The main players in the digital economy and innovative entrepreneurship present a joint response to the future Startups Act
- Adigital, Asociación Española de Startups, Startup Valencia, ASCRI, Tech Barcelona, Spain Startup, Foment del Treball and AseBio see the need to take advantage of this regulatory milestone to make entrepreneurs and startups the main vectors of economic and social development in Spain
- They welcome this first step by the government, but ask it to be more ambitious in aspects such as the definition of start-ups, taxation in favour of start-ups and investment in them, measures to attract and retain talent, and the implementation of regulatory sandboxes
On the occasion of the draft bill to promote the startup ecosystem, Adigital, the Spanish Startup Association, Startup Valencia, Ascri (Spanish Association of Capital, Growth and Investment), Tech Barcelona, Spain Startup, Foment del Treball and AseBio (Spanish Association of Biocompanies) have presented a joint proposal to improve this new regulatory framework, which aims to support the creation and growth of startups, especially in the digital economy, and make Spain a magnet for startups.
The main players in the digital economy and innovative entrepreneurship in our country have welcomed this draft bill positively, although they stress the need to approach this regulatory milestone with ambition in order to make entrepreneurs and start-ups one of the main vectors of economic and social development in our country. Their joint response seeks to provide a better context and to qualify some of the Government’s proposals to improve the draft law that is in the initial stages of its processing. It is a set of measures around five axes: definition and accreditation of start-ups, tax incentives for the ecosystem, tax incentives for investment, attraction and retention of talent, and controlled testing environments.
Start-up definition and accreditation
Among the proposals of these entities to the future law, everything that has to do with the precision of the definition of ’emerging companies’ or ‘startups’ stands out. Whether or not the measures and incentives described in the articles of the law will be applied depends on this, they say.
They consider, for example, that the period after which a company can be defined as a start-up should be extended and stress that it is essential that this law be applied to serial entrepreneurs, who represent 63% of entrepreneurs in Spain, by eliminating article 3.2 of the future law.
Tax incentives for the startup ecosystem
The signatories also call for greater ambition to support the growth of these emerging companies. Specifically, they explain that start-ups need tax incentives focused on deductions for R&D and technological innovation, incentives for hiring national and international talent, reductions or incentives in the company’s social security contributions during the first years, a review of the period of application of negative tax bases, and the application of the tax deduction in personal income tax provided for in the draft also in corporate income tax. Therefore, they call for the strengthening of mechanisms to attract investment and warn of the absence of measures to promote and encourage investment in start-ups by business angels and private equity (venture capital and private equity), key vehicles in the creation and development of innovative businesses. It is necessary, they argue, that our country should provide an appropriate tax regime for these actors, at the level of our neighbouring countries.
Attracting and retaining talent
Key players in the digital and innovation ecosystem also refer to measures that can contribute to attracting and retaining talent.
On the one hand, they propose streamlining the procedures for attracting foreign talent with actions such as the creation of a ‘Startup Visa’ programme, an attractive impatriate regime or a “digital window”. On the other hand, they insist on improving the incentive remuneration scheme with stock options that the future regulation contemplates. In this regard, they point out that the tax treatment of stock options may discourage their use, so they propose revising the time of accrual of the tax and transferring it to a liquidity event. Given that almost all the countries around us have adopted tax measures aimed at encouraging employee equity participation in their small and medium-sized companies, they explain, not doing so in Spain would also have an impact on the competitiveness of our entrepreneurial fabric.
On controlled test environments and other measures
Finally, the joint document also welcomes the fact that the draft bill’s Title IV supports the implementation of controlled test environments or regulatory sandboxes as an ideal instrument for experimenting with new business models, generating real and timely information that will facilitate the legislator’s work in the future. In relation to test environments, they request greater specificity in the text in order to establish their regulation as soon as possible and a specific timeframe for their implementation, as well as harmonisation at national level.
The Spanish Digital Economy Association (Adigital) is the business organisation that promotes the digitalisation of the Spanish economy. Its mission is to contribute to economic and social development by facilitating the digital transformation of the national business fabric.
Formed by a network of more than 500 companies from key sectors, Adigital promotes the development of the Digital Economy through the representation and defence of the interests of its members (Policy), the dissemination, research and creation of synergies (Labs) and the generation of trust in the digital environment (Trust).
In short, Adigital is committed to digitalisation for economic growth and job creation, as well as for the construction of more cohesive and sustainable societies.