The six main lines of the Startup Law

In Spain today more than 11,000 startups operate, companies that employ 140,000 people and that place our country as the fourth in Europe in number of this type of company, behind the United Kingdom, France and Germany. In this sense, a PwC study on ‘The socioeconomic contribution of South Summit in Spain’ indicates that the Spanish entrepreneurial ecosystem has multiplied its value by 20 in a decade and that will reach 83,000 million euros by the end of 2022.

In this scenario, it is vitally important to have a legal text, the well-known Startups Law, that favors the ecosystem of emerging companies in Spain and that supports startups inside and outside so that they can compete on equal terms; while, at the same time, it opens the door for the arrival of investors to our country in search of the great Spanish talent, creator of the future.

Pol Gomà, founder and CEO of Capboard, a platform designed to manage equity, investors and incentive plans in Europe.

Capboard experts highlight that the bill for the promotion of the ecosystem of emerging companies, approved by Congress and which has a package of 50 measures, is based on 6 pillars:

1. Accelerate the growth of investments in startups to place Spain on a par with leading countries such as Germany and France, especially for startups in early stages. The deduction is increased from 30% to 50% of the amount invested, in addition to increasing the limit from €60,000 to €100,000.
2. Make Spain a paradise for talent, establishing the optimal conditions to attract, retain and develop the best professionals.
3. Promote the scalability of companies, so that entrepreneurs think about growing instead of selling.
4. Invest in an ‘Entrepreneurial Public Sector’, capable of promoting innovation, productivity and social inclusion.
5. Reduces the tax burden for start-ups, such as reducing corporate tax to 15% for the first four years; the possibility of deferring the tax debt or the elimination of the obligation to pay in installments, and also poses an important administrative simplification.
6. It also improves the taxation of the remuneration formulas based on the delivery of shares or participations to their employees, called stock options. Thus, the amount of the exemption is raised from 12,000 to 50,000 euros per year in the case of delivery of shares and the time of taxation is postponed to the time of liquidity This change should reduce the number of Phantom shares plans in Spain, the mechanism used up to now instead of the stock options.

But what will this new law mean for the Spanish economy? Pol Gomà maintains that “The Startup Law was born to give greater legal coverage and economic support to emerging technology-based companies to help build a business ecosystem capable of becoming the engine of modernization of the economy. In short, it is a new law that puts Spain at the forefront in promoting this ecosystem”.

The next step of this Startup Law will be its passage through the Senate, where it is expected to be processed quickly so that it enters into force before the end of 2022.