Entrepreneurs and job creation measures

Measures to support entrepreneurs and stimulate economic growth and job creation

The Council of Ministers approved a Royal Decree on measures to support entrepreneurship and spur growth in several areas including the following:

A)   Measures to promote entrepreneurship and self-employment of young people:

·        - It sets a fix fee of fifty euros in Social Security contributions for new self-employed people under thirty years old, for the first six months.

·         - It allows unemployment benefits compatible with the starting of an activity as self-employed, for nine months to people under thirty years old .

·         - Extending the possibilities of capitalization of unemployment benefit to start an entrepreneurial activity. Recipients of unemployment benefits under thirty may capitalize up to 100% of its provision for a contribution to the capital of a company, as long as the establishment of a working professional or a permanent labor relation.

·         - Resumption of payment of unemployment benefits. For people under thirty is extended from two to five years the length of the exercise of an activity that allows self-interrupt and thus resume collecting unemployment benefits.

B)   Approving further tax incentives in the personal income tax and corporation tax to support entrepreneurial projects. Specifically:

-The newly created companies will be taxed at a reduced rate of 15% (up to a taxable income limit of three hundred thousand euros and 20% (rest of the base) during the first two years in which a positive outcome.

-Self-employed people that initiate economic activities may apply a reduction of 20 per 100 in the net income obtained during the first two years in which they have a positive outcome.

Furthermore, the new law sets tax incentives to encourage self-employment. The unemployed who choose to become self-employed will enjoy full exemption of income tax on unemployment benefits when they perceive the benefits in a unique payment (until now only exempt up to 15,500 euros).

C)   It also includes measures involving incentives for hiring young people until the unemployment rate falls below 15%

-  Social Security Company's fees will be reduced by 75% for companies with more than 250 workers and 100% for the rest, when hiring part-time formative link under thirty years old without previous work experience or from sectors where there is not demand for jobs or who are unemployed for more than twelve months.

-Self-employed and businesses of up to nine workers will benefit from a reduction of 100% of the company's fee of Social Security for common contingencies during the first year of hiring permanently an unemployed under thirty.

-Contract "young people first job": changing the current “temporary contract for hire under thirty unemployed without previous professional experience”, with incentives to its transformation into permanent (bonus of five hundred euros/year for three years or seven hundred euros if it’s subscribed with women).

-Contract incentives are introduced in practice for those young people up to thirty years old that have completed their training period may have a first work experience related to their degree. There will be a reduction in the company's share of Social Security for common contingencies up to 50%.