Startups Law: less bureaucracy and tax burden

19 January, 2023
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Fiscal, Commercial
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Patricia Fernández


With the entry into force of Law 28/2022, of December 21, on the promotion of the startup ecosystem, better known as the Startups Law, many of the measures that were analyzed in the post-dated April 21, 2022, regarding the Draft Law, and which we update below, are put into effect.

To whom does the Startups Law apply?

The Startup Law is applicable to startups that simultaneously meet the following conditions, the fulfillment of which must be evaluated and certified by ENISA (Empresa Nacional de Innovación S.A.):

1. Be newly created or, if not newly created, that no more than five years have elapsed since the date of registration in the Mercantile or Cooperatives Registry of the public deed of incorporation, in general, or seven years in the case of biotechnology, energy, industrial and other strategic sectors or companies that have developed proprietary technology designed entirely in Spain.
2. Not to have arisen from a merger, spin-off or transformation of companies that are not considered emerging companies.
3. Not distribute or have distributed dividends, or returns in the case of cooperatives.
4. Not to be listed on a regulated market.
5. To have the registered office, registered office or permanent establishment in Spain.
6. To have 60% of the staff with labor contracts in Spain.
7. Develop an innovative entrepreneurial project with a scalable business model.
8. In the case of belonging to a group of companies, the group or each of the companies that comprise it must meet the above requirements.

What innovations have been introduced to simplify and speed up company incorporation procedures?

The qualification and registration of the incorporation will be carried out within 6 hours if standard bylaws are used, or within 5 days if personalized bylaws are chosen.

The necessary formalities to carry out the registration, as well as the tax and Social Security formalities required for the start of activity may be carried out by means of the Single Electronic Document.

The registry and notary fees are reduced, and the exemption of the publication expenses in the BORME is introduced.

The obligation to obtain the NIE for non-resident investors in Spain is eliminated, being sufficient with the application for the NIF, which can also be managed telematically.

What are the new developments in tax and social security matters?

The tax rate for corporate income tax and nonresident income tax is reduced to 15% during the four years following the first positive taxable income.

The deferral of the payment of corporate income tax and nonresident income tax debts during the first two periods with a positive taxable income is introduced.

The obligation to make installment payments of Corporate Income Tax and Non-Resident Income Tax in the two years following the first positive taxable income is eliminated.

The maximum deduction base for investment is increased to 100,000 euros per year, and the deduction rate is increased to 50%.

The amount of the tax exemption for stock options is increased to 50,000 euros per year.

The double contribution to the Social Security of the entrepreneur who works simultaneously as an employee (pluriactivity) during the first three years is eliminated, and for this purpose 100% of the contribution corresponding to the minimum base established in general in the special regime for self-employed workers or self-employed workers is subsidized.

What is new in relation to the management of the company?

Possibility of acquiring own shares, up to a maximum of 20% of the capital, to be delivered to directors, employees or other collaborators, for the purpose of executing a compensation plan.

Exemption from filing for dissolution in the event of losses that reduce the net worth to less than half of the capital stock, within three years of its incorporation (provided that the conditions for filing for bankruptcy are not met).

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