Last July, the Ministry of Economic Affairs and Digital Transformation approved the Preliminary Draft Bill for the Promotion of the Startup Ecosystem, with the aim of helping the creation of business by this type of companies.
Broadly speaking, the advantages that this new law brings to companies that are in the process of creation are as follows:
- Reduction of Corporate Income Tax to 15%.
- Increase of the deduction rate for investment from 30% to 40% and of the maximum deduction base in this section to €100,000 per year.
- Increase of tax exemptions for stock options (shares given to employees as remuneration) from €12,000 to €45,000.
- Incentives for the so-called digital nomads (remote workers residing in Spain).
These are not the only reforms that this law will bring, it will also encourage:
- Training in rural areas
- Co-investment funds to attract private capital
- The financing of collaborative projects
- The multi-year program of aid for entrepreneurship based on innovation, with a gender perspective and integrated into the State Plan for Scientific and Technical Research and Innovation.
And the fact is that Spain is currently not even in the European average in terms of the number of start-ups per million inhabitants, 157 compared to the European average of 190, according to the State Of European Tech report. This shows that there is significant room for improvement in the fields of entrepreneurship culture, public-private collaboration and attracting foreign investment. Thanks to these measures, the number of new companies in Spain is expected to increase.
Startups that wish to benefit from these advantages must be accredited as innovators by ENISA (Empresa Nacional de Innovación), a requirement that must be renewed every year in which these companies benefit from the application of the new regulations.
This Preliminary Draft Law finally defines what a startup is (an independent company less than five years old, reaching up to seven years in the biotechnology, energy and industry sectors), another of the requirements for accessing this aid.
They must also have a permanent head office in Spain, the majority of the workforce must have a contract in the national territory, their creation cannot be the result of a spin-off, and they cannot have been listed or distributed dividends. Finally, they must have an annual turnover of less than 5 million euros and the founder may not have created another company that has benefited from this law in the past.
If you want to know how to obtain this financing contact us, International Venture Consultants has been established in Spain for more than 50 years advising startups and SMEs in all tax, legal and financial areas.