Start-ups

Whether you are coming to launch or invest in a new start-up, are a professional coming to work in a local company or as a digital nomad, this new law offers you a favourable framework:

• Extended and easier visas for entrepreneurs, investors and students: for entrepreneurs, the initial residence permit when applied for in Spanish territory is for up to 3 years and can be renewed for a further 2 years. You can also obtain permanent residence after 5 years. What’s more, some of the procedures and requirements have been simplified. For non-EU investors, initial residence authorisation has been raised from 1 to 3 years. As for students, once they have finished their studies in Barcelona, they will be able to stay and look for work, do internships or start a business project. Find out more on immigration procedures for non-EU citizens.
• New visa for digital nomads: foreign nationals not resident in Spain who wish to live and work remotely for a company outside Spain may apply for a new remote working visa. Further information on the digital nomads’ visa and permit.
• The best stock option scheme in Europe: if you set up your start-up, you will now be able to attract the best talent and remunerate them with stock options. Your employee can receive up to €50,000 per year in stock options without having to pay tax until he or she decides to sell them (up to a maximum period of 10 years from when they receive them) or until the company is floated on the stock exchange. In addition, there is no longer a need for stock options to be offered to all your employees under the same conditions, so you can reward those who are most valuable to your project.
• ·New tax framework for foreign professionals: consider whether you can benefit from the special tax regime for employees living in Spain for work purposes (also known as the “impatriate regime” or “Beckham Law”) to pay income tax at 24% during the year you change residence and for the following 5 years (1+5) and not pay tax on your assets. The eligibility requirements are easier:
  • The number of years before moving to Spain during which you must not have been a tax resident in Spain is reduced from 10 to 5 years. Therefore, both foreign nationals and people with Spanish nationality who have been living in other countries for years can benefit.
  • Previously, this favourable tax regime could only be applied to displaced workers or company managers (with a shareholding of less than 25% of the total). With the change in the law, it can also be applied to other profiles: digital nomads, entrepreneurs, highly qualified professionals providing services to start-ups and company administrators (regardless of the percentage of ownership, unless it is an asset-holding company).
  • The special tax regime can also be applied to family members of the person who is already in the scheme, subject to certain conditions.

Thanks to the new law, investments in Barcelona start-ups and scale-ups are much more attractive:

• Less bureaucracy for international investment: if you are a non-resident in Spain and want to invest in a start-up or scale-up in Barcelona, all you need to do is apply for a tax identification number (NIF) from the Tax Agency. This can be done remotely and you will receive a reply within 10 working days.
• Improved tax incentives for business angels and founding partners of start-ups: the deduction rate has been increased to 50% (instead of the previous 30%) of the investor's personal income tax (IRPF) and the maximum deduction base is now €100,000 (instead of €60,000).
• New regulation and incentives for venture capital: the managing partners of funds that invest in start-ups are taxed more favourably on the profits obtained from the investee companies and also on the profits obtained from managing the fund. Previously, the carried interest (profit share) was taxed at 100% and now it will be taxed at 50%, with no quantitative limit.
• Public-private investment: the €4 billion Next Tech fund is being launched to fund high-tech growth companies.

The new law sets out a whole series of benefits for companies accredited as start-ups:  

• Facilities for setting up a start-up: it will be possible to start a limited liability company with only 1 euro of share capital.
• Rapid entry in the company register: a start-up company with the standard status can be registered in the Company Register within 6 working hours.
• Tax benefits for start-ups:
  • Corporate tax is being reduced from 25% to 15%, for a maximum of 4 years, starting from the year in which the company begins to show positive results.
  • Tax debts may be deferred without interest for late payment during the first two financial years with positive results.
• Commitment to innovation through sandboxes: start-ups operating in regulated sectors will be able to apply for a one-year temporary trial licence to develop their activities.
• One-stop shop for entrepreneurs: the National Entrepreneurship Office (ONE) is being created as the main access point for entrepreneurship. Its website will have all the information on subsidies for start-ups, visas, etc.

In order for a company to be accredited as a start-up, it must meet different conditions. The main ones are the following:

— That the start-up has been recently established (less than 5 years old, or 7 years old for strategic sectors).

— That its head office or permanent place of business is in Spanish territory.

— That it is developing an innovative project with a scalable business model (which must be accredited by the public company ENISA).

— That it is not listed on a stock exchange nor does it distribute dividends.

— That 60% of the workforce has an employment contract in Spain.

— That its annual turnover does not exceed €10 million.