Spain has substantially improved its attractiveness as a destination for building technology and innovation-driven companies. Law 28/2022 on the Promotion of the Emerging Company Ecosystem — the Startup Law — redesigned the tax and operational framework for new technology-based companies. Combined with the fast-track incorporation options and available funding ecosystems, Spain now offers a competitive environment at the European level. This guide covers everything you need to know to launch with a solid foundation.
Legal Form and Incorporation: Fast-Track SL or SA for Funding Rounds
The vast majority of startups in Spain are incorporated as a Sociedad de Responsabilidad Limitada (SRL or SL), because the minimum capital requirement was reduced to a symbolic €1 for newly incorporated SLs (Crea y Crece Law, 2022), incorporation can be completed in 24-48 hours through a notary using digital processes, and shareholder liability is limited to their contribution.
The Sociedad Anónima (SA) is only justified when the startup anticipates listing on BME Growth or another regulated market in the medium term, given substantially more demanding corporate governance requirements. For most startups seeking private venture capital, the SL with a well-drafted shareholders’ agreement is the optimal structure.
Digital incorporation through the CIRCE platform (Centre for Information and Business Creation) eliminates the need for in-person visits and reduces timelines from months to days. Total incorporation costs — notary, commercial register and fees — typically run between €400 and €800 for a standard SL.
The Startup Law: Qualification and Tax Advantages
To access the specific benefits of Law 28/2022, the company must obtain emerging company (startup) status from ENISA (National Innovation Company). Requirements are: less than five years since incorporation (seven for biotech, energy, industrial and defence sectors), no dividend distributions, no listing on regulated markets, Spanish domicile and development of a scalable innovation project.
The main fiscal benefits are:
- Reduced 15% corporate tax rate for the first four fiscal years with positive taxable income (versus the standard 25% or 23% for companies with turnover below €1 million).
- 50% personal income tax deduction for angel investors on investments in qualified startups, capped at €100,000 per year with a minimum three-year holding period.
- Improved stock options regime: share options granted to employees are taxed in personal income tax at the time of the share sale (not at exercise), with an annual exemption of up to €50,000 per employee.
- Tax debt deferral in the first two fiscal years with positive taxable income, with no collateral or penalty interest.
Public Funding Available for Startups in Spain
The public funding ecosystem for startups is broader than most founders realise:
ENISA: Participating loans of €25,000 to €1.5 million, unsecured, with grace periods of up to seven years and interest rates linked to company performance. Particularly relevant for pre-seed and seed rounds.
CDTI (Centre for the Development of Industrial Technology): Repayable grants and subsidies for R&D&I projects. The NEOTEC programme (up to €250,000 for technology startups in their first four years) and Misiones (up to €5 million for company consortia) are the most widely used.
Kit Digital: Grants of up to €12,000 for SMEs and self-employed individuals for the adoption of digital solutions covering areas such as web presence, e-commerce, customer management and cybersecurity. The programme was expanded in 2025 with new eligible solution categories.
ICO Startups: Credit lines from the Official Credit Institute for startups and growth-stage companies, with preferential rates and terms of up to 10 years.
The Shareholders’ Agreement: The Document That Will Save or Sink Your Startup
The shareholders’ agreement is the private contract that governs relations between founders and, subsequently, between founders and investors. In Spain, many corporate disputes in startups that reach the courts originate from non-existent or poorly drafted agreements. Essential elements include:
- Vesting clauses: founder equity is “earned” progressively over 3-4 years (one-year cliff is standard) to protect the company if a founder departs prematurely.
- Pre-emption and right of first refusal on share transfers.
- Drag-along and tag-along: the majority investor’s right to compel all shareholders to sell in a full-company exit, and the minority shareholder’s right to sell on the same terms.
- Corporate governance: composition of the board of directors, supermajority thresholds for significant decisions (capital increases, company sale, significant debt).
- Liquidation preference: the order and proportion in which sale or liquidation proceeds are distributed between different shareholder classes.
Essential Services for the First Year
A well-advised startup saves significant costs in the medium term. The services that should not be outsourced to generic or low-cost solutions are:
Accounting and tax compliance: Meeting tax obligations from day one — VAT, withholding taxes, corporate tax — is non-negotiable. Errors in the first fiscal years can affect emerging company status and the associated tax benefits.
People services and payroll: From the first employee, social security obligations, employment contracts and working time records require professional management. The Startup Law facilitates the hiring of international talent through specific visa categories.
Fractional CFO: For pre-seed and seed startups that cannot justify the cost of an in-house Finance Director, the fractional CFO model provides executive-level financial capability at a proportionate cost — particularly useful for preparing investment materials (financial model, data room) ahead of a funding round.
At BMC we manage operational processes for more than 200 companies. See our startup advisory and company setup services.
Common Mistakes When Setting Up a Startup in Spain
Founders building Spanish tech companies routinely make avoidable errors in their legal and tax setup that become costly to unwind during due diligence or at funding rounds.
Mistake 1: Not applying for the ENISA “empresa emergente” recognition before accessing the 15% CIT rate. Law 28/2022 (the Startup Law) grants a preferential 15% CIT rate for the first four profitable years, but only to companies that qualify as empresas emergentes under the ENISA certification criteria: incorporated within the past five years (ten for technology or biotech), not yet profitable, not listed, and operating an innovative or scalable business model. The 15% rate does not apply automatically — it requires ENISA recognition before the tax year in which it is claimed. Startups that self-apply the rate without certification risk a full correction at the standard 25% CIT rate plus late-payment interest.
Mistake 2: Issuing stock options without understanding the simplified regime conditions. Article 14.2 of Law 28/2022 simplified the tax treatment of startup employee stock options — specifically exempting the delivery of shares at exercise from income tax up to €50,000 per year if certain conditions are met (ENISA recognition, option plan approved, four-year vesting minimum). The exemption applies at exercise, not at grant, and only if the employee pays a price at exercise at least equal to the market value of the shares at grant date. Options issued below the grant-date fair value, or with vesting shorter than four years, do not qualify, and the full gain at exercise will be taxed as employment income at marginal IRPF rates.
Mistake 3: Failing to register the cap table correctly before onboarding co-founders or first investors. In a Spanish SL, all changes to the shareholding structure require a public deed before a notary and inscription in the Commercial Registry. Informal agreements about equity splits — even if documented in a shareholder agreement — are not legally effective as regards the actual ownership of participaciones (shares) until the notarial deed is executed and registered. Founders who delay formalising the cap table and then bring in investors find themselves needing to regularise several layers of unregistered transfers simultaneously, at significant notarial and registry costs and with delays that can jeopardise the funding timeline.
