Following completion of the required parliamentary procedures and subsequent publication at the end of September 2022, the Government of Spain has brought into force the “Crea y Crece Law” (Law 18/2022 of 28 September, on the creation and growth of companies).
The objective of this new law is to “improve the business climate by promoting business creation and growth through the adoption of measures to speed up the creation of companies; improving regulation and removing obstacles to the development of economic activities; reducing commercial delinquency and improving access to finance”.
The law establishes various measures, including; adjusting terms of the creation of Limited Liability Companies; promotion of electronic invoicing; fighting against late payment; improvement of regulation (deepening levels of cooperation with the government); as well as financial instruments for business growth.
One of the biggest new points covers electronic invoicing in the private sector. According to the text, “All entrepreneurs and professionals must issue, remit and receive electronic invoices in their business relationships with other entrepreneurs and professionals.”
A period of one year is established for implementation for companies that exceed an annual turnover of €8 million, while all other companies will have a period of two years to implement electronic invoicing.
Recipients may request a copy of the electronic invoice for up to four years following an invoice being issued.
When it comes to measures to promote and facilitate the creation of companies, the establishment of a €1 minimum share capital for a limited liability company stands out, alongside these two points:
- “A figure at least equal to 20 percent of the profit must be allocated to the legal reserve until said reserve together with the share capital reaches the amount of three thousand euros.”
- “In case of liquidation, voluntary or forced, if the assets of the company are insufficient to meet the payment of the social obligations, the partners will be jointly and severally liable for the difference between the amount of three thousand euros and the amount of the subscribed capital.”
The new law also includes measures to improve digital transformation by reducing bureaucracy, enhancing the use of CIRCE (Information Center and Business Creation Network) and PAE (Entrepreneur Service Points). For example, it establishes the obligation of notaries and intermediaries to share information about the advantages of using these services for assistance with a new entity’s constitutional articles, and to help expedite launch procedures.
Among other measures established by the new law, the disappearance of the New Company Limited Companies stands out (when title XII of the Capital Companies Law is revoked) and includes the recognition of Benefit and Common Interest Companies, which, according to the text itself, includes:
- “Its commitment to the explicit generation of positive social and environmental impact through its activity.”
- “Their submission to higher levels of transparency and accountability in the performance of the aforementioned social and environmental objectives, and the consideration of relevant stakeholders in their decisions.”
- “Through regulatory development, the criteria and methodology for validating this new business figure will be contemplated, which will include a verification of the company’s performance, subjecting both the criteria and the methodology to standards of maximum demand.”
With this “Crea y Crece Law” the Spanish government continues the measures focused on promoting the dynamism of Spain’s business fabric, framed within the context of next generation EU funds.
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For more information on this new law, speak to our team in Spain.