This law finally becomes a tangible rule that affects businesses today. A government bulletin (BOE) published the officially named text on Thursday, setting in motion a framework that the state intends to start applying tomorrow. The move follows its final approval in Congress, arriving just before Christmas and marking the government’s objective to have the law in effect at the start of 2023.
The document clarifies core terms as well as the scope of the policy. It defines what a startup or innovative company means within the public administration context, and it outlines how such entities can qualify for accreditation, as well as the tax incentives and investor access that come with that status.
In practical terms, the framework covers companies with headquarters or principal operations in Spain for up to five years (expanded to seven in certain cases). It targets firms in biotechnology, energy, or industry, or those that have developed proprietary technology entirely in Spain. It specifies that the company should not arise from a merger or spin-off, should not distribute dividends, should not be traded on the stock exchange, and should have 60% of its workforce based in Spain while pursuing an innovative entrepreneurship project.
A startup is deemed innovative when its objective is to solve a problem or to improve an existing situation by creating new or substantially improved products, services, or processes compared to the latest technology. The text promises to provide further clarification, and it acknowledges that developing a technological or industrial solution carries inherent risk, including the potential for failure in technology, process, or business model terms.
financial benefits
Among the key provisions, these companies enjoy a more favorable tax posture. This includes a reduced rate for corporate income tax or for a Non-Resident Income Tax, applying at 15% from the first positive tax base period, with the option to defer payments during the initial two years. In addition, foreign investors can use a taxpayer identification number to participate, and their startup investments can benefit from a 50% deduction on the contributed amount, up to a yearly cap of 100,000 euros.
Officials describe the law as establishing a regulatory framework that aligns with the distinctive features and innovative spirit of the emerging ecosystem. Nadia Kalvino, the First Deputy Head of Government and Minister of Economy, remarked after the text’s final approval that the law completes a renewal of the regulatory process aimed at improving the business environment in Spain. She highlighted that this renewal has already had a positive impact on investment, growth, innovation, and skilled employment. [Source: official government communications and subsequent regulatory analyses]