Law 28/2022, of December 21, for the promotion of the ecosystem of emerging companies brings important novelties and that is that this new Law on Startups has important administrative novelties and tax incentives for newly created innovative companies.
What is a startup
A startup is a newly created company or one that is less than 5 years old, 7 in some cases, that does not depend on another company or is listed on the stock market, with an innovative nature and an annual turnover of less than 5 million euros.
Administrative and bureaucratic news
One of the main stumbling blocks at the start of an activity are the requirements and procedures necessary to carry it out. Therefore, this regulation includes measures to facilitate them.
Extension of residence permits to entrepreneurs, investors and foreign students and new visa for digital nomads
In order to attract and retain international talent, the entry of foreign entrepreneurs, investors and students is facilitated by creating new visas and modifying the duration of residence permits.
Reduction of bureaucratic requirements for foreign investors
It is no longer necessary to obtain the NIE for foreign investors who contribute capital to an already established or newly created company. The only necessary prerequisite is the electronic application of the tax identification number (NIF) to the State Tax Administration Agency (AEAT)
Licensing of one-year temporary trials and promotion in the creation of controlled environments
With this new regulation, emerging companies that operate in regulated sectors can apply to the competent administrative authority according to their field of activity for a one-year temporary trial license for the development of their operations.
Creation of controlled environments will also be promoted. These are spaces where, except for general regulations and under the supervision of a regulatory entity, the usefulness, feasibility and impact of technological innovations can be evaluated.
Creation of the National Office of Entrepreneurship (ONE)
This body will be in charge of Order and coordinate entrepreneurship support services. In addition, it will be the point of information, help and guidance for entrepreneurs, acting as a one-stop shop for services.
In the economic field, Spanish taxes make the first years of operation difficult for all companies, especially startups.
Improvement in the tax treatment of stock options to remunerate startup workers
Stock options, in Spanish stock options, are a tool whose purpose is to attract and retain talent. Its main use is the remuneration with shares or participations by newly created companies to their workers.
The new Startup Law includes the following tax improvements related to stock options:
- Exemption of 50,000 euros per year.
- Elimination of the obligation to make the offer under the same conditions to all employees.
Regime for expatriates: workers posted to Spain may benefit from the special tax regime
Workers, highly qualified professionals, entrepreneurs and investors, and their families may choose to pay the Non-Resident Income Tax (IRNR) during the change of residence tax period and the following five. In this way, they will be taxed at the general rate of 24% up to 600,000 euros of taxable base.
Establishment of a specific tax treatment for carried interest with the aim of promoting the development of venture capital
The remuneration obtained for the management of venture capital linked to venture capital, known as carried interest, are considered income from work when they are generated directly or indirectly by participations, shares and other rights.
Improvement in the IRPF deduction for the subscription of shares or shares of startups
These improvements apply to private investors and founding partners of emerging companies and consist of an increase in the maximum annual amount of deduction, with a maximum of 100,000 euros and a deduction percentage of 50%.
The initial taxation of start-ups is softened
To help at the beginning of the activity, the fiscal measures approved for emerging companies are the reduction of the type of Corporate Tax and Personal Income Tax, becoming 15% for 4 years and a deferral of the payment of the tax debt for between 6 and 12 months of the first two years.
Bonus in Social Security contributions for founders of startups
Startup founders will not have to pay the self-employment fee during the first 3 years as long as it is listed on the minimum base and is compatible with working for someone else.
The new Startups Law includes administrative and tax improvements to help companies in their entrepreneurship. Among the first we can find elimination of some procedures or the creation of the information office. In relation to taxes, new deductions and bonuses for entrepreneurs are included.
This article is part of our service Business consulting. Visit this section where you will find all the useful information on this topic, including a complete guide on How to start a business in Spain as a foreigner.
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