New Startup Law in Spain

[marioIT]

Spain is paving the way to becoming an entrepreneur-focused nation by 2030 by drafting a startup law as a key to attract investors and foster innovation in technology.

https://techcrunch.com/2021/12/10/spain-draft-startup-law/

• Ministers have agreed to raise the tax exemption on stock option income from €12,000 to €50,000 per year.
• The draft also stipulates that taxation is delayed until the date of settlement — either when the stocks are sold or if the company goes public.
• reduction in Corporate Tax and Non-Resident Income Tax (which drops from 25% to 15%) for four years
• maximum deductible amount for investments in new or recently created companies is also raised (from €60,000 to €100,000 per year), while the deduction rate goes from 30% to 50% and the period for considering a company “recently created” is extended, per the draft adopted by ministers

The reform also looks set to tackle another key complaint of local founders:

• procedures for setting up a company will be “streamlined” into a single step and can be completed online without needing to pay a notary or registry expenses
• Startups will also be able to use an online portal (ENGLISH) to make business declarations and access benefits

also a more complete interview about next 10 years investments plan:
https://techcrunch.com/2021/02/23/spains-ten-year-plan-to-put-startups-in-the-economic-driving-seat/

 

[Martin Everson]

The low thresholds are suitable for those starting a tech Kebab kiosk. Don't fall for this Spanish tax trap.The last place you ever want to be as an entrepreneur is anywhere near Spain. Nothing sounds attractive in those links unless your a very small time entrepreneur. I mean reduction in corporate tax for first 4 years is a joke. Most innovate businesses are not profitable in first 4 years anyway...lol.

 

[Untangle]

Agreed. This is totally useless. Jeez why I need to type in 10 words.

 

[legrant]

As Martin said, stay away from Spain unless you want to pay loads of taxes and get into trouble with the taxman every now and then.

 

[JackAlabama]

Spain is paving the way to becoming an entrepreneur-focused nation by 2030 by drafting a startup law as a key to attract investors and foster innovation in technology.

https://techcrunch.com/2021/12/10/spain-draft-startup-law/

• Ministers have agreed to raise the tax exemption on stock option income from €12,000 to €50,000 per year.
• The draft also stipulates that taxation is delayed until the date of settlement — either when the stocks are sold or if the company goes public.
• reduction in Corporate Tax and Non-Resident Income Tax (which drops from 25% to 15%) for four years
• maximum deductible amount for investments in new or recently created companies is also raised (from €60,000 to €100,000 per year), while the deduction rate goes from 30% to 50% and the period for considering a company “recently created” is extended, per the draft adopted by ministers

The reform also looks set to tackle another key complaint of local founders:

• procedures for setting up a company will be “streamlined” into a single step and can be completed online without needing to pay a notary or registry expenses
• Startups will also be able to use an online portal (ENGLISH) to make business declarations and access benefits

also a more complete interview about next 10 years investments plan:
https://techcrunch.com/2021/02/23/spains-ten-year-plan-to-put-startups-in-the-economic-driving-seat/

Not entirely sure if that is still a thing now, but they should do away (or cut it by 95%) with that silly monthly 300 Euro social security contributions which you have to pay from the start if you own your own company / self-employed for a small venture.
When I last looked into Spain, that was the major showstopper given the fact that is almost as high as a rental there even in the somewhat bigger cities.

 

[legrant]

Not entirely sure if that is still a thing now, but they should do away (or cut it by 95%) with that silly monthly 300 Euro social security contributions which you have to pay from the start if you own your own company / self-employed for a small venture.
When I last looked into Spain, that was the major showstopper given the fact that is almost as high as a rental there even in the somewhat bigger cities.

You can pay up to 1241 Eur

 

[JackAlabama]

You can pay up to 1241 Eur

When you make money? But they have a floor which is the 300euro/month even if you make 0.

 

[legrant]

When you make money? But they have a floor which is the 300euro/month even if you make 0.

Yes, the minimum is 284 Eur per month, and the maximum is 1241

 

[Pembroke]

I fully understand the scepticism but at first sight it could potentially be interesting for digital nomads. This article seems to suggest they could open the door to be treated as a non-resident for up to 5 years as a digital nomad (i.e. akin to the current Beckham Law which now is not suitable for entrepreneurs but aimed at employees). Guess we have to wait and see as it sounds to good to be true. 'Digital Nomad visa' and tax breaks: How Spain wants to attract remote workers - Olive Press News Spain

 

[Martin Everson]

I fully understand the scepticism but at first sight it could potentially be interesting for digital nomads.

I don't think anyone who calls themselves a digital nomad should consider entangling their tax affairs with Spanish tax system?

P.S The Spanish tax system prevents the average person from daring to try to become rich. This will be nothing but a tax trap for the unsuspecting.

 

[Silvio]

I don't think anyone who calls themselves a digital nomad should consider entangling their tax affairs with Spanish tax system?

P.S The Spanish tax system prevents the average person from daring to try to become rich. This will be nothing but a tax trap for the unsuspecting.

100000% correct and I can't stress this enough.

