What’s new in the Startups Law in the Basque Country?

1- Deadline foreseen for the approval of the Startups Law

On 27 December 2021, the Draft Law for the promotion of the startup ecosystem, “Startup Law”, was published in the BOCG.

The draft law entered the amendment phase on 24 February. 

Initially, the government pledged to have the law approved by September at the latest after the legislative holidays. 

However, close sources have confirmed that the law will enter into force at the beginning of next year, 2023. There is pressure for it to be applied retroactively to people already in Spain, but the reality is that the updated forecast for approval is January 2023.

The good news is that certain European Next generation funds are linked to the approval of this law, so this is an additional guarantee that the bill will finally become a reality. 

2- Aim of the law

The main objective of this law is to regulate the figure of the international teleworker / international remote worker, a category of people, which after the pandemic has become a profile with a certain weight in our country and a certain deregulation and neglect. 

The law will regulate this situation by means of a new category of visa and residence permit, both for employees (for foreign employers) and self–employed workers (who provide services to foreign employers). 

This new visa will be modified and included in Law 14/2013, of 27 September, on support for entrepreneurs and their internationalisation, along with the rest of the so-called highly qualified visas.

3-  Improvements to the law

– The visa may be applied for from Spain and/or the Basque Country provided that the person is in a regular situation. It will not be necessary to apply for the international telework visa in the country of origin.

– The deadline for processing the decisions will be 20 working days.

– At the end of the established period (20 working days), if there is no response, the application will be considered to have been accepted by positive administrative silence.

– The criminal record to be provided will be that of the last two years (and not five).

– The passport may be used during the first 6 months to register with the Spanish Social Security system, if the applicant does not prove that he/she has a NIE. 

– The visa will be extended for a period of 1 year, with the possibility of renewal for 2 years.

– The family may also benefit from this visa. 

– In cases of employment, it will not be necessary for the company to sponsor and process the application. It will be the worker himself/herself.

4- Application profiles. Visa categories

In practice, the people who will benefit from this visa will be non-Europeans who are working remotely from Spain for their home company, or professionals who move from country to country and work for clients all over the world (digital nomads). 

The law includes two modalities applicable to those who are in a regular situation in Spain and/or in the Basque Country and are going to work:

– As an employee: Provided that the work is carried out for companies based abroad. 

In this case, it will be necessary to accredit the employment relationship for at least three months. It will also be necessary to present documentation that the company allows remote work and that it has international relations with other companies in other countries.

– As a Self-employed (freelance/freelance/digital nomads): In this case, 80 per cent of the work must be done for foreign companies. It will be necessary to prove a real and continuous activity during the last three months. 

It will also be allowed that 20% of the total work is carried out for Spanish companies or clients.

– In both modalities, the person must be a graduate or master’s degree from a university, vocational training centre or business school.

– Or have demonstrable professional experience of at least 3 years.

5- Applicable tax regime

It is important that this new regulation should provide for taxation that is currently non-existent for the Spanish coffers. 

The Law allows access to the taxation of the non-resident regime as long as the person registers with the body authorised to do so:

– A reduction in the Non-Resident Income Tax rate (24% for non-Europeans) will be provided.

– The number of years of previous non-residence will be reduced from 10 to 5 years. 

In the Basque Country, however, the treatment of income from exempt work is carried out in a totally different way. The period of non-residence is already established in the previous 5 years and the duration of the regime in 10. As of 2022, the new Beckham law in the Basque Country introduces an exemption of 30% of salary. It remains to be seen how this Basque tax advantage will be adapted to state law. 

6- The visa for teleworkers and other visas of Law 14/2013

1. The international teleworker visa will have a duration of one year and will be accompanied by a 2-year residence authorisation.

2. The other initial residence authorisations for investors, entrepreneurs, highly qualified professionals, and employees under a national intra-corporate transfer that are in force today, would go from having an initial duration of two to three years. 

While the desired law is being passed, and by way of conclusion, we will continue to apply for the visas established in Law 4/2000 to help international entrepreneurs and teleworkers to establish themselves in Spain: the non-profit visa and the entrepreneur visa.

The arrival of this visa will lead to the “regularisation” of several hundred people who are in Spain with their computers generating wealth for other countries and will allow the collection of certain taxes, over and above the expenditure that this large group of people make in our country.

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