Digital Nomad & Start-up Law

The granting of aid aimed at promoting open innovation through the Activa-Startups initiative.

FTR Legal Activa-StartupsOn the 5th of November, the extract of the Resolution of November 3rd, 2022, of the EOI Foundation, F.S.P. was published in the BOE (Official State Gazette) approving the call for the granting of aid aimed at promoting open innovation through the Activa-Startups initiative, within the framework of the Recovery, Transformation and Resilience Plan, or ‘Start-ups Law.’

The Law was created to give greater legal coverage and economic support to emerging technology-based companies and to help build a business ecosystem capable of becoming the engine of modernization of the economy.

Startups must meet a series of requirements, among which are establishing their registered office in Spain, they must not exceed 5-years old (or seven for strategic sectors); nor go public or distribute dividends; and have 60% of the workforce hired in Spain.

Start-ups will be able to prove that they are innovative for a period of one year. It will be Enisa who will evaluate them, following criteria that includes the degree of innovation, the attractiveness they offer to the market, the impact they offer, the business model, competition, and the volume of clients.

These companies will have a reduction in the tax rate in the corporate tax of the general rate from 25% to 15%, in the first four years from which the taxable base of the tax is positive.

Another of the legislative novelties whose entry into force is expected at the beginning of 2023, is the creation of a special visa for digital nomads, people who can carry out their work through the exclusive use of computer, telematic and telecommunication media and systems, developing its activity for companies that are outside of Spain. It is allowed that up to 20% of the total income of the activity may come from a company located in Spain.

The requirements for applying for this type of visa, among other requirements, are:

1. Being a non-EU foreigner (including the United Kingdom).

2. Lack of criminal record

3. Not having the entry prohibited in Spain

4. Have private health insurance.

5. Be a highly qualified professional.

6. Have a minimum professional experience of three years.

7. That the company for which the work is carried out has carried out a real and continuous activity for at least one year.

8. That the scheduled activity can effectively be carried out by electronic or telematic means.

9. That the employment relationship, whether self-employed or employed by someone else, existed for at least three  months before the visa application and that the employer has authorized remote work activity.

The initial validity of the visa is one year unless it has been requested for a shorter period, once its validity expires it can be extended up to five years (three-year and then a two-year extension) provided that the requirements for renewal are accredited.

Taxation in Spain will be for the income tax of non-residents, with an applicable rate of 24% fixed for income from work up to a maximum of 600,000 euros and will not be taxed on income from other income obtained outside of Spanish territory.

If requested, a residence visa may be processed for the spouse and children under 18 years of age, or adults who are unable to provide for their own needs due to their state of health, when they accompany the applicants.

Those who want to reside in Spain for a period of less than one year may apply for a teleworking visa at the Consulate Offices of Spain.

The international teleworking visa will constitute sufficient title to reside and work remotely in Spain during its validity.

Once the validity of the visa has expired, teleworkers who are interested in residing in Spain may request the residence permit for an international remote worker, as long as the conditions that generated the right are maintained.

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