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FREELANCING

UPDATE: How small businesses in Spain can get €12,000 for digital improvements

Spain's government recently unveiled how autónomos and small companies can apply for up to €12,000 in funds to improve the digital side of their businesses, a scheme which now also includes companies with 3 to 9 employees. Here's everything you need to know.

UPDATE: How small businesses in Spain can get €12,000 for digital improvements
If you're self-employed or run a small business in Spain, you can now apply for ways to improve your website, online marketing campaigns or social media presence with up to €12,000 in digital improvements. Photo: photosforyou/Pixabay

The Spanish government first announced its digital improvement programme back in November 2021, but it wasn’t until March 15th 2022 that the specific details of the scheme were revealed. 

The ‘Kit Digital’ programme, as it has been called, will run until 2023 with an initial investment of €500 million.

Initially, it was only available to self-employed workers and companies with between 10 and 49 employees, but as of June 22nd 2022, it is now open for those with between 3 and 9 employees as well. 

Autónomos (self-employed workers) and small business owners in Spain have had a tough time during the pandemic, whilst also having to pay some of the highest social security contributions in Europe.

The Spanish government’s new ‘digital kit’ is aimed at helping many of these small business owners out by covering the cost of digital improvements, from their websites to social media management and marketing campaigns.

READ ALSO – Self-employed in Spain: What you should know about being ‘autónomo’

How will the ‘Kit Digital’ work?

The Digital Kit funds will be distributed in the form of vouchers of up to €12,000 for small companies and autónomos who want to undertake a digital transformation of their businesses.

These vouchers will then be passed on to ‘digital agents’ – a series of companies authorised by the government to develop these projects, which they call “digital solutions”. That means that self-employed workers and small businesses will not receive the funds directly nor be able to choose which company to hire for the digital improvements.

Instead, it will be the digital agents who receive the final payment and will take care of the paperwork and digital improvements. Currently, there are already more than 3,000 companies authorised as digital agents, although the list is expected to continue to grow in the next few weeks.

Please note that €12,000 in funds is the highest amount and will only be available to businesses with the need for a complete digital overhaul. 

What digital improvements are available?

The digital transformation projects which can be financed with the Digital Kit fall into several different categories, which the government defines as:

  • The creation of web pages and visibility of the company on the internet (Google rankings, SEO)
  • Electronic commerce
  • Social media management
  • The improvement and digitisation of customer management systems
  • Business intelligence and analytics
  • Virtual office tools and services
  • Digitisation and automation of business processes
  • Electronic billing
  • Secure communications
  • Cybersecurity

Who will be eligible for the Digital Kits?

In order to be eligible for the Digital Kits, you must:

  • Be a small business, micro business or autónomo (A small business is considered to be one that has more than 10 employees and no more than 50 and a micro business has less than 10 employees whose annual turnover does not exceed €2 million).
  • Meet the financial and cash limits that define the categories of each type of company
  • Not be considered a company in crisis
  • Be up to date with tax and social security payments
  • Not be subject to an outstanding recovery order from the European Commission

When can I apply?

The Asociación de Autónomos (ATA) has confirmed to The Local that small businesses with between 10 and 49 employees are able to apply for the Digital Kits any time up until 11am on September 14th 2022. Meanwhile, those with between 3 and 9 employees are able to apply from June 22nd 2022. 

If you want to be in with a chance of receiving one, you should apply as soon as possible, as the aid will be granted on a first-come-first-served basis, depending on your needs and funds are already running out. 

ATA also confirmed that micro-businesses with just two employees can apply from September. 

How do I apply?

In order to apply, you must register at www.acelerapyme.es and complete the self-diagnosis test. This will allow the government to know what level of digitisation your company has already and what you need. 

Remember, those businesses that have already registered will be given priority. 

You can also request ATA to help you apply for the kits by filling out the form found at https://autonomoskitdigital.es/.

You can then check the catalogue of digital solutions, where you can choose one or several of those offered by digital agents that best suit the needs of your business.

Next, you will request the Digital Kit aid at the Red.es electronic office (sede.red.gob.es) and complete the associated form.

Once your request for a Digital Kit has been granted, you will be able to access the catalogue of digital agents and decide which one you want to work with, before signing an agreement to start your project.

According to the latest stats available, there are approximately 2.9 million SMEs in Spain (around 70 percent in the services sector), and around 3 million autónomos. 

READ ALSO: How to set up an online shop in Spain

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TAXES

The tax cuts and other benefits Spain’s new Startups Law will bring to entrepreneurs

Foreign entrepreneurs have been waiting for years for Spain's highly anticipated Startups Law to be finalised. The latest news is that it will come into force in September 2022; and new details on the benefits it will bring have also been released.

The tax cuts and other benefits Spain's new Startups Law will bring to entrepreneurs

Spain’s new Startups Law, which the Spanish government first announced in 2019, could finally come into force in September 2022, as indicated by Economy Minister Nadia Calviño. 

For the first time, Spain will have a law directly aimed at the particularities of small technology-based companies. 

The new Startups Law hopes to attract foreign companies, making it easier for startups to choose Spain by giving them incentives such as tax reductions. 

Although there is still a long way before the final text of the Startups Law is published, and it may have to go through several amendments yet, here’s the latest on the draft law so far and the benefits it will bring.

There will be no obligation to pay the social security self-employed fee for multiple activities

One of the most important announcements is the elimination of having to register as self-employed (autónomo) in the Special Scheme for Self-Employed Workers (RETA) for three years, provided that the entrepreneur who launches the startup is in turn hired as an employee by another company.

This is the case for 25,000 self-employed workers in Spain who currently combine working for themselves with being hired by someone else.

Overall, it’s good news as Spain’s social security fee is among the highest in Europe at €294 a month. 

Self-employed workers will have three chances to benefit from the new law

The failure of a business is something that is being contemplated for the first time in legislative text in Spain.

The startup bill will make serial entrepreneurship easier, meaning that a freelancer who has started a business, which ultimately doesn’t work, can try again and can continue to benefit from the same advantages. Specifically, entrepreneurs are allowed to benefit from the Startups Law up to three times.

Improvement in the tax treatment of stock options

Stock options are often a form of remuneration for work that is frequently used in startups. It consists of offering directors or employees the possibility of obtaining shares of the company where they work. Specifically, the tax exemption amount will rise from €12,000 to €45,000.

In addition, tax will only be paid on these shares when the sale of them takes place, or when the company goes public.

Deduction in Corporation Tax to 15 percent

It will give startups and investors a reduction in Corporation Tax from the current 25 percent to 15 percent. 

The elimination of obstacles for foreign investment 

One of the main problems foreign investors encounter when they want to invest in a Spanish startup is bureaucracy.

As a result of this, the new law aims to eliminate the obligation for international investors to request a NIE (foreigner ID number) to carry out this type of action. Both investors and their representatives will only need to obtain Spain’s tax identification numbers (NIFs).

Tax breaks

The new law includes a series of tax benefits in order to make national investment more attractive.

The maximum deduction base for investment for newly or recently created companies will be raised from €60,000 to €100,000 per year and the type of deduction will increase from 30 to 50 percent.

The period of time that a company is considered ‘recently created’ will increase

The period that is considered ‘recently created’ for eligible companies will go up from 3 to 5 years old. For biotechnology, energy or industrial companies, the bracket is wider still – 7 years.

Who will be able to benefit from Spain’s new Startups Law?

The Startups Law is open to anyone from the EU or third countries, as long as they haven’t been resident in Spain in the five previous years. It will allow them to gain access to a special visa for up to five years. 

This visa will be open to executives and employees of startups, investors, and remote workers, as well as their family members. 

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