Ley 28/2022, of 21 December, on the promotion of the emerging business ecosystem — commonly known as the Startups Law — has transformed the tax framework for the technology sector in Spain. Together with the improved special tax regime for relocated workers (the revised Beckham Law), the R&D+i deduction under Article 35 of the Corporate Income Tax Law, and the advantages of the ZEC regime for technology companies in the Canary Islands, Spain offers in 2024 a genuinely competitive fiscal ecosystem for the tech sector.
The Startups Law: the emerging company tax regime
Qualifying as an empresa emergente
To benefit from the Ley 28/2022 tax regime, the company must be certified as an “emerging company” (empresa emergente) by ENISA. The requirements are:
- The company must be newly incorporated or recently created — less than five years old from the date of commercial registration, or seven years for companies operating in strategic sectors: biotechnology, energy, industrial, agri-tech and artificial intelligence.
- The company must not have distributed dividends or be listed on a regulated market.
- It must not result from a merger, spin-off or transformation of entities that were not themselves emerging companies.
- It must have its registered office or permanent establishment in Spain.
- It must be developing an innovative project or an innovative, scalable business model.
ENISA evaluates the application and issues a certification that enables access to the benefits. Certification is not automatic and may be refused if ENISA considers the activity insufficiently innovative.
Reduced 15% Corporate Income Tax rate
Certified emerging companies are taxed at 15% Corporate Income Tax for the first financial year in which they generate a positive taxable base and the three following years (Article 7, Ley 28/2022). The benefit is lost if in any of those four years the company ceases to meet the emerging company requirements, or if ENISA revokes the certification.
This rate applies even if the company was already benefiting from the reduced 15% rate for newly incorporated entities during their first two years (Article 29.1 LIS, which is not cumulative with the Startups Law rate): the Startups Law extends the benefit to four years and does not require them to be the first two.
Deferral of tax debt without guarantees
Article 9 of Ley 28/2022 allows emerging companies to request deferral of corporate tax for the first two financial years in which they generate a positive taxable base — for twelve months, interest-free, without the need to provide guarantees. This significantly relieves cash-flow pressure during the initial phase of profit generation.
Stock options: exemption up to €50,000
One of the most significant changes in the Startups Law for talent retention is the personal income tax exemption on gains obtained by employees when they exercise stock options in emerging companies, up to €50,000 per employee per year (Article 14 bis of Ley 35/2006, introduced by Ley 28/2022).
Before this reform, stock options were taxed as employment income at the point of exercise, at the marginal IRPF rate (up to 47% at state level plus the autonomous community tranche). Now, up to €50,000 per employee per year is exempt, making stock option plans a far more attractive retention tool for Spanish startups.
Any excess above €50,000 is taxed as employment income but may be deferred until the shares are transferred, provided that certain conditions are met (the company must not be listed and the employee must have remained with the company for at least three years).
The enhanced Beckham Law (Ley Beckham 2.0)
Ley 28/2022 amended Article 93 of Ley 35/2006 to broaden and improve the special tax regime for workers, professionals, entrepreneurs and investors relocating to Spain. The main changes are:
New eligible categories
From 2023, the regime is available not only to employees relocated by their employer but also to:
- Workers starting a new employment relationship in Spain for the first time.
- Entrepreneurs coming to establish a company in Spain.
- Highly qualified professionals providing services to emerging companies.
- Investors coming to actively manage their investments in Spain.
- Digital nomads with a remote work visa for Spain.
Tax rate and base
The regime allows taxation in IRPF at the flat rate of the Non-Resident Income Tax (IRNR): 24% on the first €600,000 of taxable base and 47% on any excess. For a senior international executive earning €200,000, the saving compared to the IRPF progressive scale can exceed €40,000 per year.
The regime applies for the year of arrival and the following five years (six years in total). Once the election is made, it applies compulsorily throughout the entire period.
The R&D+i deduction: a structural tool for the tech sector
Technology companies are the primary beneficiaries of the R&D+i deduction under Article 35 of the LIS. Software development that resolves non-trivial technical problems, the creation of machine learning algorithms, cybersecurity systems research, or semiconductor R&D are activities that, when properly documented, qualify as R&D and entitle the company to a deduction of 25% on the first €1 million and 42% on any excess.
For startups that do not yet generate sufficient tax liability, monetisation of the deduction (Article 39.2 LIS) allows them to apply for a cash refund at a 20% discount once a year has elapsed since the deduction right arose. This option converts the deduction into a real source of financing even for loss-making companies.
Patent Box: 60% reduction for intangible income
The Patent Box regime (Article 23 LIS) allows a 60% reduction on income derived from licensing patents, utility models, know-how, designs, and copyright-protected software, provided the intangible asset was created — at least in part — by the licensing entity.
For a tech company that licences its software to foreign clients, the Patent Box can reduce the effective Corporate Income Tax rate on that income from 25% to 10% (25% × 40% of the reducible base). Proper planning of the intangible’s ownership, documented creation process and licence agreement structure are critical elements for accessing the benefit.
Public financing: ENISA and CDTI
Beyond tax incentives, Spanish tech startups have access to public financing instruments that complete the ecosystem:
- ENISA loans: financing between €25,000 and €1.5 million at a reduced fixed rate (Euribor plus 3.25% spread), with grace periods of up to nine years and no real guarantees or personal surety required.
- CDTI project loans: the Centre for Industrial Technological Development finances R&D projects with loans of up to 85% of the approved budget (minimum budget of €175,000) at 0% interest with a five-year grace period.
- Neotec: an annual CDTI call to finance the launch of new technology-based companies, with loans up to €250,000 and a non-repayable contribution of up to €10,000.
Combining public financing with the R&D+i deduction is permitted and allows startups to significantly reduce the effective cost of their technology projects.
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