The Spanish parliament recently approved a new law regulating startups, which will come into effect in the coming months. The law is aimed at making it easier for startups to get started and grow in Spain, by providing them with certain benefits and simplifying some administrative procedures. It is thought that as a result of implementing this law to promote innovative entrepreneurship, Spain will be among the most attractive countries for the creation of startups.
Some of the main points of the new law are as follows:
- Startups will be able to obtain a special “startup visa” in order to attract foreign talent.
- They will be exempt from certain taxes, such as the “patent box” tax on intellectual property.
- They will be able to benefit from simplified administrative procedures.
The Startup Visa
One of the most important aspects of the new law is the so-called “startup visa”. This is a special type of visa that allows startups to attract foreign talent in order to boost their growth. The draft law establishes that companies will be considered startups if they are innovative, newly created or have been in existence for up to five years in general, or seven years in the case of biotechnology, energy and industrial companies. There will also be considerations for startups if they have their registered office, permanent establishment and the majority of their employment in Spain. In addition,[CM1] considerations will be made if they have not distributed dividends and are not listed, and if they have a turnover of up to five million euros.
The requirements for the startup visa are as follows:
- The startup must be registered in Spain.
- It must have a minimum capital of €50,000.
- It must have a business plan and a team of at least two people.
- It must have been operational for less than three years.
If these requirements are met, the startup will be able to apply for the visa and will then have a period of six months to find suitable candidates. Once the candidates have been found, they will be able to apply for the visa and, if successful, will be granted a residence permit for two years.
Another important aspect of the new law is the introduction of tax benefits for startups. One of these is the so-called “patent box” tax, which is a tax on intellectual property. This tax will be abolished for startups, which means that they will be able to keep more of their profits.
Under this initiative, employees will see improved treatment of forms of remuneration based on stock options. It also eliminates the double Social Security contribution for three years for those entrepreneurs who simultaneously hold a job as an employee.
Additionally, to attract so-called digital nomads (entrepreneurs and teleworkers who move to Spain), a more streamlined procedure is established for them to obtain a visa and residency, as well as a special tax regime. Spaniards who have been non-residents in Spain for at least five years are also included in this measure.
Advantages for Digital Nomads and Remote Workers
As a result of the implementation of the startup bill, foreigners from all over the world will reap important benefits. All those who are considered digital nomads or who have moved to Spain to work remotely for a foreign company will have much easier access to Spanish residency status.
They will be able to apply directly for the digital nomad visa. This visa will be a rolling 2-year type visa as long as the initial requirements continue to be met.
Furthermore, the government also plans to create a specific residence permit for people working in a foreign company located in Spain, including those from the audiovisual sector.
The new startup law will allow for greater flexibility and easiness in the process of legally creating a new startup.
An important note to emphasize is that notary and registry fees will be eliminated if the company is incorporated electronically. Additionally, it will be possible to register the company in the Mercantile Registry in around 6 hours using standard statutes, or 5 working days in the rest of the cases.
Furthermore, during the first 3 years, the startup will be exempt from the cause of dissolution for losses related to or for generating equity imbalances.
The new law on startups is a positive step that will make it easier for startups to get started and grow in Spain. The main benefits of the law are the startup visa, the tax benefits and the access to public funding programs.
In case you have any potential doubt referring to the New Startup Law in Spain, or you are thinking about moving or creating your startup in Spain, in eres we would be happy to help you resolving all your doubts. At the same time, once the law is in force, let our tax consultancy and immigration consultancy experts help you with any of your needs!