“Digital nomad” Spanish Startups Law

Digital nomad Ley de Startups de España
January 20, 2023
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On December 22, 2022, the Government finally approved the final text (BOE Law 28/2022) to promote the ecosystem of emerging companies, more commonly known as the “Startup Law”. The official name of the Startups Law is “Law to promote the ecosystem of emerging companies”.

Its main purpose is to establish a specific regulatory framework to support the creation and growth of emerging companies.

What are the main objectives of the Startup Law?
The objective of this new law is to promote innovative entrepreneurship and everything that implies:
· Promote the creation, growth and relocation of emerging companies in Spain, especially micro, small and medium-sized entrepreneurial companies, also establishing the conditions that favor their internationalization capacity.
· Attract talent and international capital for the development of the Spanish ecosystem of emerging companies.
· Stimulate public and private investment in emerging companies.
· Promote collaboration and relationships between SMEs, large companies, financing agents and education centers.

Who exactly is the new digital nomad visa for?
Until now many foreigners had a problem. Although it is true that they were not going to develop any type of economic activity in Spain, on many occasions they wanted to continue working for a foreign company or offer their services to international clients while enjoying the Spanish lifestyle.
The non-profit residence was the option that best suited these cases, but it had the drawback that from the outset it did not allow any type of economic activity to be carried out.
But all these foreigners will now have it very easy, because with the new visa under the startup law they will find the perfect way to regularize their situation.
A 3-year residence permit that you can apply for directly from Spain as a tourist or from your country of origin at the Spanish consulate.

You can benefit from this visa and its enormous tax advantages as long as:
· You work for a company that allows you to work remotely from Spain (for someone else)
· You are a self-employed person (self-employed professional) with clients abroad
· You get your income from different online sources outside of Spain

What requirements are needed to be considered as a Startup?
This law does not affect all newly created companies, since to be considered a startup, a new company must meet a series of requirements. A startup is a newly created company with great growth potential that goes to market quickly in search of financing.
The requirements to be considered a startup within the Spanish Startup Law are:
· Companies with an innovative value proposition, generally digital. That is, companies that develop new or improved products or services.
· Newly created companies or with an age of up to 5 years in general or 7 years for strategic cases, such as biotechnology, energy and industrial companies.
·        Companies with headquarters or registered office permanently established in Spain and with 60% of the workforce hired in Spain.
· Companies that have not distributed dividends and are not listed on any stock market.
· Companies with an accumulated turnover of a maximum of 10 million euros.
What are the main keys of the new Law of Startups of Spain?
The Startups Law has a series of flexible measures that facilitate the creation of emerging companies.

1) Administrative agility

The actions that will be taken to streamline administrative procedures are:
· Establish a single and telematic window for the certification of these companies.
Eliminate notarial and registry fees in the case of limited partnerships and companies that are incorporated electronically.
· Eliminate the requirement to obtain a foreign identification number for non-resident investors, requiring only the NIF.
· Facilitate obtaining a visa and residence for highly qualified workers and non-resident Spanish workers for at least 5 years.

2) Tax attractions

In order to encourage investment and attract international talent, the Startup Law contemplates the following measures:
· Reduction of the tax rate on Corporation Tax and Non-Resident Income Tax, from the general rate of 25% to 15% in the first four years from when the tax base is positive.
· Raising the amount of the tax exemption for options on stock options from 12,000 to 50,000 euros per year and making the conditions for generating treasury stock more flexible in emerging companies, preventing them from incurring causes of dissolution due to losses until 3 years have elapsed from its constitution.
· Extension of the maximum deduction base for investment from 60,000 to 100,000 euros per year and the type of deduction from 30 to 50%.
· Extension of the period in which a recently created company is considered, which rises from 3 to 5 years in general or 7 years for companies in certain sectors.
· 100% discount on the Special Self-Employment Regime quota for self-employed companies who continue to be employed by others.
· Possibility to request temporary trial licenses for one year.
· Elimination of the obligation to make installment payments of Corporate Tax and Non-Resident Income Tax in the 2 years after the one in which the tax base is positive.
· Digital nomads will be able to reside and work in Spain for 5 years and will have the possibility of benefiting from a special tax regime and paying Non-Resident Income Tax.

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