The Spanish government has agreed on the details of a startup bill – passing the baton to parliament to debate and possibly amend the plan ahead of a vote to turn it into law.
The Council of Ministers announcement the adoption of the draft text today which, according to her, contains important measures to reduce red tape and remove bureaucratic obstacles to the creation and investment in startups in Spain.
The package also targets reforms to stock options and visa access in a bid to make the country a more attractive place for entrepreneurs and digital talent.
In one Press releasethe Spanish government said the incentive package includes what it touted as “the EU’s best treatment for stock option returns”.
Ministers agreed to increase the tax exemption on stock option income from €12,000 to €50,000 per year.
The draft also stipulates that taxation is delayed until settlement date – either when the shares are sold or if the company goes public.
Other notable tax measures include a reduction in corporation tax and non-resident income tax (from 25% to 15%) for four years – which aims to tackle a major hurdle, given that startups typically don’t focus on booking revenue in their early years (yet under current rules they’re expected to pay the same tax rate as startups). more established companies).
The maximum deductible amount for investments in new or recently created companies is also increased (from €60,000 to €100,000 per year), while the deduction rate is increased from 30% to 50% and the period for considering a “recently created” company is lengthened. , according to the draft adopted by the ministers.
The reform also appears set to tackle another key complaint from local founders: the cost and bureaucracy of setting up a startup in Spain – which has led some founders to set up their business elsewhere in Europe, even ‘they then build their product from offices in the countryside.
According to the bill, ministers say the procedures for setting up a company will be “streamlined” into one step and can be completed online without having to pay notary or registry fees.
Startups will also be able to use an online portal to make business declarations and access benefits, according to the release.
Olivier Plante, co-founder of local keyboard startup ThingThing – which develops Fleksy (a keyboard SDK company) from offices in Spain – said he felt compelled to incorporate his startup in the UK. United in 2015 – due to relative costs.
“We were like three years without earning a dime,” he explains. “The first few months we needed a lot of money to get started, register, shares, banks, notary (they are parasites tbh)…etc. That’s why we founded the company in the UK — it costs us 70 GBP instead of around 5,000 EUR in Spain.
Plante hailed the reform package – saying that for him the two most important elements are simplifying the setup of startups and reducing corporate tax rates in the early years.
The current approach is essentially to “kill the entrepreneurial spirit from day one,” Plante says, or else limit the pool of possible founders to those who can save up enough money to get started. “Often, real entrepreneurs have less means,” he noted, adding, “And Spain does not allow the poor to get rich at source.”
A local association of startups, startups association españaalso welcomed the adoption of the draft text by the Council of Ministers – although he said he was still waiting to see all the details of the full text once it is published.
He also said he hopes Parliament will go even further in improving the proposal – suggesting it should further increase the number of years for a company to be considered a startup; and – potentially (assuming the project did not) – make changes to the throttling requirements (e.g. a startup must have 60% staff in Spain to be eligible; or a turnover of ( only) up to 5 million euros).
The association has given the fullest praise to the planned increase in the tax deduction for start-up investors – calling it “great news that puts us on a par with other successful ecosystems”.
The reform package contains a number of other measures to encourage entrepreneurship – such as entrepreneurs who work simultaneously as employees at another job are no longer required to contribute twice to the social security system (which discourages starting); and plans to establish sandboxes or trial licenses in regulated industries to foster the development of new services and MVPs.
Although it remains to be seen how parliament can alter specific details.
In terms of timing, a government source told TechCrunch they believe the law will be approved in the first half of 2022 – however, they noted the timeline allows until the end of the year.
On the funding front, the Spanish government has an investment target of up to €4 billion to be directed towards stimulating the growth of startups, including leveraging European Union funding for recovery coronaviruses.
For an in-depth analysis of the country’s 10-year plan for startup reform, check out TechCrunch’s interview with Francisco Polo, the Spanish high commissioner in charge of implementing the entrepreneurship strategy from earlier this year.