On 23 December 2022, the so-called Startups Law entered into force (although certain tax measures came into effect on 1 January 2023), but what are its main new features and what can I do to get my company certified as a startup?
Startup status.
To benefit from the rules contained in this new law, the startup will need to obtain the status of an emerging company, and to this end, entrepreneurs must apply to ENISA for certification of innovative entrepreneurship.
For the purpose of granting such certification, ENISA will assess, amongst other aspects, the degree of innovation, the life cycle stage of the company, the market traction in which it operates, its business model, the team or the competition in the sector. Requirements for start-ups include, for example, the following: that the start-up is newly created (maximum of 5 years since its incorporation), and that it develops an innovative entrepreneurial project with a scalable business model.
Once declared as a start-up and having registered this status in the Mercantile Register, entrepreneurs will be able to benefit from the advantages of the new Act.
What are these advantages?
Among the benefits included in the new law, we could highlight the following:
- Tax advantages such as, for example, the 15% Corporate Income Tax rate (provided that the taxable base is positive) for a period of up to 4 years, deferrals of tax debts, and personal income tax incentives for business creation.
- 100% rebates on the Special Regime for Self-Employed Workers contribution for corporate self-employed workers who continue to be employees.
- Simplification of procedures for foreign investors to obtain their identity documents and the special tax regime for inbound expatriates in order to attract foreign investment and retain talent.
- New treasury stock option to reward the startup team or its collaborators, allowing them to be incentivised not only with money but also with a percentage share in the company, thereby keeping them motivated and tied to its growth.
- Simplification of the registration deadlines in the Commercial Register for acts and resolutions, such as regarding incorporation and capital increases, and reduction of notary and registry fees.
- Procedures to promote innovative public procurement and collaboration between start-ups and universities.
These are just some of the advantages contained in Law 28/2022 on the promotion of the start-up ecosystem, known as the Startups Act, but if you are an entrepreneur or investor and want to know all the details, as well as how the planned benefits are implemented, you can get in touch with us and we will be delighted to help you.