How to be accredited as a Start up in Spain?
In order to be considered an emerging company/Start-up and benefit from the tax and legal incentive, it is essential to be accredited as such, establishing a procedure to obtain an emerging company certification.
This procedure, which will be free of charge and will consist of ENISA (Empresa Nacional de Innovación, S.M.E., SA), which is a national innovation company and will be evaluating -within a maximum period of three (3) months- whether the emerging company, in addition to the aforementioned requirements, has the nature of an entrepreneurship, innovation and scalable business model.
An emerging company will be considered innovative when its purpose is (according to the law) “to solve a problem or improve an existing situation through the development of new or substantially improved products, services or processes compared to the state of the art and that implicit risk of technological or industrial failure or in the business model itself.”
The analysis on the degree of innovation and the scalability of the business will be based on the following criteria, the specific development of which is expected to be established in a Ministerial Order that, as of today, April 11, 2023, has not yet been published:
- Degree of innovation
- Degree of attractiveness on the market; supply and demand in the sector, customer acquisition strategies, among other aspects.
- Phase of the company’s life: assessment of whether the services/products have already been launched on the market
- Business model: scalability of the number of users, operations or annual billing.
- Competition: differentiation from competing companies
- Team: experience, training and track record of the team.
- Dependence on providers, suppliers and rental contracts.
- Clients: volume of clients or users of the emerging company.
When the start-up belongs to a group of companies, the group or each of the companies that make up the group must meet the start-up requirements. This point is especially important to take into account when there is an acquisition or corporate restructuring (a merger, division or other operations of structural modifications of companies) of a start-up company is intended, in order to avoid losing said condition due to a lack of planning and strategizing of said operations.
The details about the requirement to be considered Start-up con be found in the following link.
The details of the tax benefits can be found in our blog article in the following link.
The changes introduced for Start-up in corporate law to attract foreign investment and loyalty of talent can be found at the following link.