Startups Law On July 6, the Council of Ministers approved the bill to promote the ecosystem of emerging companies. Known as the startup’s law, an old claim of  entrepreneurs.

The Ministry of Economy and Digital Transformation, through the Secretary of State for Digitalization and Artificial Intelligence. Thread a public hearing till July 21.

Main Measures Provided For In The Startup Bill

The predominant measures of the draft startup regulation correspond to the tax region. Reducing the taxation of rising corporations from 25% to 15% of corporate tax. Up to a maximum of four years from its creation.

It is deliberate to growth the maximum deduction base for investments in newly or lately created agencies from 60,000 to one hundred,000 euros per yr in an effort to incentivize funding. It is also accompanied by an increase in the type of deduction. Ranging from 30 to 40%, as well as the period during which a company can be considered newly created. In general, it ranges from 3 to 5 years, although in some areas it can reach 7.

The text also includes non-obligation to obtain the foreigner identification number, known as NIE, for non-resident investors. Only those investors and their representatives will be required to obtain tax identification numbers, nothing more.

The text establishes a specific framework for emerging companies (startups), responding to their uniqueness. And the main demands of the sector in order to give global visibility to the ecosystem of emerging companies. Attracting investment and talent.

Startups are define by the Government as companies with less than five years (7 in biotechnology or industry), unlist. Innovative, and with a turnover of fewer than 5 million euros per year.

 It is intended to regulate and perform all the activities that emerging companies have to carry out with the Administration throughout their life cycle. Especially in their initial stages. Due to the amount of paperwork involved in developing an innovative company. Recently created and that penalize it compared to other SMEs in aspects such as taxation or the visa process whose regulations include the new law.

Reactions To The Startups Law

The sector has received the draft with some satisfaction but urges the executive to update the current legislation to adapt it to the current technological and globalized context. Many argue that cutting corporate taxes will not help many startups because the first few years in this type of business often generate losses. On the other hand. It is also consider that it will be difficult to define exactly what a startup is or that the time during which these companies can enjoy the benefits is only four years. While many projects take much longer to see the light of day, in the daytime.

The initial draft establishes a particular framework to sell the introduction and appeal of emerging groups, attracting investment and talent. One of the reforms of the Recovery and Resilience Plan, as highlighted via Nadia Calviño, Minister of Economy.

One of the most essential goals of the Startup Law is to avoid mind drain as plenty as possible and to draw expertise and investment.

Startups also can request the deferral of corporate tax or non-resident tax debt with a period of 6 to three hundred and sixty five days.

Stock alternatives will also be in favor. The amount of the exemption has been growing from 12,000 to 45,000 euros consistent with yr. In the event of shipping of share creations. While the conditions for the era of treasury shares in public restrained agencies are enjoyable.

In addition. It aims to facilitate the creation of a specific tax regime for professionals who telework and have moved within Spanish territory. As well as a specific visa for those who work in the country for a foreign company.