“The approval of the new Startup Law will mark a turning point in the sector and a turning point for the future”
What is the main news of this recent measure?
Following the approval in the Spanish Congress of Deputies on 2 December 2022 of the Law for the Promotion of the Emerging Companies Ecosystem, also known as the Startups Law, a new horizon is opening up for all entrepreneurs in this country. The aim is to introduce fiscal improvements in order to position itself at the forefront of innovation, as well as to bring about a great revolution of talent in Spain.
This law stands out for being consensual and some of the most relevant aspects to be highlighted are the following: reduction of Corporate Income Tax by up to 15%; deferral of tax debt in justified cases; tax exemptions, taking into account stock options; tax deductions of 50% for annual investments of up to €100,000 for start-ups; improvement of the tax regime for non-resident income tax applicable to investments and “digital nomads”, who will have a residence permit as highly qualified professionals for a period of 3 years; abolition of double social security contributions for entrepreneurs who simultaneously hold an employed job. Furthermore, in addition to the measures mentioned above, we consider it appropriate to comment to the reader that the personal income tax of employees of startups who hold stock options may be taxed at 24% for 5 years, declaring only their assets in Spain.
Improvements expected as a result of the law
By virtue of the above, the Government has proposed financing measures such as the FondICO Next Tech, whose goal is to achieve 4 billion euros in investment, and the National Innovation Company line. All of this is part of the Recovery, Transformation and Resilience Plan, which will allow Spain to align itself with the European standards of excellence of the ‘EU Startups Nations Standard’.
In conclusion, it should be noted that all the points discussed above are aimed at fostering the Spanish entrepreneurial ecosystem, introducing significant tax advantages, which makes Spain a magnet for international talent. In addition, the law removes bureaucratic obstacles and relaxes procedures to promote the creation and investment of technology-based start-ups.