The Congress of Deputies has definitively approved the Law for the Creation and Growth of Companies (“Crea y Crece”) aimed at facilitating the creation of companies, reducing regulatory obstacles, combating late payments and boosting their growth and expansion.

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The “Crea y Crece” Law is one of the main reforms of the Recovery, Transformation and Resilience Plan, aimed at fostering the dynamism of the productive fabric and responding to the demands and recommendations of the different international organisations. The law has enjoyed broad support in the Congress of Deputies, the result of intense dialogue and parliamentary collaboration with the Autonomous Communities and all economic actors, which has allowed the incorporation of improvements during its processing.

The law promotes the creation of companies and facilitates their growth and expansion, especially SMEs, placing them at the centre of economic policy. Improving the process of business growth is essential, according to recent evidence, to increase productivity, the quality of employment and internationalisation, which are fundamental elements for increasing the competitiveness of companies and boosting economic growth.

Furthermore, the regulation reduces and speeds up the formalities and conditions for setting up a Limited Liability Company, encourages its growth through regulatory improvement, generalises the use of electronic invoicing, establishes measures to combat late payment in commercial transactions and promotes alternative financing by boosting mechanisms such as crowdfunding, collective investment and venture capital.

Setting up a company will be easier and faster
The “Crea y Crece” Law facilitates the creation of a company by reducing the economic cost and simplifying the procedures for its incorporation.

To this end, it establishes the possibility of setting up a Limited Liability Company with a share capital of 1 euro, as opposed to the legal minimum of 3,000 euros established until now, allowing companies to use these resources for alternative uses and facilitating the creation of new businesses.

In this way, Spain is in line with most of the countries around us in which no minimum capital is required, thus favouring entrepreneurship.

It also facilitates the online incorporation of companies through the one-stop-shop of the Information Centre and Business Creation Network (CIRCE), which guarantees a reduction in the time it takes to set up a company and in notary and registry costs.

Measures to encourage business growth
In addition, the draft bill improves the efficiency of the regulatory framework for economic activities by simplifying existing legislation, eliminating unnecessary regulations and establishing more streamlined procedures.

The Law on trade liberalisation measures is amended, extending the catalogue of economic activities exempt from licensing. Activities that have been considered innocuous by at least one autonomous community are incorporated into the list of basic state regulations.

Likewise, the Market Unity Guarantee Act is amended to strengthen cooperation between the different public administrations and the mechanisms for protecting companies and consumers against measures that do not respect the principles of proportionality and necessity.

Measures to combat late payment
The regulation also includes measures to make progress in the fight against late payment in commercial transactions, one of the causes that have the greatest impact on the liquidity and profitability of many Spanish companies, with a particular impact on SMEs.

To this end, the obligation to issue and send electronic invoices in all commercial relations has been extended to companies and the self-employed, which will guarantee greater traceability and control of payments. This measure, in addition to reducing transaction costs and representing a step forward in the digitalisation of companies’ operations, will make it possible to obtain reliable, systematic and agile information on effective payment deadlines, an essential requirement for reducing commercial default.

It also establishes that companies that do not comply with the payment deadlines established in the Late Payment Act (Act 3/2004, of 29 December, which establishes measures to combat late payment in commercial transactions) will not be able to access a public subsidy or be a collaborating entity in its management.

Finally, the creation of a State Observatory on Private Delinquency is envisaged, which will monitor and analyse data on payment deadlines and promote good practices. Its actions include the publication of an annual list of defaulting companies (legal entities that fail to pay more than 5% of their invoices on time and whose total amount of unpaid invoices exceeds 600,000 euros).

Also included in the Capital Companies Act and the Late Payment Act is the obligation for large companies to indicate in their annual reports the average payment period to their suppliers or the number of invoices paid in a period shorter than the maximum established in the late payment regulations.

Strengthening financing
The regulation incorporates measures to improve financing instruments for business growth as an alternative to bank financings, such as crowdfunding or participatory financing, collective investment and venture capital.

In the area of crowdfunding, the Crea y Crece Act adapts national regulations to European regulations, introducing more flexibility for these platforms to provide their services in Europe. In addition, investor protection is strengthened and the creation of vehicles for group investors is allowed in order to reduce management costs. To broaden the universe of eligible business projects, the investment thresholds per project are raised (from EUR 2 million to EUR 5 million) and the investment limits per project for retail investors are modified to the higher of EUR 1,000 or 5% of the wealth.

The venture capital industry is boosted, broadening the type of companies in which these entities can invest, including financial companies with a high technological component.

Finally, the figures recognised for closed-end funds are extended, including structures with a long track record in other countries in our environment. These are debt funds that can invest in loans, invoices or commercial bills, contributing to and improving the business financing of companies whose financial structure has deteriorated as a result of the pandemic.

In relation to Collective Investment Institutions, the mandatory nature of the quarterly report is eliminated, telematic means are established as the default means of communication and the investment diversification regime for venture capital entities is made more flexible.

This Thursday, the Plenary of Congress approved by majority some of the amendments that the Senate has incorporated into the bill, so the initiative thus concludes its parliamentary processing and the text is ready for publication in the Official State Gazette and its subsequent entry into force.