Create and Grow Act will facilitate investment in startups

Create and Grow Act will facilitate investment in startups

Emerging and technological businesses known worldwide as “startups” are almost always external financing and it is not always easy to obtain. However, this may change in the near future, thanks Enactment of the Create and Grow Lawfocusing on the fifth part facilitate investment in startups together with developments in foreign financing and grouping of investors.

Getting investment is one of the main challenges that all entrepreneurs have to face. Without adequate funding, a good idea can turn into a project that ends up in a drawer. While it is true that there are different methods of obtaining funding, for example crowdfunding or private loans, Getting the number needed to bring the business idea to life from scratch is an extremely complex task..

This makes the innovations brought by this law very important because, according to experts, “Investing in a startup in Spain is an easier process than it used to be since last November 10.”. As Ramón Saltor, co-founder of Dozen Investments, who was involved in drafting the regulations, explained, the Create and Grow Law “acts as an incentive to invest in new projects”. benefits both participatory financing platforms and entrepreneurs.

“The platforms are expanding their capacity to operate in new markets and will be able to do so with practically homogeneous legislation across the European Union. This It will work as a driving force for the creation of new companies.will lead to the creation of new quality jobs”, explained Ramón Saltor.

The aim is to match Spanish regulations with European ones.

With Entry into force of the Law on the Establishment and Growth of Companies (Crea y Crece) Spanish regulation updated. Specifically, section V of this law It was created to replace the previous standard published in 2015. (Law No. 5/2015 of 27 April on the promotion of business finance) to equate with the rest of European regulations on a competitive level. Now Spain meets the requirements set by the European Regulation. crowdfunding or participatory financing,” eg. paving the way for foreign operations”, the experts of Dozen Investments explained.

The European Regulation, ratified in November 2020, provides a legal framework that combines government regulations that must be issued before November 2024 with implementation criteria for all countries. The new rules created in the said regulation Contrasted with the Spanish regulations of 2015Therefore, Law Creates and Grows replaces chapter V and previous regulations.

What benefits will the Create and Grow Law provide? beginnings or innovative business

Roughly speaking, Section V of the Create and Grow Act has made investing in startups a much easier process. First, it allows investors to be grouped into “tools”. facilitate the financing of new businesses and companies. Until now, small investors had to invest directly in the venture, which in some cases meant up to a hundred different investors in the same company. “This made it very difficult to carry out future operations such as raising capital because of its complexity,” the experts said.

In this way, platforms can now establish companies – SL or any type – whose purpose is to invest in a startup, as long as they are accepted by a European country. So investment platform It has the authority to establish these companies to use the capital through a single legal entity.. In practice, this will benefit entrepreneurs who want to carry out certain operations, as the procedure will be much faster and easier.

Second, crowdfunding platforms can already apply for a “European passport”. will be allowed to operate in the common market. This is both national and international They will have the capacity to finance projects in Spain and the rest of Europe.. “Until now, there were many bureaucratic hurdles that made it very difficult to operate supranationally. it slowed down The arrival of European Venture Capital (venture investors)something limited opportunities for many entrepreneursbut it also made it harder for Spanish platforms to support projects in the European common market”, explained Dozen Investments.

On the other hand, in terms of capital increase, while updating the standard according to the European Regulation, the maximum amount that enterprises can collect in a one-year period. increased to 5 million eurosregardless of the type of investor seeking financing.

Another innovation brought by the law is from now on, funding platforms can have a bulletin board where investors can show their interest in selling shares. Of course, the transaction has to be made between the buyer and the seller. In contrast, although only in the case of loans, the investor is allowed to “define some features of the projects and the platform for direct depositing money”.

With these innovations in chapter V of the Create and Enlarge Law, It mainly aims to promote investment mechanisms in new ventures. “This standard is moving in a positive direction in the regulation of the activities of enterprises. crowdfunding and on par with the most advanced European regulations in this regard. This provides investors, especially capital inflow from abroad”, stressed Ramón Saltor.

As explained by the expert, up until the time it went into effect, “investing together was very difficult and unattractive. venture capital foreign. In fact, our platform was the only one in Spain to achieve this. The measures adopted in the law now will encourage the European passport and allow that investment to come from abroad, will enable you to operate quickly in any country of the common market”-

Easier to trade now for traders It is an important advantage for entrepreneurs.because, in the words of Ramón Salto, “certification of instruments in the common market facilitates and equalizes investment operations in all European countries”.

These innovations have been added to the New Entrepreneurship Law.

The Create Grow Law is not the only regulation that brings innovations and advantages for entrepreneurs in the country. Lately, Congress approved new Establishment LawIt will implement various tax innovations for innovative and emerging businesses from January 1, 2023.

The law, which was recently approved by the courts, makes it clear that the new aid and the expansion of various cuts are aimed at providing greater scope and financial support to “emerging” businesses. In fact, the text itself specifies the conditions that emerging companies must meet to be considered startups, and You will be able to enjoy these benefits from January 2023..

Some of the basic requirements, being younger than five, can be extended to age seven for businesses in certain industries, such as biotechnology; or “develop an innovative entrepreneurship project with a scalable business model“. Enisa is empowered to determine which freelancers are responsible for an “innovative” activity and which are not.

“Disruptive” and innovative, developing or beginnings may qualify for certain tax benefits, such as: To be taxed at a reduced nominal rate of 15% the first two years in Corporate Tax; defer your self-assessments for up to a year and at no additional cost; use up to 50,000 euros in tax-free shares to pay employees; anyone start your business at no cost and in an average of six hours.

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