Spain is providing a new opportunity for start-ups to attract entrepreneurs, investment

Spain’s cabinet approved a suite of tax breaks for start-up entrepreneurs and investors and simplified the process of setting up a new start-up business on Friday as part of a new bill to make the country more attractive to start-ups.

Known as the “start-up law”, the legislation forms part of a package of reforms that Madrid agreed with the European Commission in exchange for the release of pandemic recovery funds.

“Start-ups are the foundation of the new digital economy, they generate highly skilled jobs and have high growth potential,” Economy Minister Nadia Calvino said after a weekly cabinet meeting.

Registration fees will be eliminated and the requirements for creating a new company will be streamlined, Calvino said.

Spain currently ranks 97th on the World Bank’s ranking for ease of starting a business, among the lowest scores in Europe.

Under the new law, employees can receive up to USD 56,385 a year in stock options — a common form of remuneration in start-ups.

The amount and rate for investors to claim back deductions on investments in start-ups will also increase. To attract and retain talent, Spain will offer start-up employees, investors, and so-called digital nomads a favorable tax regime under a special five-year visa, Calvino said.

The bill will now be sent to parliament.