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The Spain Startup Act was approved in December 2021 as a law that will help soften the fiscal aspects of startups and promote their growth and creation. Startups are the companies of the moment, projects born in the current technological environment and with innovative proposals, adapted to new demands. Despite the opportunities that these types of companies show, the current legislation does not particularly favor their development. This is because their way of working and organization is different from traditional business models.

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The new startup act

In December 2021, the Council of Ministers of Spain approved the draft of a new startup act, focused on promoting the creation of new companies of this type. This project was submitted to the public hearing since then, in order to receive contributions to agree on a more adequate and complete law for its use.

The main idea is to promote the creation of new startups, as well as the attraction of emerging companies and investors, with the idea of ​​generating a favorable environment for the arrival of new talent associated with this sector, and thus also avoid brain drain towards other countries. All this as part of the Recovery and Resilience Plan to resume the Spanish economy.

What offers the new spanish startup act

Its main point of focus is the promotion of creation of new startups, and it offers a series of tax benefits. In the first instance, it proposes a reduction in the corporate tax rate from 25% to 15% for a maximum of four years. On the other hand, the deduction for those investments made in newly or recently created companies, up to €100,000, goes from 30% to 50%. In addition, the period in which a company is considered to be newly created is raised (which goes from 3 to 5 years for all sectors and up to 7 years for companies in the fields of biotechnology, energy and industry).

Finally, the possibility is included for startups to request the deferral of the corporate tax debt or the income tax of non-residents in the first year in which the tax base is positive and in the following year, with a waiver of guarantees. and without accrual of default interest, for a period of 12 and 6 months, respectively.

More benefits

Additionally, a special visa will be created for digital nomads for up to five years, applicable to both teleworkers and investors of these companies, which will help feed the new startup ecosystem. This action, which will allow them to access the tax advantages established by law, is based on the growing demand for Spanish destinations by this type of worker. Since different Spanish towns and regions, as the Canary Islands, offer an excellent combination of aspects of comfort, climate and leisure, which these remote workers look for when traveling.

Another aspect touched by the law has been that of stock options to buy shares of startups. This modality is common among companies of this type, since they offer a form of variable remuneration to the people immersed in the project. According to what is stated in the preliminary draft of the law, companies may deliver 20% of their capital as part of this format, being exempt from 12,000 to 50,000 euros per year.

To encourage investment in startups, the bill raises the maximum deduction base for investment in newly or recently created companies (from 60,000 to 100,000 euros per year), the type of deduction (which goes from 30 to 40%).

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