Press release

Pérez-Llorca analyses the Draft Law on Start-ups: impact, opportunities and consequences for start-ups in Spain


The Firm organised an event to discuss this regulation, which was attended by partners of the Firm and Esther Elías, CEO and founder of FunTech Rocket.

The Preliminary Draft and subsequent Draft of the Law on Start-ups has opened a debate on the real impact that this new legislation will have on start-ups. In this context, Pérez-Llorca wanted to analyse in depth the content of this upcoming law, how it affects various areas of law, and whether we are facing a change focused on improving conditions for these companies.

The event was attended by Pérez-Llorca partners Pedro Fernández, Corporate partner; José Suárez, Tax partner; Isabel Moya, Employment partner; and Andy Ramos, IP and Technology partner; as well as Esther Elías, CEO and founder of FunTech Rocket, an innovative platform for children to learn to program through games.

Pedro Fernández first explained how this draft law is organised. For Fernández, in the field of Venture Capital, the elements that concern those working in the entrepreneurial ecosystem are mainly bureaucracy, foreign direct investment, and competitive taxation, “so that when someone wants to come to Spain, they think they have equal opportunities with respect to other countries in their environment, especially avoiding dry taxes”. Regarding the scope of application, Fernández commented that “this law is designed to solve all the problems faced by start-ups, provided that they meet a series of conditions”. These include when or how the start-up was created, whether it is based in Spain, what percentage of the workforce is in Spain, that it does not distribute dividends and is not a listed company, among others.

José Suárez went on to analyse the tax measures introduced in the draft law. In his opinion, with this law, the legislator is establishing a series of benefits to improve the position and competitiveness of the Spanish entrepreneurial ecosystem. According to Suárez, it seems that the measures exclusively aimed at start-ups themselves have mostly focused on corporate income tax. A notable measure is the reduction of the tax rate from 25% to 15%, provided that the company remains a start-up. In addition, and in order to offer a more comprehensive perspective on the new taxation for start-ups, the Pérez-Llorca partner analysed which other changes will be introduced in Personal Income Tax (“IRPF”) or Non-Resident Income Tax (“IRNR”), including the treatment of carried interest.

From an employment perspective, Isabel Moya explained that, although this draft law does not establish any changes which are strictly related to employment law, it does provide for two measures that affect the management of workers in this sector. On the one hand, Moya highlighted “the introduction of social security benefits for people who found a start-up and who are working elsewhere in parallel” and, on the other, “help for digital nomads or international remote workers”. On the last point, she indicated that “if a person living outside Spain comes to provide services as a worker or professional for a foreign company, he or she will have fairly significant opportunities for visa and residence authorisation purposes”.

Finally, to close, Andy Ramos introduced Esther Elías, who explained how this new regulation affects start-ups from her own experience as CEO and founder of FunTech Rocket. She highlighted the importance of this draft law in improving aspects such as bureaucratic obstacles or the management of employment issues faced by entrepreneurs. Elías commented that, in her opinion, it is important to be able to access all the information on the functioning of start-ups and for it to be more simplified, especially in the field of grants and subsidies. In this regard, Andy Ramos added that “in the United States there is clear progress in terms of the creation, regulation and development of the entrepreneurial ecosystem, which is much more agile and requires different time frames”.

On finding and retaining talent, and how this draft law can help to manage it, Elías stressed that it is not so difficult to recruit the best professionals, but to be able to offer them competitive remuneration. Although she believes that much progress has been made with this draft law, she explained that “it is essential to continue to promote national talent, not just international talent, and to incorporate measures that facilitate collaboration between entrepreneurs in different projects without the current quota for the self-employed being an impediment to this”.