How to certify your company as a start-up in Spain and pay 15% corporation tax

Companies that qualify as empresas emergentes — the Spanish statutory category for start-ups — may pay corporation tax at 15% and access further tax advantages, but only if they first obtain the ENISA certification attesting to that status. It is worth knowing precisely what is required in order to obtain it, what benefits it confers, how the procedure works and what criteria the certifying body applies.

What an empresa emergente is, and why certification is the key

The framework is laid down in Law 28/2022 of 21 December, on the promotion of the start-up ecosystem (Ley de fomento del ecosistema de las empresas emergentes, widely known as the Ley de Startups), implemented, as regards certification, by Order PCM/825/2023 of 20 July. The certifying body is ENISA (Empresa Nacional de Innovación, the State-owned innovation finance company). Without its certificate none of the incentives can be claimed; once granted, the certificate is valid before every public administration.

The requirements to qualify as an empresa emergente

The conditions are cumulative: no more than five years may have elapsed since incorporation (seven in strategic sectors); the company must not be listed and must not have distributed dividends; it must have its registered office or a permanent establishment in Spain; at least 60% of its workforce must be employed under a Spanish employment contract; annual turnover must not exceed 10 million euros; the company must not arise from a merger or a spin-off (unless of other empresas emergentes); and it must be innovative and scalable. It is these last two features that ENISA assesses.

Innovative and scalable: what ENISA really evaluates

Innovative character is not confined to the 15% test. Article 4 of the Order admits several alternative routes, and evidencing any one of them is enough:

• That R&D and innovation expenditure represents at least 15% of total expenditure (the best-known route).
• Having received public funding for R&D and innovation in the previous three years, without revocation.
• Holding the Innovative SME seal (Sello Pyme Innovadora), certifications such as Young Innovative Company (AENOR EA0043) or UNE 166.002, or a reasoned report from the Ministry of Science and Innovation.

Where none of these applies, ENISA assesses whether there is protectable technological innovation — patents, software, know-how — or other innovative elements, under article 4.4.

As to scalability, article 5 sets out the factors to be weighed: the market (traction and growth in demand), the stage of the project (from prototype to minimum viable product and commercialisation), the business model (the capacity to grow in users, operations or revenue without a proportional increase in costs), competition and differentiation, the team and the customer base. There is also a direct approval route for companies holding a live ENISA credit facility in good standing, under article 5.3.

What the certification delivers

• Corporation tax at 15% in the first tax period with a positive tax base and in the three following periods (as against the general 25% rate). The 15% rate does not run from incorporation, but from the first profitable period.
• Deferral of the corporation tax liability in the early periods, without guarantees, and exemption from instalment payments.
• Stock options: the amount exempt from personal income tax on the award of shares to employees rises from €12,000 to €50,000 per year, and taxation of the excess is deferred until sale, listing or ten years.
• Investment relief: the investor may deduct 50% in their personal income tax return, on a maximum base of €100,000 per year.
• International talent: the inbound expatriate regime (the so-called “Beckham law”) is relaxed, with taxation at 24% up to €600,000.

How the rules are being applied: the criteria of those who decide

It is worth knowing how those who apply the rules interpret them, because that is where certification is won or lost:

• On certification (ENISA). Article 6.2 of the Order allows an application to be refused where the business model raises “reasonable doubts as to potential reputational, regulatory, ethical or speculative risks”, which excludes purely speculative projects or crypto-asset ventures without substance. And the innovation must be real: a balance sheet confined to the share capital, with no activity and no effective investment, will rarely pass the assessment.
• On the tax benefits (Directorate-General for Taxation). The Spanish tax authority’s Directorate-General for Taxation (Dirección General de Tributos, DGT) is already defining the scope of the advantages in binding rulings (for instance, V2032-24): as regards stock options, it has held that the exemption requires the award to form part of the company’s general remuneration policy and to contribute to employee participation, without being conditioned on professional grade.

The procedure, step by step

The procedure is conducted entirely online and is free of charge, under articles 6 and 7 of the Order:

1. The company files its application through the ENISA electronic portal, with a declaration of compliance (declaración responsable) and supporting documentation (deed of incorporation, tax identification, accounts and a description of the project).
2. ENISA assesses innovative character and scalability.
3. It has a maximum period of three months to decide and, under article 8, positive administrative silence applies: if that period elapses without a decision, the application is deemed granted.

Start-up status is not permanent: articles 10 and 11 provide for its loss where the requirements cease to be met; ENISA may open a proceeding to withdraw the certificate, with a prior hearing, and the benefits are lost from the moment of the breach, not from the date of the decision. Compliance must therefore be monitored throughout the whole period in which the status is relied upon.

How we approach this at RCM Legal

Since everything turns on properly evidencing innovation and scalability, and on not losing the status along the way, at RCM Legal we first assess frankly whether your project meets the requirements and which of the routes in article 4 is the strongest ground on which to defend it. We prepare the application with the documentation that best supports it, monitor the continued fulfilment of the conditions and coordinate the tax planning that flows from the certificate — corporation tax, stock options and the investment relief — in line with the doctrine of the Directorate-General for Taxation. If you are launching a project built to grow, tell us about your case.