USE OF THE UNEMPLOYMENT BENEFITS TO SET UP YOUR OWN BUSINESS

If you do not find a job, you are perciving unemployment benefit and have an entrepreneurial attitude perhaps you may be interested in knowing that you can use your unemployment benefits to start your own business. You can get in a single payment (“capitalización del desempleo”) all or part of the outstanding amount of perceiving.

Who can apply for the single payment?

Recipients of unemployment benefit that meet the following criteria:

• Having due to receive at least three monthly unemployment benefits payments.

• Not have been entitled to get the single payment in the previous 4 years .

• To get registered as self-employed person or incorporation as a cooperative partner worker , labor or business enterprise  and  start the activity within a maximum period of one month from the date of approval of the single payment.

How can you use the unemployment benefits to set up your own business? 

You have several options:

• Single payment (60%) If you had to invest in your business you can get up to 60% of your remaining unemployment benefits in a single payment and the rest will be offset every month from your self-employment quota. To receive it, you must indicate that you will use that cash to purchase capital goods (fixed assets), such as machinery, refurbishment of the premises, truck...

• Monthly payments: If you do not need to make an initial investment you can get your remaining unemployment benefits by monthly installments, offsetting them from your self-employment quotas. Managers and partners of enterprises must allocate the 100% of the remaining benefits to pay the national insurance quota not having the option of getting up to the 60% in a single payment.

Men up to 30 years , women up to 35  and people with a disability greater or equal than 33 % can apply to get  100 %  of the remaining  unemployment benefits in a single payment  in case they could need it.

With the approval of Royal Decree -Law 4/2013 of measures to support entrepreneurship and to stimulate growth and job creation in February 2013, it funded 100 % can be allocated to the investment required to develop the activity, even to pay the amount of taxes required to start of the activity, or to make a contribution to the stock capital of a newly formed business entity or incorporated within a maximum period of twelve months prior the perception of the single payment.

In addition, it may be used equally to satisfy formation and operation expenses of an entity, and the payment of advisers and solicitors fees, training and information related to the activity undertaken.

And last but not least there is and Income tax exemption of 100% of the remaining unemployment benefits that you get through the single payment. This tax incentive is effective from January 1, 2013 and is part of the emergency plan to encourage entrepreneurial activity approved by Royal Decree Law 4/2013 of 22 February 2013 .

Very important is that you consider that you have to ask the capitalization of unemployment before creating your company or set up yourself-employment, because if you do it the other way around you might find that you have no right to unemployment and can not receive the funding.

At the time of crisis that we are living with a high unemployment rate, many people see self-employment as a way out. We encourage you to carry it out, for which we discuss a way to get cash through capitalization of unemployment to be used in a new business, and remember that to set up your self-employment with VP Advisers is totally free.

For further details do not hesitate in contact VP Advisers