Startup Law: tax benefits and how to qualify in 2026
Startup Law: tax benefits, requirements and ENISA certification to qualify as a startup company in 2026.
Updated as of 26 August 2026. The data comes from the consolidated text of the legislation in the BOE. This article is for information purposes and does not replace professional tax advice.
TL;DR
Law 28/2022 on the promotion of the startup ecosystem —the so-called Startup Law— creates a specific tax regime for young, innovative and scalable companies, whose main benefit is a 15% Corporate Income Tax rate instead of the standard rate. To qualify, companies must obtain ENISA certification, which confirms that they meet the requirements set out in Article 3.
Among those requirements, one is often overlooked and disqualifies more projects than it may seem: the company must have its registered office, corporate domicile or permanent establishment in Spain. Without this, none of the other benefits are available.
What is a startup company under the law?
It is worth starting here because "startup" in everyday language and "startup company" within the meaning of Law 28/2022 are not the same thing. Many companies that describe themselves as startups do not fit the legal definition, while many that have never used that label fit it perfectly.
The legislation does not define the category by sector or by the style of the company, but by a set of objective conditions that are checked one by one. It does not matter whether you operate in technology or the food industry: what is examined is the company's age, size, ownership structure and, above all, the innovative and scalable nature of the project.
This distinction matters a great deal in practice, because it determines whether or not you can apply the regime. And there is one consequence that should be clear from the outset: meeting the requirements is not enough; the company must be certified. A company that meets all the conditions but has not gone through ENISA cannot apply the tax provisions of this law, however clearly it may qualify on paper.
What exactly are the requirements?
Article 3 of the Startup Law lists the conditions, and they must all be met simultaneously. This is not a list from which some can be selected and others ignored.
Age. The company must be newly incorporated or, if it is not, no more than five years may have elapsed since its registration. This period is extended to seven years for biotechnology, energy and industrial companies, sectors that the legislation recognises as having longer development cycles.
Presence in Spain. The law requires the company to have its "registered office, corporate domicile or permanent establishment in Spain". This is an entry requirement and we will return to it below, because it has practical implications that surprise quite a few projects with founders based outside the country.
Workforce. At least 60% of the workforce must have an employment contract in Spain. This is a requirement that often goes unnoticed in distributed teams and is worth checking before applying for certification, not afterwards.
Size and structure. The company must not exceed ten million euros in turnover, must not be listed on a regulated market and must not have distributed or distribute dividends. This last point is one of the requirements most often breached without anyone noticing in time, and it deserves a conversation with your adviser before any distribution is made.
Innovative and scalable nature. The company must develop an innovative entrepreneurial project with a scalable business model. This is the most open-to-interpretation requirement of all and, consequently, the one that carries the greatest weight in ENISA's assessment.
What are the tax benefits of the Startup Law?
Let us turn to the part that motivates the process, and which gives the Startup Law benefits their name. The main benefit is set out in Article 7 and is straightforward: startup companies are taxed at 15% for Corporate Income Tax, compared with the standard rate.
The duration is precisely defined, and it is worth reading carefully because it is not calculated in the way many people assume: it applies in the first tax period in which, while holding startup company status, the taxable base is positive, and in the following three periods, provided that the company continues to meet the conditions. In other words, the clock does not start when the company is incorporated, but in the first financial year in which it makes a profit. For a company that takes three years to become profitable, this means the incentive arrives when it is genuinely useful.
Alongside this reduced rate, the regime includes other benefits that are usually mentioned together: the possibility of deferring tax debts under specific conditions, exemption from the obligation to make advance tax payments, more favourable taxation of stock options —with an exemption threshold well above the general one, designed to help young companies retain talent without cash— and a Personal Income Tax deduction for those investing in newly or recently incorporated companies, aimed at encouraging private investment.
Our recommendation here is specific: ask your tax adviser to quantify these benefits for your particular case before assuming that they justify the process. For a company that does not expect a positive taxable base for several years, the main incentive is still some way off and there may be more urgent priorities. For one that is already generating revenue and growing, the difference between tax rates can be highly significant.
How do you obtain ENISA certification?
Article 4 designates ENISA —Empresa Nacional de Innovación— as the body responsible for assessing and certifying startup company status. Without this step, the regime cannot be applied, so it is the gateway to everything else.
The application is made electronically and what is assessed, essentially, is the innovative and scalable nature of the project. Factors considered include the development of new or significantly improved products, services or processes, the existence of R&D&I activities, industrial or intellectual property registrations, and whether public or private funding has been obtained for innovation. You can consult the body's official information at enisa.es.
