is facilitated.
- • Foreign investors who do not reside in Spain and who are going to invest in a start-up company are exempted from the obligation to obtain a NIE.
Do you want to know more? Do not hesitate to write to us: info@avlaw.es.
