Start of main content

Startups Act

| Publications | Corporate Law and M&A

Law for the promotion of start-ups, known as the "Startups Act " and approved by the Spanish Congress on 1 December 2022.

The Starups Law has been approved, introducing important new features, mainly in terms of tax incentives and streamlining procedures to attract investment and talent, with the aim of boosting entrepreneurship. 

Andersen has prepared an analysis of all the key aspects of the Law, including the following points:

Scope of application

The future law will apply to start-up companies ("EEs") which must simultaneously meet the following characteristics:

  • Be newly created or be no more than five years old since their incorporation (seven years in certain cases).
  • They must have their registered office or permanent establishment (PE) in Spain.
  • 60% of the workforce must have an employment contract in Spain.
  • In the case of groups, all the entities in the group must meet the requirements.
  • Not have arisen from a merger, spin-off or transformation of companies not considered as emerging.
  • Develop an innovative business project, and must apply for accreditation as an EE at the Empresa Nacional de Innovación, S.A. (ENISA) and register it in the Mercantile Register. If no response is received within 3 months, positive administrative silence.

Tax incentives

1. Corporate income tax and non-resident income tax (for EEs acting through a PE in Spain).

  • The tax rate is reduced from 25 % to 15 %, applicable to the first tax period in which they have a positive tax base and to the following three, provided that they maintain their EE status.
  • Deferral - without guarantee or interest for late payment - of the instalments of the said taxes during the first two tax periods in which the tax base of the EE is positive (12 and 6 months respectively).
  • During these same periods, the EEs are exempted from the payment by instalments on account of the following taxes.

2. Personal income tax (effective from 1 January 2023).

  • Investments in new or recently created companies.
  • Delivery and exercise of stock options to employees as a form of remuneration (stock options).
  • Special regime for workers posted to Spanish territory (formerly Beckham regime, now digital nomads).
  • Carried interest: Success fee obtained by managers of venture capital entities.

Investment and talent

Attraction of foreign investment: identification requirements for foreign investors.

Foreign persons (individuals or legal entities) wishing to invest in Spanish EE and who do not reside in Spain, must apply to the Spanish State Tax Administration Agency for a tax identification number, with the following new features.

-Individuals will not be obliged, for these purposes, to obtain a foreigner's identity number.

Recruitment and retention of talent: treasury stock in limited liability companies (SL) for the purpose of implementing a remuneration plan.
The general meeting of the company may authorise the acquisition of treasury stock, up to a maximum of 20% of the capital, for delivery to directors, employees or other collaborators of the company, for the sole purpose of implementing a remuneration plan, provided that the following conditions are met:

  • It must be provided for in the articles of association and approved by the general meeting.
  • The shares to be acquired must be fully paid up. 
  • The acquisition must take place within five years of the authorisation resolution.
  • The net assets, after the acquisition, must not be less than the amount of the share capital plus any unavailable legal or statutory reserves.

Formalities applicable to the incorporation of emerging limited liability companies

  • Registration of acts and agreements in the commercial register.
  • Shareholders' agreements.
  • Losses that reduce the net assets.
  • Notary and registry fees and fees for the registration of limited liability companies.

You can read the most relevant changes of the new Startups Act here

End of main content