In practice, what makes the difference between an approved and a rejected application is almost never the quality of the project: it is how it is documented. A genuinely innovative company that submits a generic report will have a harder time than one that explains precisely what problem it solves, what its innovation consists of and why its model is scalable. If you are going to apply, devote time to that report or commission it from someone with experience in preparing this type of documentation.
And what about the registered office? The requirement that catches most projects off guard
This section is particularly close to our work, so we will start by stating it openly: at Centro de Negocios Ibercenter we provide a business address service, which is why we encounter this issue frequently. That said, this is not a requirement we have invented: it is set out in Article 3 of the law.
The legislation requires a registered office, corporate domicile or permanent establishment in Spain. For a Spanish company incorporated here, this is already dealt with. The situation that generates enquiries is different and increasingly common: founders who live abroad, teams distributed across several countries, or projects incorporated in Spain to access the European market without yet having a physical office.
In these cases, two needs arise at the same time. One is formal: a valid registered office, with receipt of notifications —including those from the Spanish Tax Agency and Social Security— and the ability to provide proof of it. The other is practical: a place to meet investors, clients or the team itself when needed, without committing to a multi-year lease that a two-year-old company should not be signing.
This is exactly the gap a business centre fills. At our three Madrid locations —Velázquez 157, AZCA and Gran Vía 6— we work with companies in this situation: business address services with mail handling, private offices when real workspace is needed and meeting rooms by the hour for occasional use. However, and this is important: a business address service satisfies the formal address requirement; it does not turn a company into a startup company. The remaining Article 3 requirements must still be met, and your adviser is the person who should assess your particular case.
What mistakes can cause a company to lose its status?
Obtaining certification under the Startup Law is not the end of the process: the status must be maintained, and the tax regime applies only while the conditions continue to be met. There are four oversights that appear time and again.
The first, and the most painful because it is usually a voluntary decision, is distributing dividends. The law is explicit: the company must not have distributed and must not distribute dividends. A distribution approved without taking this into account can bring the entire regime to an end.
The second is growing beyond the thresholds without having planned for it. Exceeding ten million euros in turnover is good news for the business and, at the same time, the end of this particular regime. That is not a problem, but it is worth including it in tax planning rather than discovering it when closing the financial year.
The third is the passage of time. The five years —or seven in the specified sectors— run from registration, not from the date certification is requested. The sooner the process is completed, the more years of the regime remain available.
And the fourth concerns structure: corporate changes that alter any of the requirements, including workforce composition if the proportion employed under Spanish employment contracts falls below 60%. In teams that grow by hiring abroad, this is a threshold that can be crossed unintentionally.
Is it worthwhile for your company to qualify?
As with almost everything in taxation, whether it is worthwhile for your company to qualify under the Startup Law depends on the specific case, but there are three fairly clear profiles.
It is clearly worthwhile when the company is close to having a positive taxable base or already has one, when the project has an innovative component that can be documented and when there is an intention to raise investment or reward the team with equity. In that scenario, the benefits add up and the process quickly pays for itself.
It is less worthwhile when the company is still far from generating profits, has no plans to raise investment or use stock options, and the management team is short on time. The main incentive would arrive years from now, while the documentation effort is required today. It is not that it serves no purpose; it may simply not be this quarter's priority.
And it does not fit when one of the objective requirements is not met and there is no reasonable way to remedy it: the age limit has already been exceeded, the workforce structure falls outside the threshold, or the project is difficult to justify as innovative and scalable. In those cases, the sensible approach is to explore other incentives with your adviser rather than forcing an application.
Whatever your situation, the conclusion is the same one we always give on these matters: this is a decision for a tax adviser with your figures in front of them. We provide the part that corresponds to us —the address and the workspace— and for everything else, rely on the professional who manages your accounts.
How is it different from other schemes and forms of support?
A very common source of confusion around the Startup Law —and one that leads to wasted time and rejected applications— is mixing up startup company status with other categories that sound similar but are not the same.
It is not the same as being an SME. The small and medium-sized enterprise category is based on European workforce and balance-sheet criteria, and other support programmes depend on it. A company can be an SME without being a startup company, or a startup company while also qualifying as an SME. They are different labels with different effects, and the benefits of the Startup Law are available only through certification.
It is not a loan or a grant. ENISA is well known for its financing programmes for young companies, which creates a common misunderstanding: in this case ENISA does not provide funding; it acts as the assessment body that certifies a status. A company can hold the certification without ever having received ENISA financing, and vice versa.
