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Special Tax Regime and the Startup Law

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On 14 October 2022, the Spanish government published the “Proyecto de Ley de fomento del ecosistema de las empresas emergentes.” This is a special tax regime (Beckham Law) for startups.

The Startup Law was created to give greater legal coverage and economic support to technology-based startups and remote workers. Doing so will help build a business ecosystem capable of becoming the engine of modernization for the Spanish economy.

Entrepreneurs and Digital Nomads

One major aspect of the Law is to attract and retain talent. While Spain has no trouble attracting foreigners, bureaucratic legalities often make things difficult. The startup law, and all which coincides with it, aims to ease these burdens. From clearer visa pathways, ease and lower costs of opening a business, to tax incentives.

The law extends to “international remote workers” otherwise known as Digital Nomads. Corresponding with the release of Spain’s Digital Nomad visa pathway. Along with the implementation of Ley Crea y Crece in late October which eases company formation. These modifications hand in hand with the startup law put Spain at the forefront of growth and talent in the digital economy.

What the Startup Law changes

Additionally, the startup law project modifies article 93 of Personal Income Tax Law improving “Special Tax regime applicable to employees transferred to Spanish Territory”, adapting the conditions to the remote work of employees, as follows:

Conditions to apply Special Tax Regime
Article 93 IRPF before Startup LawArticle 93 IRPF after Startup Law
Non-Tax Resident in Spain in the previous 10 Fiscal YearsNon-Tax resident in Spain in the previous 5 Fiscal Years
Spanish Labor contract or Letter of assignment to a Spanish entitySpanish Labor contract or Letter of assignment to a Spanish entity
Remote working contract
Status of Company Director owning less than 25% of the businessStatus of Company Director owning less than 25% of the business or;
 The Company is considered as “Emerging company
Not applicable for self-employeesNot applicable for self-employees

The Startups Law establishes a reduced tax rate of 15% for start-ups that are taxpayers of Corporate Tax and Income Tax of non-residents who obtain income through permanent establishment in Spain. The reduced tax rate of 15% for start-ups will be applicable during the first tax period that the tax base turns out to be positive and the next three consecutive years. As long as, the company maintains the status of an “emerging company.

Lastly, there is a rise for dividends, interest, and capital gains from 19 to 26%.

Timeframe

This regime can be enjoyed for 5 years. However, the time periods will be clearly indicated with the approval by Spanish Tax Authorities. The process for application of this tax regime will be established by the Ministerio de Hacienda y Función Pública.

Lexidy Can Help You Benefit from the Startup Law

Lexidy Law Boutique will ensure you reap all the benefits all of the startup law. From immigration to corporate and tax, we have you covered. Need a place to stay once you’re in Spain? We have you covered with our real estate department.

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