A regulatory framework favorable to startups: the 5 laws you need to know.

A favorable regulatory framework plays a crucial role in the development of the startup ecosystem in Spain. It provides the necessary legal and regulatory foundations to drive innovation, encourage investment, and facilitate the creation and growth of new companies. By offering tax incentives, streamlining bureaucratic procedures, and promoting investment in R&D, this framework not only attracts entrepreneurs and capital but also fosters competitiveness and job creation

Startup law: Promoting business innovation

The Law 28/2022, of December 21, on the promotion of the emerging business ecosystem, commonly known as the startup law, is a component of the Spanish regulatory framework aimed at fostering the creation of innovative companies. Approved in 2022, it provides a set of benefits and specific measures for startups, such as:

• Favorable tax regime: possibility of enjoying reduced taxation on profits generated in the initial years of activity.
• Measures to facilitate access to financing: facilities to access financing through measures such as equity crowdfunding schemes and simplification of investment processes.
• More flexible labor framework: possibility of obtaining benefits in hiring personnel, offering a flexible framework for human resources management.

In the startup law section, we will be able to delve into more detail about this legislation.

Create and grow law: Streamlining of business processes

The Law 18/2022, of September 28, on the creation and growth of companies, known as the create and grow law, aims to facilitate the creation of companies and encourage investment in startups through the simplification of procedures and tax requirements. Some of the highlights of this law include:

• Reduction of bureaucratic procedures: possibility of carrying out the procedures for company creation and registration quickly through electronic means.
• Combatting late payments: promotion of the adoption of electronic invoicing among companies and self-employed individuals, facilitating greater traceability and payment control.
• Promotion of growth and expansion of corporate fabric: encouragement of investment in R&D and technological development.

Entrepreneurship law: Stimulus for business initiative

The Law 14/2013, of September 27, on support for entrepreneurs and their internationalization, known as the entrepreneurship law, is fundamental for simplifying the creation of companies and fostering entrepreneurial spirit. Some of the highlights of this law are:

• Visas for foreign entrepreneurs: streamlining the process for obtaining residency permits.
• Support for female entrepreneurship: promotion of gender equality in entrepreneurship.
• Facilitation of foreign investment: simplification of procedures to attract foreign investment.

Latest autonomous workers law: Improvements for self-employed workers

Since the approval of Royal Decree-Law 13/2022, self-employed workers have benefited from a series of improvements, strengthening their financial stability and simplifying administrative procedures for them. Some of the provisions of this law include:

• Reduction of tax burdens: tax incentives for self-employed workers, such as contribution bonuses during parental leave for birth and adoption.
• Expansion of social rights: improvements in benefits and social rights for self-employed workers, allowing, for example, the possibility to combine monthly unemployment benefits with self-employment work.
• Flexibility in contributions: possibility to choose the Social Security contribution base.

New bankruptcy law: Facilitating business restructuring

The bankruptcy law 16/2022 aims to simplify and expedite the processes of business restructuring and reduce the liquidation of companies facing financial difficulties. Some of the reforms include:

• Promotion of out-of-court agreements: facilitates debt negotiation and agreements with creditors before declaring insolvency through a pre-bankruptcy instrument aimed at avoiding insolvency.
• Employee protection: measures to preserve jobs and ensure the continuity of companies experiencing financial difficulties but are capable of generating profits.
• Second chance: greater flexibility for entrepreneurs and business owners to have a second chance after a business failure, allowing the debtor to avoid liquidation of their assets if they present a payment plan, which would allow them to maintain their activity and assets.

In summary, Spain has established a regulatory framework that supports the creation and growth of companies, especially startups and innovative enterprises. These laws not only simplify procedures and encourage investment but also promote innovation, gender equality, and sustainability in the business ecosystem.