Exactly one year has passed since a legal framework was published by Spain to meet the needs of innovative ventures. Since then, more than a thousand companies have requested this service, with Enisa as the public investment vehicle issuing the certificates that attest to their status. This seal opens doors to various advantages, including tax benefits and incentives for individuals embracing the new rules. The most consequential benefits include a clearer definition of startups, reduced corporate tax burdens, social security incentives, and visa options for foreign entrepreneurs.
Definition of startup
With the law in force, startups can apply for a certificate that confirms their status. This credential boosts credibility with potential investors and signals the startup’s innovative character and growth potential. The law defines a startup as an innovative and scalable project with annual revenue under 10 million euros and a lifespan not exceeding five years. This definition has sparked debate, as industry observers argue that the incentives may require a longer runway for true scale and impact than the law currently provides.
Improvements to stock options
The term stock options may sound foreign to many outside the sector, yet within the ecosystem it is among the most discussed topics of the reform. Stock options refer to shares awarded to employees as part of compensation. The rule raises the tax threshold on gains from selling these options when the company is sold or goes public, increasing the taxable amount from 12,000 euros to 50,000 euros. Investors may see limited immediate impact, while some founders view the change as meaningful, enabling new ways to share value with teams.
Corporate tax and bonuses
Starting this year, technology-based growing companies benefit from a 15 percent corporate tax rate, compared with the standard 25 percent for other Spanish SMEs. The relief applies for up to four years after the first profitable year. To avoid double taxation if an entrepreneur starts a company while employed elsewhere, Social Security offers a three-year discount on self-employment contributions. This approach aims to ease early-stage cash flow challenges and encourage entrepreneurship, according to the finance ministry’s notes on the reform.
Visas for foreign professionals
A notable change is the introduction of new visas designed to attract entrepreneurs and highly skilled tech workers from abroad. An example is a visa geared toward digital nomads. Eligible applicants may also benefit from taxation adjustments, including non-resident income tax treatment for up to five years, provided they have not opted for this route in the past five years and are actively engaged in a qualified economic activity or related start-up work. The policy intention is to make Spain a more welcoming base for international talent involved in entrepreneurship and technology.
Deductions for investors
The reform also expands personal income tax relief for those investing in startups. From this year onward, individuals purchasing shares in a qualifying startup can deduct up to 50 percent of their investment, up from 30 percent previously. The allowable deduction base ranges between 60,000 and 100,000 euros. Additionally, foreign investors supporting a Spanish company may be exempt from certain residency steps, with electronic application simplifying the process for obtaining a tax identification number (NIF). These changes reflect a broader push to channel private capital into early-stage ventures and strengthen Spain’s innovation economy, as reported by government summaries and industry analyses.