I know regular people that are not even entrepreneurs that made the mistake of moving to Spain and got severe issues with the tax offices and had to take these issues to court.
Avoid Spain at all costs, visit for a vacation but never ever register\move there officially.

 

[zontex]

Interesting, I know one Russian guy who lives legally in Spain with his family, he has his own car repair business there for many years now.
He has YT channel too.

Have to ask him how he handles the tax stuff. Is it really so bad.

 

[JohnLocke]

P.S The Spanish tax system prevents the average person from daring to try to become rich. This will be nothing but a tax trap for the unsuspecting.

Similar to some other countries in Scandinavia and the rest of the EU - they don't want anyone to be rich.

 

[Konstanz]

I see no point for a digital nomad registering themselves in Spain. You can register as remote worker in UAE and enjoy 0% tax

 

[Martin Everson]

This is a good read on Spanish tax system below. Seriously you don't want to die rich in Spain where estate tax can reach 81.6% . It's a complex tax hell hole.

https://taxfoundation.org/tax-competition-spain-europes-tax-hell/

 

[legrant]

Interesting, I know one Russian guy who lives legally in Spain with his family, he has his own car repair business there for many years now.
He has YT channel too.

Have to ask him how he handles the tax stuff. Is it really so bad.

90% of medium/big Spanish YouTubers have gone to Andorra in the last couple of years. Most Spanish entrepreneurs with online businesses have gone to Andorra too. Spain is only good to retire and enjoy good weather, food, etc. Another risk in Spain is the government, which may f**k your whole business from one day to another, and it also has a failing economic system that will collapse within 10 years. Wait a couple of years till there are new elections, and maybe then things will change, but as of right now, stay as far as possible.

 

[Pembroke]

90% of medium/big Spanish YouTubers have gone to Andorra in the last couple of years. Most Spanish entrepreneurs with online businesses have gone to Andorra too. Spain is only good to retire and enjoy good weather, food, etc. Another risk in Spain is the government, which may f**k your whole business from one day to another, and it also has a failing economic system that will collapse within 10 years. Wait a couple of years till there are new elections, and maybe then things will change, but as of right now, stay as far as possible.

Yes I read this as well. But the headache issues with regard to Spanish tax are related to normal resident status. If you can get in the future the 'Beckham Law' treatment i.e. a 5 year non-resident treatment as a digital nomad entrepreneur working for your own company outside Spain, I think it can be quite attractive and a good alternative for Portugal. I guess your company will have to be in the list of countries that are not considered tax havens but EU countries should qualify. Yes for a 0% tax you can move to the Middle East but that doesn't really appeal to me in terms of lifestyle.

 

[qwerty84]

Yes I read this as well. But the headache issues with regard to Spanish tax are related to normal resident status. If you can get in the future the 'Beckham Law' treatment i.e. a 5 year non-resident treatment as a digital nomad entrepreneur working for your own company outside Spain, I think it can be quite attractive and a good alternative for Portugal. I guess your company will have to be in the list of countries that are not considered tax havens but EU countries should qualify. Yes for a 0% tax you can move to the Middle East but that doesn't really appeal to me in terms of lifestyle.

I read into the law, and although Spain is presenting it as being a tax benefit for digital nomad "entrepreneurs", in line with the current rules of the Beckham Law you (i) need to be employed and (ii) cannot hold a share interest larger than 25% in the employing company. In other words, self-employed cannot apply the non-resident regime. Totally useless. Anyone heard differently?

 

[Pembroke]

I read into the law, and although Spain is presenting it as being a tax benefit for digital nomad "entrepreneurs", in line with the current rules of the Beckham Law you (i) need to be employed and (ii) cannot hold a share interest larger than 25% in the employing company. In other words, self-employed cannot apply the non-resident regime. Totally useless. Anyone heard differently?

As I mentioned we are talking about future changes to the Beckham Law . The current rules are for employees as I had mentioned in my earlier post in this thread.
It's all wait and see and the devil might be in the detail but the ministry itself at least said they are planning to include digital nomads in the Beckham Law in the future. It's not difficult to find articles about it:
https://www.theolivepress.es/spain-...ks-how-spain-wants-to-attract-remote-workers/https://www.thelocal.es/20211211/spain-to-cut-taxes-for-digital-nomads/https://www.spainenglish.com/2021/1...international-workers-and-foreign-investment/Summer 2022 timing for the moment.

 

[qwerty84]

As I mentioned we are talking about future changes to the Beckham Law . The current rules are for employees as I had mentioned in my earlier post in this thread.
It's all wait and see and the devil might be in the detail but the ministry itself at least said they are planning to include digital nomads in the Beckham Law in the future. It's not difficult to find articles about it:
https://www.theolivepress.es/spain-...ks-how-spain-wants-to-attract-remote-workers/https://www.thelocal.es/20211211/spain-to-cut-taxes-for-digital-nomads/https://www.spainenglish.com/2021/1...international-workers-and-foreign-investment/Summer 2022 timing for the moment.

I actually have read the draft law... see attached. It ONLY applies to employees, not self employed. The publications are misleading.