Tax breaks and easier paperwork for startups in Spain

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1. The law creates a support framework for emerging companies (startups) and sets the requirements to qualify for its benefits: being new or under five years old (seven in some sectors), being innovative, having a registered office in Spain, not being listed on the stock market, not paying dividends, and having revenue under ten million euros.
2. To access the benefits, ENISAENISA Empresa Nacional de Innovación, a public body that certifies whether a company is an innovative startup. certifies that the project is innovative and scalable, free of charge, with a decision within three months. If it does not answer in time, the certification is deemed granted.
3. Startups pay a reduced corporate tax rate of 15% (instead of the general 25%) for four years, and can defer payment of their tax debts from the first two years without guarantees or late-payment interest.
4. Shares that startups give their workers (stock optionsStock options A form of pay where the worker receives shares or equity in the company instead of only a salary.) are exempt from personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. up to 50,000 euros a year, and those who invest in newly created companies get a 50% income tax deduction, with a maximum base of 100,000 euros.
5. Foreign workers who move to Spain, including digital nomads who work remotely, can pay taxes under the Non-Resident Income Tax if they have not lived in Spain during the previous five years. The law also creates an international telework visa valid for one year and a residence permit for three years, renewable.
6. Creating a company is simplified: a startup can be formed in a single step through its tax identification number, with fully electronic procedures, and foreign investors do not need a foreigner identity number to invest.
7. Startups can test their innovations in regulated sectors through temporary test licenses of up to one year and in controlled testing environments (sandboxes), and public administrations must make it easier for them to take part in innovative public procurement.
8. The law creates the National Forum for Emerging Companies as an advisory body, and the government must submit an annual report on the law's results to the Cortes Generales (Spanish Parliament).

Who it affects

• Entrepreneurs and startups: They can pay less tax, defer tax debts, set up the company with less paperwork, and test innovations in regulated sectors.
• Startup workers: Their shares or equity get tax advantages, and self-employed people with a second job can get a 100% social security contribution rebate for three years.
• Investors, Spanish and foreign: They deduct 50% of their investment from income tax, and foreign investors only need a tax identification number.
• Foreign remote workers (digital nomads): They have a specific visa and residence permit to telework from Spain.
• Public administrations: They must make public procurement easier for startups, create testing environments, and share information about the ecosystem.

Words worth knowing

Startup or empresa emergente

A new or recent, innovative company with a scalable business model that meets the law's requirements.

ENISA

Empresa Nacional de Innovación, a public body that certifies whether a company is an innovative startup.

Stock options

A form of pay where the worker receives shares or equity in the company instead of only a salary.

Digital nomad

A skilled person who works remotely over the internet and can live in any country.

NIF and NIE

NIF is the tax identification number; NIE is the foreigner identity number. The law lets foreign investors invest with only the NIF.

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