Scope of application
To companies that meet the following characteristics:
- Be newly incorporated or have been in existence for a maximum of five years (seven years in certain cases)
- Have its registered office / head office or permanent establishment (PE) in Spain
- In the case of groups, all entities in the group must meet the following requirements
- Not having arisen from a merger, spin-off or transformation operation
- Be innovative, and must apply for accreditation as an EE at the Empresa Nacional de Innovación, S. A. (ENISA), and be registered as innovative startup in the national company house
Tax incentives
– Corporate income tax and non-resident income tax (for EE’s acting through PE’s in Spain):
- The tax rate is reduced from 25% to 15%, applicable to the first tax period in which they have a positive taxable income and up to the following three years, provided that they maintain the EE status.
- Deferral -without guarantee or interest for delay- of the installments of said taxes during the first two fiscal years in which the taxable income of the EE is positive (12 and 6 months, respectively).
- In these same periods, the EEs are exempted from the payment by installments on account.
– Personal income tax (effective from January 1, 2023):
- Investments in new or recently created companies.
- Delivery and exercise of stock options to employees as a compensation formula (stock options).
- Special regime for workers moved to Spanish territory (formerly Beckham regime, today digital nomads).
- Carried interest: Success fee obtained by venture capital managers.
Investment and talent
Foreign individuals (individuals or legal entities) who wish to invest in Spanish EE and do not reside in Spain, must apply to the Spanish State Agency of Tax Administration for a tax identification number, with the new features detailed below.
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Individuals are not required, for these purposes, to obtain a foreigner’s identity number.
The representative applying on behalf of Companies or unincorporated entities of foreign nationality shall:
- Be assigned a tax identification number;
- The power of attorney may be evidenced in a notarial document or in a mandate contract with representation in which the acceptance of the fiscal representation is expressly stated;
- And if the notarial document has been issued by a foreign notary, it will not be required to adapt its content to the Spanish legal system.
Talent recruitment and retention: treasury stock in EEs that are limited companies for the purpose of executing a compensation plan
The general meeting of the company may authorize the acquisition of its own shares, up to a maximum of 20% of the capital, to be delivered to directors, employees or other collaborators of the company, for the sole purpose of implementing a compensation plan, provided that the following conditions are met:
- It must be provided for in the bylaws and approved by the general meeting.
- The shares to be acquired must be fully paid up.
- The acquisition must take place within five years of the authorization agreement.
- The net worth, after the acquisition, must not be less than the share capital plus unavailable legal or statutory reserves.
Formalities applicable to the incorporation of emerging limited liability companies
- Registration of acts and agreements in the Spanish Company House
- Shareholder’s agreements
- Losses that reduce shareholders’ equity
- Notary and registry fees and fees for the registration of limited liability companies
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