In 2023, the Startup Law will come into force, which has several tax incentives for investors and entrepreneurs, meaning that they can enjoy up to a 50% tax deduction. This means that they will be able to enjoy up to a 50% deduction of the amount. Do you want to know more? Stay until the end and learn about the new tax incentives for investors this 2023, let’s get to it!
Last December 1, 2022, the Congress approved in a definitive way the Law for the Promotion of the Startup System, better known as the Startup Law. This law aims to establish a specific regulatory framework to support the creation and growth of these emerging companies, do you want to know more about the Startups Law and how it can benefit you? Then this article is for you!
What is the new Startup Law?
On November 3, the Congress of Deputies approved the Startups Law with a different consensus than usual in the Chamber. The new Startups Law BOE passed with 177 votes in favor. It was expected an agile processing in the Senate to approve it in its entirety by the end of the year so that it could enter into force at the beginning of this 2023.
This Law is the Spanish Government’s regulation that seeks to facilitate the creation and development of new technology-based and innovative companies. In addition, it seeks to make the country a reference in terms of entrepreneurship at European level.
There is no doubt that the legal framework is one of the aspects that can most promote the creation of new companies. Consequently, it also boosts the economy.
But how will the government achieve this? Well, through a series of tax incentives, favorable regulations, elimination of bureaucratic obstacles and the relaxation of many of the procedures.
In that sense, the Startup Law is governed by the following objectives:
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What are the main changes proposed by the Startups Act 2022?
Ten months after its arrival in the House, the Startup Law retains its main elements. But, at the same time, it has introduced important novelties such as:
Incorporation of cooperatives to the regime of emerging companies.
If you are a self-employed entrepreneur who wants to take advantage of the benefits of the Startup Law, you will have to set up a Limited Company (SL) or a cooperative. These, thanks to the new amendments, are also an option.
There will be a certifying company and the administrative silence will be positive
The Empresa Nacional de Innovación, S.A. (ENISA) will certify which companies are considered startups and which do not meet the conditions. But now, with the new changes introduced, it will be able to enter into agreements with third party public or private collaborating entities.
Positive administrative silence is also established. In other words, if your company applies to ENISA for certification as a startup and there is no pronouncement from ENISA within three months, this means that the company will obtain a favorable resolution.
Requirements to certify that a company is a startup
The Startup Law goes deeper into different criteria when evaluating the requirements that companies need to be certified as startups. The analysis of the degree of innovation and the scalability of the business model is more detailed.
In addition, criteria such as competence, team training, reliance on suppliers, technological innovation and more will be weighted.
The new Startup Law establishes that graduates of vocational training or higher education will also be able to apply for residency for highly qualified profiles. In this way, the benefits of these may be equated to vocational training studies.
The figure of serial entrepreneurs, i.e., those who have successfully launched a startup before, is recognized. In this case, they are granted the benefits of the Startup Law to the first four companies they create. Thus, the previous limitation of three companies is extended.
In Spain, these entrepreneurs represent 62%, according to the Entrepreneurship Map. For many, this recognition is really important. This is because the more experience and learning they have, the more likely they are to succeed and, in addition, niches in which to innovate can be detected.
Bonus of the quotas
It establishes the rebate of the quotas for self-employed workers of startups and companies that develop multiple activities. That is to say, if you are a freelancer who starts your activity in a startup while working in another company, you will be 100% bonus for the quota during the first three years, to exempt them from having to pay twice.
The business threshold is increased to 10 million euros in order to consider a company as a startup. One of the requirements is that “it does not reach a turnover of more than ten million euros”. However, the original text established a limitation of 5 million euros.
Tax treatment for venture capital entities
A different and specific tax treatment is established for the so-called carried interest, i.e., venture capital entities. They will be taxed as earned income with a 50% tax exemption.
The visa and special tax conditions for international teleworkers, better known as “digital nomads”, are established. The visa has a duration of one year and a special tax regime is contemplated for this type of worker.
Likewise, they will be taxed under the IRNR (Non-Resident Income Tax) and not under the IRPF (Personal Income Tax).
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When will the Startup Law come into force?
Initially, the new regulations were scheduled to come into force in autumn 2022. Now, however, it will not be until January 2023.
Who is affected by the new Law?
Those companies that wish to be governed by this new legislation must comply with the following characteristics:
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Do you want to develop your business idea in the Spanish territory? The Startup Law can be a great option for you. If you need legal or tax advice to achieve the success of your business, in TAS Consulting the best professionals are at your disposal to accompany you every step of the way. Contact us through email@example.com and schedule your free appointment.
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