On December 23, 2022, the law known as the Startup Law came into force (although some tax measures came into force on January 1, 2023), but what are its main new features and what can I do to have my company declared a Startup?
Emerging company or Startup status.
In order 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 the innovative venture.
For the purposes of granting such certification, ENISA will assess, among other aspects, the degree of innovation, the stage of life of the company, the attractiveness of the market in which it participates, its business model, the team or competition in the sector. The following requirements are foreseen for startups, for example: the startup must be newly created (maximum 5 years since its incorporation), and it must develop an innovative entrepreneurial project with a scalable business model.
Once declared as a start-up company and registered in the Commercial Registry, entrepreneurs will be able to benefit from the advantages of the new Law.
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 income is positive) for up to 4 years, deferral of tax debts, and incentives in personal income tax for the creation of companies.
- 100% rebates on the Special Regime for Self-Employed Workers' contribution for self-employed companies that continue to be employed by others.
- Simplification of procedures for foreign investors in order to obtain their identification documents and special tax regime for impatriates with the purpose of attracting foreign investment and retaining talent.
- New treasury stock option to reward the Startup's team or its collaborators, being able to incentivize them, therefore, not only with money but also with a percentage of participation in the company, keeping them motivated and linked to its growth.
- Simplification of the deadlines for the registration of acts and agreements in the Commercial Registry, such as, for example, with respect to 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, to promote the ecosystem of emerging companies, known as Startups Law, but if you are an entrepreneur or investor and want to know all the aspects in detail, as well as how to implement the advantages provided, you can contact us and we will be happy to help you.