Today, December 22, 2022, Law 28/2022 on the promotion of the startup ecosystem, better known as the Startups Law, has been published.

The new regulation is the first to include several specific incentives of a fiscal, corporate and other areas that favor investment, growth and development in the field of entrepreneurship in Spain.

What is a startup?

The Startup Law defines a startup as a newly created company or one that has been in existence for no more than five years. In the case of biotechnology, energy, industrial companies or companies that develop their own technology designed in Spain, the maximum age is seven years.

It also refers to companies with an innovative and scalable project, which do not arise from structural modification operations of other non-“emerging” companies located in Spain; and which have at least 60% of their workforce with employment contracts also in the country.

Likewise, those that have not distributed dividends or are not listed on any regulated market; and that are part of a business group in which the other companies are also emerging companies.

Companies that meet these requirements must obtain the qualification as “emerging companies” from the Empresa Nacional de Innovación SME, S.A. (ENISA) or the entities with which this qualification process is outsourced.

Benefits of the new Startups Law

Impatriates

The self-employed and investors linked to the world of innovation will be able to apply to the impatriate regime. From January, and for five years, their personal income tax may be taxed at 24% and they will only declare their assets in Spain and not globally.

Digital nomads

Thanks to the law, foreigners who telework, or digital nomads, will be able to apply for a residence permit as highly qualified professionals for three years.

Foreign students also have advantages. They will be able to obtain a visa allowing them to work in Spain for two years after finishing their studies.

Tax breaks

Employees of startups that own stock options will not be taxed each year that they keep them under their ownership. They will only be taxed when they sell them.

In addition, the law also extends tax deductions to individuals who invest in startups. The deduction will increase from 30% to 50%; and the first 100,000 euros will be exempt, and not 60,000.

If you have any doubts about the recently approved Startups Law in Spain, call us. At Duguech&Dip we provide you with the legal advice you need to set up your own company in Spain.

Since legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing on this article should be used as a substitute for the advice of competent legal counsel. The content on this article is offered only as information. And does not constitute solicitation or provision of legal advice. You should always consult a suitably qualified lawyer regarding any specific legal problem or matter.

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