Entry into force of the Start-ups Law

For the first time in Spain, the founders of recently created, technology-based, fast-growing, innovative companies with a scalable business model (known as startups) have their own regulatory framework to develop their activity: the Law for the Promotion of the Startup Ecosystem.

The new regulation, which is among the main measures articulated in the Spain Entrepreneurial Nation Strategy, defines the category of startup company as one that meets conditions such as being no more than five years old (seven for strategic sectors), that has its headquarters or permanent registered office in Spain, that develops an innovative entrepreneurial project with a scalable business model or that is not listed on the stock exchange or distributes dividends.

Also, 60% of the workforce must have an employment contract in Spain, or the annual turnover must not exceed 10 million euros, among other characteristics.

In addition, in order to be a beneficiary of the measures articulated in the law, the start-up company must prove its ""innovative and scalable nature of the business model"".

For this purpose, the following criteria have been incorporated, to be evaluated by the Empresa Nacional de Innovación, S.A (ENISA): the degree of innovation, degree of market attractiveness, the company's stage of life, the scalability of the business model, the competition, the team or the volume of customers or users.

Additional information:

https://nacionemprendedora.gob.es/actualidad/noticias/todo-lo-que-tienes-que-saber-sobre-la-ley-de-startups-estas-son-las-10-medidas