Requirements and conditions for your application

1. Requirements that must be met by the entity in which the investment is made

 Regulations: Art. 68.1.2 Law Income Tax

The entity whose shares or interests are acquired must meet the following requirements:

1. Be in the form of a Public Limited Company, Limited Liability Company, Labour Public Limited Company or Labour Limited Liability Company, in accordance with the terms set forth in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of July 2, and in Law 44/2015, of October 14, on Labour Companies, and not be admitted to trading on any organized market, whether regulated markets or multilateral trading systems.

   This requirement must be met during all years of holding the share or participation.

2. Carry out an economic activity that has the personal and material means for its development.

   In particular, the activity may not include the management of movable or immovable assets referred to in article 4.8.Two.a) of Law 19/1991, of June 6, on Wealth Tax, in any of the entity's tax periods concluded prior to the transfer of the participation.

3. The amount of the entity's equity may not exceed 400,000 euros at the start of the tax period in which the taxpayer acquires the shares or interests.

   When the entity forms part of a group of companies within the meaning of Article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts, the amount of equity will refer to the set of entities belonging to said group.

2. Conditions that must be met by the shares or interests in which the investment is made

Regulations: Art. 68.1.3 Law Income Tax

The following conditions must also be met:

1. The shares or interests in the entity must be acquired by the taxpayer either at the time of its incorporation or through a capital increase carried out within the following periods:

   • As a general rule, within five years following said constitution.

   • In the case of start-ups referred to in section 1 of article 3 of Law 28/2022, of December 21, on the promotion of the start-up ecosystem, within seven years following said incorporation.

   In addition, they must remain in your estate for a period of more than three years and less than twelve years .

   Startups

   In accordance with section 1 of article 3 of Law 28/2022, of December 21, 2022, on the promotion of the ecosystem of emerging companies, “emerging company” means any legal entity, including technology-based companies created under Law 14/2011, of June 1, on Science, Technology and Innovation, that simultaneously meets the following conditions:

   1. Being newly created or, not being newly created ,

      • In general, when no more than five years have passed since the date of registration in the Commercial Registry, or competent Registry of Cooperatives, of the public deed of incorporation, or

      • in the case of companies in biotechnology, energy, industrial and other strategic sectors or those that have developed their own technology, designed entirely in Spain, when seven years have not elapsed.

   2. Not having arisen from a merger, spin-off or transformation operation of companies that are not considered emerging companies. The terms concentration or segregation are considered to be included in the previous operations.

   3. Not distributing or having distributed dividends , or returns in the case of cooperatives.

   4. Do not trade on a regulated market.

   5. Have its registered office, registered office or permanent establishment in Spain .

   6. Have at 60 per 100 of the workforce with an employment contract in Spain . In cooperatives, worker members and working members whose relationship is of a corporate nature will be counted within the workforce for the sole purposes of the aforementioned percentage.

   7. Develop an innovative entrepreneurship project that has a scalable business model.

   When the company belongs to a group of companies defined in article 42 of the Commercial Code, the group or each of the companies that comprise it must comply with the above requirements .

   Entrepreneurs who wish to benefit from the special features and advantages of Law 28/2022 must obtain the "certification of innovative and scalable entrepreneurship of the business model" referred to in Article 4 of the aforementioned law and be registered as such in the Commercial Registry or in the competent Registry of Cooperatives.

   Regarding entrepreneurship certification, see Order PCM /825/2023, of July 20, which regulates the criteria and procedure for certification of emerging companies that provide access to the benefits and specialties recognized in Law 28/2022, of December 21, on the promotion of the ecosystem of emerging companies.

2. The direct or participation of the taxpayer, together with that held in the same entity by his her spouse or any person related to the taxpayer by kinship, in a direct or collateral line, by consanguinity or affinity, up to the degree included, may not exceed, during any day of the calendar years of holding the participation, 40 of the entity's share capital or its voting rights.

   Exception: This requirement will not apply to the founding partners of a start-up company referred to in Law 28/2022, of December 21, on the promotion of the start-up ecosystem, understood as those who appear in the public deed of incorporation of the company.

3. That they are not shares or interests in an entity through which the same activity is carried out previously carried out through another ownership.

3. Formal requirements

Regulations: Art. 68.1.5 Law Income Tax

Compliance with these requirements must be accredited by a certification issued by said entity in the tax period in which the acquisition took place.

To do so, the entity that meets the requirements must submit a information declaration in relation to compliance with the requirements, identification of its shareholders or participants, percentage and period of holding of the participation.

Note: The obligation to submit an information return by newly or recently created entities and the information that must be included is established in article 69.1 of the Personal Income Tax Regulations .

Also, in relation to this informative declaration, see Order HAP /2455/2013, of December 27, approving model 165, “Informative declaration of individual certifications issued to partners or participants of newly or recently created entities” and determining the place, form, deadline and procedure for its presentation, and amending the Order of July 27, 2001, approving models 043, 044, 045, 181, 182, 190, 311, 371, 345, 480, 650, 652 and 651, in euros, as well as model 777, payment or refund document in the case of late and complementary declarations-settlements, and establishing the obligation to necessarily use the models in euros from now on. of January 1, 2002 ( BOE of 31).