
We are living in a turbulent era, and many of the great paradigms that have guided our lives are undergoing rapid change, with economic cycles clearly becoming increasingly shorter than ever. However, from Fellow Funders’ point of view, we are experiencing exciting times full of opportunities.
From the point of view of entrepreneurship and alternative investment, the last months of 2022 have brought good news and, in many cases, real early gifts from the Three Wise Men. We are referring to two laws that will radically impact our world. In our opinion, they should serve to help our country to establish a global position as a focus for the new economy and new entrepreneurs:
- On the one hand, the new Law for the Creation and Growth of Companies (Ley de Creación y Crecimiento de Empresas in Spanish), more commonly known as the Crea y Crece (Create and Grow) Law, was approved in September. This Law includes the adaptation of the European Regulation for PFP (Crowdfunding Platforms), which are now called PSFP (Crowdfunding Service Providers).
- On the other hand, a new Law for the Promotion of the Emerging Companies (Ley de Fomento del Ecosistema de las Empresas Emergentes in Spanish), better known as the Startups Law, came into force in December.
Crea y Crece Law
This law is one of the core reforms of the Recovery, Transformation, and Resilience Plan approved by the Spanish Congress of Deputies in 2022. According to the legislators, its main objectives are to boost the creation of new companies and facilitate the growth of the existing ones, besides tackling commercial delinquency.
Some of the principal novelties of this law referring to the world of entrepreneurship and investment are:
- The possibility of creating a company with an initial contribution of €1, as opposed to the minimum €3,000 that was previously required.
- New technologies implementation to perform company incorporation procedures telematically with CIRCE (Information Center and Business Creation Network) and the Documento Único Electrónico (Single Electronic Document).
- Expansion of the range of companies that can be invested in by Venture Capital Entities.
- Establishment of a new legal regime for PFP (Crowdfunding Platforms), now called PSFP (Crowdfunding Service Providers). The goal is to adapt the Spanish legislation to the European Regulation 2020/1503. Some of the aspects contemplated are:
- PFSPs will be able to provide their services freely throughout the European Union without obtaining separate authorization in each member state.
- Equity crowdfunding rounds of up to five million euros are allowed, thus increasing the investment ‘ceiling.’
- Authorization to create vehicles for investors to group their investments, as opposed to direct investment.
- Investors are classified into sophisticated and unsophisticated investors depending on their level of investment knowledge. There will be no investment limits for either group.
- To ensure transparency and protection of investors, those considered unsophisticated will have to undergo a suitability test and risk simulation.
- Before each investment, the PFSPs assess whether the investment is suitable for the investor’s needs. For this purpose, they rely on past investment experience, investment objectives, financial situation, and knowledge of risks.
- A four-day cooling-off period is implemented for investments.
- PFSPs are not allowed to invest in their own projects.
- PSFP rounds will no longer be subject to a minimum underfunding of 90% and a maximum overfunding of 125%.
- A new portfolio management category is included that will allow the PSFP to invest funds on behalf of the investor.
All these new features, based on the laws already implemented in many of our neighboring countries, have a twofold objective:
- To facilitate entrepreneurship and help them to create wealth through companies that provide greater added value. To simplify administrative procedures, reduce the minimum amounts required to set up companies, access to greater sources of financing… In short, all these aspects should help entrepreneurship to grow.
- To allow private and professional investors to benefit from more information, achieving more transparency and better protection. In the same way, they will be able to access more relevant projects and more personalized and adequate services to their investor profile.
Startup Law
The Startup Law is the first to focus on this type of company. The explicit objective is to support the creation of an entrepreneurial and innovative ecosystem, enabling the creation and scaling of startups and promoting innovation and technological development. Among the novelties brought about by this law are the following:
- Modifies the definition of a startup. We are dealing with a company that is no more than five/seven years old (depending on the sector), is not listed on the stock exchange, and does not distribute dividends. The company must have its registered office in Spain. Moreover, a minimum of 60% of its workforce must be employed in this country. To qualify as a startup, it must demonstrate its innovative character through new or improved services.
- Promotes administrative agility, achieving the verification of companies as startups telematically.
- Improves knowledge sharing with general regulation and controlled testing.
- Updates tax benefits and incentives such as reducing the Corporate Income Tax (IS) and Non-Resident Income Tax (IRNR) of the general rate, decreasing it to 15% in both cases.
- Allows the delivery of shares or participations to the employees of startups, raising from three to five years the term to subscribe the shares or participations from the incorporation of the entity.
- The tax regime for displaced persons (Beckham Law) is modified, reducing from 10 to 5 years the period to obtain this special regime.
- Foreign investors wishing to invest in Spanish startup companies will only have to apply electronically to the Tax Administration for a tax identification number (NIF). It will, therefore, no longer be necessary to obtain a foreign identity number (NIE).
- Improves taxation for residents. As of January 1, 2023, the Personal Income Tax (IRPF in Spanish) deduction, applicable to those who make investments in newly created companies that meet some requirements, will have a deduction of 50% (compared to the previous 30%), with a maximum deduction base of 100,000 euros (compared to 60,000 euros previously).
At Fellow Funders, we expressed the need for a radical transformation in the entrepreneurship and related investment world. We have also demanded the transposition to our legislation of the best practices in force in the countries around us (articles Annual Letter from Fellow Funders by Francisco Mariscal (CEO) and Letter to the Entrepreneur Wise Men by Oscar Valles (Head of Research & Analysis)). In these articles, we mentioned the obligation, in our opinion, of drafting a specific law for Startups, the necessary administrative simplification, and the possibility of increasing tax benefits for entrepreneurs and investors.
At Fellow Funders, we continue to believe that SMEs (including startups), the main generators of employment in our country, must leap forward qualitatively (mainly through technology and professionalization) and quantitatively (gain size and internationalize) to consolidate the productive model in Spain and generate added value and wealth.
Our goal is to become a ‘Private Investment Platform’ or, in other words, the first multi-sector equity crowdfunding platform in Spain by gradually incorporating new products and services. However, the new legislation has set us an even more ambitious goal: to become the Spanish platform accredited as a reference to operate within the framework of European Law. With this objective in mind, we are processing all the necessary documentation to officially announce it.
The ultimate goal, as we have stated on many occasions, is to continue helping Spanish startups and SMEs to scale and consolidate, entrepreneurs and businessmen to become more professional, and investors to access attractive and different opportunities.
Never before has entrepreneurship been so easy. Never before has investing in alternative investments been so transparent and professional.
Will you join us…?

Juan Sánchez Margareto
Senior Analyst