The startup law, formally known as the law for the Promotion of the Ecosystem of Emerging Companies, is insufficient for the Spanish digital ecosystem. Barely nine months after its entry into force, technology companies are already demanding the approval of a new regulation that will once again benefit this group.
Under the umbrella of the Adigital employers’ association, this time they ask that Spain regulate activities linked to scale-ups, a type 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 on the workforce. Under this premise, it is estimated that there are about 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-standing startups such as Red Points, Jobandtalent, Travelperk or Factorial.
“Scale-ups are the spearhead of Spain’s innovative ecosystem and the startup law does not take them into account because it is only focused on emerging companies in the initial phases, with five years of life in the technological case and seven years in the case of technology. the biotechnological case,” comments María González, director of entrepreneurship and scalability of the association. 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 the initial phase, but the employers’ association has already identified that one of the greatest needs is to improve its tax regime. Specifically, Adigital advocates extending the benefits of the startup law to the new scale-up law. “We consider it key to improve the tax regime for stock options (shares), income tax and corporations in the startup law,” says González. Apart from this, the employers’ association is working to create tailored legislation. Among the topics that he wants to analyze are the recruitment of international talent, the creation of large Spanish capital investment vehicles (to avoid the predominance of international funds in rounds greater than 50 million euros) and the technical training of technological professionals, as well as the promotion of entrepreneurial culture. “Now we are studying their needs in depth, comparing legislation from other countries such as the United States, France or the United Kingdom.” Furthermore, he comments, “we are beginning 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 Foment del Treball employers’ association, entities that participated in the drafting of the startup law.
Another novelty of the initiative is that on this occasion digital companies want to take advantage of their efforts to ensure that the law also affects traditional companies outside of technology that 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,” comments González, who assures that Adigital will meet with associations linked to SMEs. The employers’ association has already had a meeting with representatives of the acting Government and assures that the predisposition towards this new law has been very good, the same as there was for the startup law, which was approved with a great political consensus.
The next steps to follow in the next 18 months will consist of drafting the bill and presenting it to the Government and the parliamentary groups. Taking into account the precedent of the startup law, the entry into force of the scalability law will not come for another five years. Hence the rush of the employers to get it started.
