Although we are already more than two months into 2023, there are still many unknowns to be cleared up in the regulation market for fintech. For now, we know that the regulatory framework of crypto assets and the digital euro will be two of the big issues on the agenda in the coming months, but it will be the Fintech sector that will surely attract attention.
With the entry of new technology companies, known as fintech, there have been changes in the regulatory and supervisory framework, such as the entry into force of the new regulations: the new Law of Startups and the Law of Digital Markets that join the Fintech Law, in force since December 2020.
“The creation and improvement of a much more developed regulatory framework in the fintech sector, far from posing a threat to the startups that are part of it, must become a guarantee seal for those companies that are doing a good job for the whole of the society“, Explain Pedro Garcia, CEO and co-founder of Unibo, the first neobank created specifically for real estate professionals. This expert points out that, on the contrary, “The aspect that would present a greater challenge is that the creation of this new regulatory framework does not imply a slowdown in innovation and the continuous improvement of the technological product and service, which is the essence of the sector.”
This new regulatory framework, which makes Spain a pioneer in the application of specific legislation for startups and emerging companies, can be summarized in two ways: administrative agility and tax benefits for individuals who are part of the sector, such as company founders, employees and external private investors.
As for improving administrative agility, this new Law on Startups proposes the creation of a single window for the certification of startups; the extension of the initial residence visa for foreign entrepreneurs from one to three years; the registration of the Social Security only with the passport; the ease of issuing the NIE, both electronically and in person; and the creation of a new visa for digital nomads.
The improvement of tax benefits
Regarding the improvement in tax benefits, the Startups Law applies a set of measures to improve the tax treatment of stock options for internal employees; the extension from 3 to 5 years the time in which a company is considered to be of recent creation; IRNR taxation (instead of IRPF) during the first five years for foreign professionals; and the reduction of bureaucratic procedures for foreign investors, who must only present the tax identification number (NIF) to the State Tax Administration Agency (AEAT).
For Pedro Garciathe entire package of measures of the new Startup Law, together with the regulatory framework established by the Fintech Law, can mean a significant acceleration in the development of the Fintech sector in Spain: “The Fintech sector is the first in which a general law applicable to startups and a Law specifically created for the sector itself will coexist. This combination increases the stability and security of entry for new companies and external investors, and as a consequence of this chain, there will be an exponential development in the sector. This is a milestone that the market itself needed to create a safe and reliable environment”.
Beyond financial regulation, 2023 will be key to the implementation of the new European regulation of Digital Markets. This new regulatory framework aims to ensure fairer conditions of competition with the big digital platforms.
“The application of new legislative measures in the digital environment is always directed towards user protection and market stability, and the Digital Markets Law (LMD) is an example of this. The entry of a body of the magnitude of the European Union was necessary in an area with as much uncertainty as the digital environment. In this sense, the Digital Markets Law will ensure compliance with ‘good conduct’ of the large platforms with digital users”, remains the CEO and co-founder of Unibo.
