However, this progress has not come without its challenges. In this article, we will provide some advice to startups and venture capital investors in Spain, paying special attention to the tax system. We may say this is general advice, we will always recommend to seek personal advice for your specific project. We will be happy to assist you.
Starting a project in a new country can be very challenging. But it will be definitely worst if you do not know where you are walking in. So, knowing as much as you can of how things work where you are planning to do business is a really important must. With this research, you can also find interesting gaps in the market you will be able to fill.
When you are starting something and you have to be creative and work really hard in order to make this happen, you need by your side people who believe in what you are doing. People who are passionate about the project, about what they do, about the role they are playing in the business. This way, they success of the company are going to be their success too and they will be happier working (and more productive too). It will also help you retaining the talent you have trained.
It is always important, but even more when you are starting your business abroad. Create a network as soon as you can. Talking to the right people can help your company jump to the next level easier than doing everything by yourself.
And we will also recommend you take risks. Let’s be honest: you are already taking risks by starting a business. So you already know what it takes to be successful in this scenario. If you would like to grow your company here, you will need to be ready to take risks.
Venture capital firms are catalysts for startup success. The tips we offer for your adventure are basically around “look beyond”. Look beyond the two main cities. Madrid and Barcelona have great opportunities, but there are other places that are worth exploring. And we would advise to look beyond traditional sectors as well. We are specialised in all-technology related ones, that are non-traditional sectors in this country.
It does change the tax regime, making it easier for startups and remote workers. It reduced tax rate of 15% for startups that are taxpayers of Corporate Tax and Income Tax of non-residents who obtain income through permanent establishment in Spain. This reduced tax rate will be applicable during the first tax period that the tax base is positive. If the company maintains the status of “emerging company” it can be applicable for the next three years too.
The Spanish tax regime is complex. There are several taxes you will be need to pay and each has its own specific rules (and exemptions too). The Spanish government also provides tax incentives to encourage investment and also to promote hiring young and disabled people. We, as your advisor, will help you navigate the system and minimize your tax liabilities.
One of the most significant challenges that startups in Spain face is obtaining funding, particularly venture capital investment. Under the Spanish tax system, dividends paid to shareholders are subject to withholding tax, which can discourage investors. To overcome this issue, startups can consider alternative methods of investment.
However, as we highlighted at the beginning, Spain is revising its tax system to align it with the international investments. This involves changes to tax laws related to digital services. Therefore, startups and venture capital investors keep up with all relevant laws that will help them minimize their tax liabilities.
In conclusion, with the right advice and support, it is possible to navigate the system successfully and benefit from the many tax incentives available. We will make sure every benefit available in Spain for your company will be applied.
We offer a new way of giving legal counselling, with the latest technology. And we do so in a flexible manner and without any unnecessary costs. With the professional legal guidance, startups and venture capital investors will reap the rewards of a thriving market.