To promote entrepreneurship, Spain has decided to focus on the main factor identified by the Organisation for Economic Co-operation and Development (OECD) to encourage the creation of new businesses: institutional and regulatory environment of the host Estate.
The popularly known as “Law for the Entrepreneur” came into effect on Monday September 30, 2013. The main implications of this new Law, aimed to help the new entrepreneurs or SMEs, are:
1.- Residence visa for foreign investors in Spain
New foreign investors who want to live in Spain will now have certain facilities to obtain their visa.
Who is considered as a foreign investor? Whoever is meeting any of the following conditions:
– Buying a property in Spain, for €500,000 free of charges or encumbrances; or
– Developing a business plan of national interest (creating jobs in Spain, for example); or
– Investing € 2 million or more in Spanish public debt or shares in Spanish companies.
2.- Main advantages for other investors
The Law grants certain advantages to the New Entrepreneur. For example:
– “Limited Liability Entrepreneur”: the liability of natural persons resulting from debts originated by professional or corporate activities may not affect their main residence under certain conditions, such as having met the obligation of submitting the annual accounts. The Law also helps the new entrepreneurs by reducing the rate (from 80% to 30%) of Social Security payments during the first year and a half.
– “Cash approach” special system: Self-employed and SMEs may defer VAT payments until they have really received the payment. With certain conditions.
– “Successive Formation Limited Company”: It is new, among other things, because there is no minimum share capital. The Law establishes some conditions: in the legal reserve and in the distribution of dividends and payments to shareholders. The main regulations of this new type of company are the same than the ones of the Limited Liability Company.
– Extrajudicial payment settlement: There is an amendment to the Insolvency Law in order to permit to continue with the insolvency proceedings even if the creditors’ agreement or the viability plan have not been reached.
– “Points of Consumer Support”: all the formalities to initiate develop or end business activities can be made through this points of support (both in the office and online).
– “Business angels”: The investors helping the new SMEs will benefit of certain deductions in the Personal Income Tax (“IRPF”).
Santiago Nadal / Marta Codony
