On Tuesday 6 July 2021, the Spanish Cabinet passed the Report of the Draft Bill on Startup’s Ecosystem Promotion. This project advocates the development of the Spanish startup ecosystem, the stimulation of investments and the interrelation between companies, funded agents and territories.
The Goals set are clearly ambitious, particularly standing out: (i) the promotion and creation of new startups in the Spanish territory; (ii) talent and foreign capital seeking in order to boost and innovate in our entrepreneurial ecosystem; (iii) the establishment of an specific framework for these kind of companies. Throughout these measures it is aimed to regulate and increase flexibility on all the activities that this kind of beginning companies carry out, also in the Fintech area.
Regarding the measures adopted to prevent the brain drain and in order to make Spanish startups shine, it was decided to both include tax benefits, able to promote the establishment of digital hubs in Spain and reduce the tax rate of Corporate Tax (IS) Corporate Taxes of non-residents (IRNR). Reducing the standard rate of 25% to 15% in the first period, in which the tax base is positive, and in the three following ones as far as it remains under the Startup qualification. Along with these measures, it is considered on the one side, the deferment of tax debts of both IS and IRNR in the first tax year in which the tax base is positive and the next one, with no need of guarantees and without delay interests, for a period of 12 and 6 months respectively; and, on the other hand, not only elevate the yearly exemption of €45k to startups, but also increase flexibility on the treasury stocks of LLC’s.
In order to stimulate investments, it has been established that the maximum tax base reduction will be raised from €60k to €100k yearly; increasing also the reduction from a 30 to a 40% and the “recent launch” to 7 years in general terms, being able to extend to up 7 years in certain industries. Along with that, to accelerate bureaucracy and entrepreneurial activity, the obligation to pay splits of IS and IRNR in the 2 years after the tax base turns positive has been suppressed; non-resident investors will be able to obtain their NIF without needing the NIE; and in case a company should desist from its activity they may finish the bureaucracy electronically.
Some other point to be raised is the unified regulation on the prominent Sandbox, testing regulated ecosystems of the financial sector that aim at evaluating the viability of different tech projects; along with the novelties included regarding the “digital nomads”, that is those workers who develop their activities remotely, as they ought to be applied a particular tax regime so that they are imposed the non-residents tax rate, softening their requirements.
The raise of Spanish entrepreneurship based on innovation and the great success that the Spanish startups have acquainted, constitutes the main cause to develop such regulation. Also, job creation, reactivation of rural areas thanks to work-from-home and the educational improvement of the youth in the digital environments. This has placed the digital emerging companies (startups) in the cornerstone of our economy, as it aims at placing innovation at its base.
Last, the aforementioned Act, an unprecedented milestone for the Spanish entrepreneurial ecosystem, is held under the Recuperation, Transformation and Resilience Plan and also covered on the 2025 Spanish Digital Agenda; particularly on Reform 2 of Component 13, regarding the proliferation and promotion of emerging, tech-based companies, which also includes social values as important as gender equality and non-discrimination.
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