Startups in Spain

2021: Spain has developed a law on startups

In mid-December 2021, the Spanish government approved the law on startups and submitted it for consideration to the country's parliament, where it should be adopted or sent for revision. The initiative is expected to facilitate the existence of startups and get rid of bureaucracy.

The authors of the new bill define a startup as a small or medium-sized company opened less than 7 years ago with a turnover of up to 5 million euros. At the same time, the company's shares should not be traded on the stock exchange, and more than 50% of employees should be Spanish citizens.

Spain adopted a law on startups

The bill on startups exempts from taxes options on shares in the amount of up to 50 thousand euros per year (instead of the originally planned 12 thousand euros), it is aimed at reducing the income tax rate from 25% to 15% in the first four years, increasing the deduction base for investments in new companies to 100 thousand euros per year (from 60 thousand euros), while the deduction rate increases from 30% to 50%, and the accounting period is extended. In addition, the bill increases the opportunities for foreigners who live in Spain temporarily and work remotely, in particular, they can apply for a special visa for up to 5 years, and also optimizes the bureaucratic processes associated with registering a company in the country, reduces the financial costs for them.

According to the bill, ministers say that the procedures for creating a company will be "simplified" in one stage and can be carried out online without the need to pay for notary services or registration. Startups will also be able to use the online portal to make business declarations and access other benefits.

The package of amendments to the bill contains a number of other measures to stimulate entrepreneurship - for example, entrepreneurs who simultaneously work as employees in other jobs are no longer required to twice enter data into the social security system. There are also plans to create sandboxes or issue trial licenses in regulated sectors to stimulate the development of new services and MVP (minimum viable product).^[1]

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