And it does not replace R&D&I incentives. Tax deductions for research and development activities have their own regime under Corporate Income Tax legislation and apply independently of this law. In fact, a company that already documents R&D&I in order to deduct those expenses has much of the work already done when it comes to demonstrating its innovative nature to ENISA. It is worth reviewing both routes at the same time with your adviser, because the documentation can be reused.
How should the application be prepared step by step?
If, after reading the requirements, you believe your case fits, this is the order of work we recommend. It is not the formal administrative procedure —that is set out by the body itself— but the preparation beforehand, which is where applications are won or lost.
First, check the objective requirements. Before writing a single line of the report, verify everything that leaves no room for interpretation: registration date and years elapsed, turnover for the last financial year, percentage of the workforce under Spanish employment contracts, dividend status and registered office. If any of these fail, the rest of the effort is unnecessary. Half an hour of work here can prevent weeks of wasted effort.
Second, build the innovation case with evidence. This is where everything is decided. It is not enough to state that the project is innovative: the claim must be supported with verifiable evidence. Industrial or intellectual property registrations, documented R&D&I projects, public or private funding obtained for innovation, proprietary developments that significantly improve what already exists. The more verifiable elements you can provide, the less room there is for interpretation.
Third, explain why the model is scalable. This is the companion requirement to the previous one and the one that is most poorly argued. Scalability does not mean wanting to grow a lot: it means revenue can grow without costs increasing in the same proportion. If your model depends on hiring one additional person for every new client, that needs to be addressed in the report, not avoided.
And fourth, organise the corporate documentation. Deeds, articles of association, accounts if available, shareholder structure and proof of the registered office. Having everything gathered before starting the process allows it to move forward without interruptions, which is precisely what shortens the actual time required.
What if the application is rejected?
This is a scenario worth considering before you start, because a rejection is not the end and does not necessarily have to be final. Knowing this changes the way the process is approached.
Rejections almost always arise from one of two causes, and they are very different. The first is failure to meet an objective requirement: more than five years have elapsed, fewer than 60% of the workforce are employed under Spanish contracts, dividends have been distributed. No report can overcome that, and the only option is to correct the situation where possible or accept that this regime does not apply.
The second is a negative assessment of the innovative or scalable nature of the project, and here there is room to act. Many rejections of this type do not reflect a project that lacks innovation, but a project that has been poorly explained: generic reports, lack of documentary evidence, or a scalability argument that simply projects growth without explaining how that growth can be sustained. In these cases, gathering the missing documentation and resubmitting with a better-constructed report is a reasonable route.
Our practical advice, whether this is your first application or you are applying again: treat the report for what it is, a technical document that will be read by someone who does not know your sector, not as a commercial presentation. Investor language —disruption, revolutionising the market— carries little weight here. What matters is verifiable evidence. And if the project is solid but you do not have the time or experience to write this kind of documentation, commissioning it from a professional is often cheaper than missing an application window.
Frequently asked questions about the Startup Law
How long does ENISA certification take?
The procedure is designed to be resolved within a defined timeframe and at no cost to the applicant company. What most affects the actual duration is the quality of the documentation submitted: a well-constructed report that explains innovation and scalability clearly avoids additional information requests that lengthen the process.
Can I apply the 15% rate from the first year?
Only if you have a positive taxable base in that first year. The law applies the reduced rate in the first tax period with a positive taxable base while the company holds startup company status, and in the following three periods. If your company becomes profitable in year three, that is when the benefit starts to run, not before.
Can a business address service satisfy the presence requirement?
The law requires a registered office, corporate domicile or permanent establishment in Spain, and a business address service satisfies the registered-office requirement by providing an address and receipt of notifications. However, it is only one of the requirements under Article 3: it does not replace the others or, on its own, turn a company into a startup company. Your adviser must confirm that your particular case qualifies.
What happens if I distribute dividends?
The law requires companies not to have distributed and not to distribute dividends, so a distribution jeopardises startup company status and, with it, the associated tax regime. It is one of the most common reasons for losing the regime and, because it is a voluntary decision, also the easiest to avoid if advice is sought beforehand.
Is my company "innovative" for the purposes of the law?
You do not decide that, and neither do we: ENISA assesses it. Factors in that assessment include the development of new or significantly improved products, services or processes, R&D&I activities, industrial or intellectual property registrations and financing obtained for innovation. The more of these elements you can document, the stronger the application will be.
