The law on Startups, formally known as the Law on the Promotion of the Ecosystem of Emerging Companies, is insufficient for the Spanish digital ecosystem. Just nine months after it came into force, technology companies are already demanding the approval of new regulations that will once again benefit this group.
Under the umbrella of the Adigital employer, this time they are asking that Spain regulate the activities linked to scale-ups, a typology of emerging companies that are characterized by growing at full speed and having a consolidated business. According to the OECD definition, this growth must exceed 20% for three consecutive years and affect income or the number of workers in the workforce. Under this premise, it is estimated that there are around 400 digital companies in Spain that are scale-ups, according to data from Bankinter and Wayra (there are no official statistics). Examples of these companies are long-haul startups, such as Red Points, Jobandtalent, Travelperk and Factorial.
“Scale-ups are the spearhead of Spain’s innovative ecosystem and the Law on Startups does not take them into account because it is only focused on start-up companies in the initial stages, five years of life in the case of technology, and of seven years in the biotechnological case”, comments María González, director of entrepreneurship and scalability of the employer. According to Adigital, these companies – and the entrepreneurs and investors behind them – have special needs that deserve specific regulation, different from that of startups and conventional companies.
The initiative is in its initial phase, but the employer has already identified that one of the most important needs is to improve the tax regime. Specifically, Adigital is advocating for the benefits of the Startups law to be extended to the new Scale-up s or Scalability law. “We consider it key to improve the tax regime for stock options (shares), income tax and companies in the law of Startups”, says González. Apart from this, the employer is working to create tailor-made legislation. Among the topics he wants to analyze, he highlights the recruitment of international talent, the creation of large Spanish capital investment vehicles (to avoid the predominance of international funds in rounds of more than 50 million euros) and the technical training of technology professionals , as well as the promotion of entrepreneurial culture. “We are now studying their needs in depth, comparing legislation from other countries such as the United States, France or the United Kingdom”. In addition, he comments, “we are starting to contact different agents involved”. In Catalonia, Adigital wants to establish contacts with the Barcelona Global and Tech Barcelona associations, as well as with the employers’ association Foment del Treball, entities that participated in the drafting of the Startups law.
Another novelty of the initiative is that this time digital companies want to take advantage of their efforts to ensure that the law also affects traditional companies outside of technology that also register high growth. “Spain is a country of SMEs and micro-SMEs and we want the Scalability law to also help this group, to promote the competitiveness of small family businesses that want to gain size in the market”, says González, who assures that Adigital will meet with associations linked to SMEs. The employer has already had a meeting with representatives of the Government in office and assures that the predisposition towards this new law has been very good, the same as there was for the Startups law, which was approved with a great political consensus .
The steps to follow in the next 18 months will consist of drafting the proposed law and presenting it to the Government and the parliamentary groups. Taking into account the precedent of the Startups law, the entry into force of the Scalability law will not come until five years from now. This is where the employers’ rush to get it up and running comes from.
