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Impact of Spain's law «On Startups» on the conditions for obtaining residence visas


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Spain's start-up law will affect the conditions for obtaining resident visas

On November 3 this year, the lower house of the Spanish parliament approved a law on startups, which has been under consideration since 2019. The established provisions are expected to come into force after ratification by the Spanish Senate. The tax incentives established by the law will help attract investors, entrepreneurs and remote workers to the country.

Important changes in Spanish legislation

The new law was approved by the Spanish Council of Ministers as well as by the Spanish Commission on Economic Affairs and Digital Transformation, which made 271 amendments. Some of the most important changes include:

  • stimulation of serial production;
  • extended benefits for the founding partners of start-ups;
  • support for entrepreneurs from the agricultural sector;
  • loyal requirements for talented students seeking employment in Spain;
  • granting a special visa for IT freelancers.

These changes will attract more money in the Spanish economy, as well as stimulate the development of the Spanish labor market. After the enactment of the law will be easier for foreigners to legalize, find work and conduct business in the kingdom. Also, Spanish residents will have the opportunity to optimize tax payments.

«The adoption of the new Startup Law was for me the most pleasant experience of my time in Parliament», commented Spanish Economy Minister Nadia Calviño on the landmark event.

Features of the new visa for «digital nomads»

The law «On Startups» involves the introduction of new visas for IT workers («digital nomads») who want to live in Spain and work for international companies. Those who engage in professional activities remotely will be allowed to perform up to 20% of the total work in favor of companies located in Spanish territory.

Initially, the visa «digital nomad» will be valid for one year, after which, upon arrival in Spain, the applicant can apply for a residence permit for a period of up to 3 years. After this period, the resident status can be extended for another 2 years. The law also provides a special tax regime for freelancers who will be taxed at the rate of IRNR (income tax for non-residents) and not at the rate of IRPF (income tax for residents).

Start-up companies will enjoy a reduced corporate tax rate of 15%, rather than the 25% rate provided for corporations. Individuals residing in Spain, but working mainly for foreign companies, will be able to count on income tax at a rate of 15%.

Impact on other residence visas

The changes that will affect the residence without the right to work (Non-Lucrative) are related to the simplification of the mechanism for assessing economic resources. Previously, the public income indicator (IPREM) was used as the standard of evaluation. The new law proposes to use the minimum wage indicator (SMI) for this purpose, which will allow applicants with less income to get a visa without the right to work.

One popular way to obtain a residence permit in Spain is the «golden visa», for which a foreigner must invest 500,000 euros in real estate. This program, which is regulated by Law 14/2013 of September 27, 2013, was created to support and internationalize entrepreneurs. Holders of a «golden visa» can live and work in Spain, as well as travel freely to all Schengen countries.

The new law allows one-step submission of applications for a residence permit and visa to one authority for their consideration one by one. It also simplifies the issuance of a foreigner identification number (NIE), which is a mandatory document for all who apply for a Spanish residence permit. With regard to the certificate of no criminal record, the applicant for a residence permit will have to issue it in the last two years, not five, as before. The period of validity of the initial residence permit will be extended to three years.

The bottom line

The changes will take effect as soon as the new law is passed by the Spanish Senate. Its ratification is expected to occur in January 2023. Against the background of stricter laws by EU countries to obtain a residence permit for foreigners, the Spanish government is doing everything possible to attract applicants for residency visas. At the moment the Spanish residence permit program is one of the most popular in Europe. You can learn more about obtaining a residence permit in Spain or another EU country by contacting an international law specialist.

Source: Imidaily, THE LOCAL

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