On 23 December 2022, the Startup Law came into force (although some tax measures came into force on 1 January 2023), but which are its main new aspects and what can I do to declare my company as 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 this certification, ENISA will assess, among other aspects, the degree of innovation, the company’s stage of life, the market attractiveness, its business model, its team or competition in the industry. The following requirements are foreseen for Startups, for example: it 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 Startup and registered in the Commercial Register, entrepreneurs will be able to benefit from the advantages of the new law.
But 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% rate of Corporate Tax (provided the taxable base is positive) for up to 4 years, deferrals or tax debts, and incentives in Personal Income Tax for the creation of companies.
- 100% reduction of the Special Regime for Self-Employed Workers’ contributions for self-employed companies that remain employees.
- Simplification of formalities required for foreign investors in order to obtain their identification documents and special tax regime for impatriates with the aim of attracting foreign investment and retaining talent.
- New option on treasury stock to reward the Startup team or its collaborators, being able to incentivise them, therefore, not only with money but also with a percentage of participation in the company, keeping them motivated and linked to its growth.
- implification of deadlines for the registration of acts and agreements in the Commercial Register, for example with regard to incorporation and capital increases, and reduction of notary and registry fees.
- Procedures to encourage innovative public procurement and collaboration between Startups and universities.
These are just some of the advantages contained in Law 28/2022, on the promotion of the startup ecosystem, known as the Startups Law, but if you are an entrepreneur or investor and would like to know all the detailed aspects, as well as how to implement the advantages provided, please contact us and we will be happy to help you.