Support for starting and growing businesses in Spain

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1. It creates the figure of the Limited Liability Entrepreneur: an individual who runs a business can keep business or professional debts from reaching their main home, if the home is worth less than €300,000 (or less after applying the 1.5 coefficient in cities with over one million residents). The limit must be registered in the Mercantile Registry and the Property Registry.
2. It creates the Successive Formation Limited Company, a company that can be set up without the €3,000 minimum capital. In exchange, it must put 20% of profits into a legal reserve, cannot pay dividends below certain thresholds, and payments to shareholders and directors cannot exceed 20% of net assets.
3. It creates Entrepreneur Service Points, physical and online one-stop offices where all the steps to set up a company, start a business and also close it can be completed. Companies with standard bylaws can be formed online, with very short registration deadlines.
4. It regulates the out-of-court payment agreement: a business owner or company with debts of up to €5 million can negotiate with creditors, through a mediator, debt reductions of up to 25% and payment deferrals of up to three years, before going to insolvency proceedings.
5. It sets up tax breaks: a special VAT regime that lets companies pay the tax when they collect payment (for businesses with under €2 million in operations), a 10% corporate income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. deduction for reinvesting profits, and a 20% personal income tax deduction for investing in new or recently created companies.
6. It cuts Social Security contributions for self-employed people starting out (80% reduction for the first six months, then 50% and 30%) and for people with disabilities who register as self-employed. It also makes contributions easier for those who hold both a job and self-employment.
7. It simplifies paperwork and burdens: public administrations must remove one administrative burden for each new one they create, very small companies can handle their own workplace risk prevention, the labor inspectorate's visit book becomes electronic, and the thresholds requiring contractor classification in public procurement go up (works to €500,000 and services to €200,000).
8. It makes visas and residence permits easier for foreign investors, entrepreneurs, highly qualified professionals and researchers. For example, someone investing €500,000 or more in Spanish real estate can apply for an investor residence visa, and permits are decided within twenty days.

Who it affects

• People who want to start a business or are already self-employed: They can limit their liability for their home, set up companies more cheaply and quickly, and pay lower Social Security contributions when starting out.
• Small and medium-sized businesses: They face less paperwork, fewer statistical surveys, easier access to public contracts, and tax breaks for reinvesting profits.
• Foreign investors and entrepreneurs: They can get faster visas and residence permits if they invest in Spain or start business activity there.
• Companies with debts: They can negotiate an out-of-court payment agreement with creditors before going to insolvency proceedings.
• Students and teachers: School curricula must include entrepreneurship, and teachers will receive training on the subject.

Words worth knowing

Emprendedor de Responsabilidad Limitada (Limited Liability Entrepreneur)

An individual who runs a business and, once registered as such, does not have to answer for business debts with their main home (if it is worth less than €300,000).

Sociedad Limitada de Formación Sucesiva (Successive Formation Limited Company)

A type of company created without the usual minimum capital, but with special obligations to protect its lenders.

Criterio de caja (cash criterion)

A system where VAT is paid when the customer pays the invoice, not when it is issued.

Acuerdo extrajudicial de pagos (out-of-court payment agreement)

A negotiation with creditors, with a mediator's help, to defer or reduce debts without going to court.

Registro Mercantil (Mercantile Registry)

A public registry where official information about companies and individual business owners is recorded.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries