There are several aids for entrepreneurship, for those who have decided to start a new career path. Or for those who have “the idea” and the disposition to carry it forward.
The experts of our Consultancy for Entrepreneurs give below a summary of these Aids for Entrepreneurship.
Aids for Entrepreneurship. Capitalization of Unemployment.
Unemployment Capitalization is the first Aid to Start a business that we can consider.
The Public Service of State Employment (SEPE), allows the collection of the unemployment benefit destined to start an activity. So that you can access the collection of 100% of the benefit pending to receive. This is what is known as capitalization of unemployment, being a measure aimed at promoting entrepreneurship.
This aid makes it possible to finance the initial investment in the entrepreneurship of the new business in the case of natural persons (self-employed). Or to be able to create or to join a cooperative, or a labor society or mercantile society, in all the cases like worker partner.
A few years ago, the measure was somewhat more conditional, not being accessible to everyone who wanted to start a business. Although today, these barriers have been eliminated. More and more people have started their business.
All those people who are unemployed, receiving a contributory benefit and consider the entrepreneurship in an autonomous way, must know the requirements, obligations and possibilities offered by the capitalization of the contributory unemployment benefit.
If the requirements detailed below are met, the amount received under this single payment modality will be exempt from Personal Income Tax (IRPF in Spanish)
Capitalization of Unemployment. Collection Options
There are several ways to start with capitalization of unemployment:
- Receive the current benefit amount by means of a one-off payment.
- Use the amount to pay the self-employed social security contributions.
- As a mixed option, the self-employed may not need to capitalize the total amount of the benefit. It is possible to use one part to start the business and another part to pay the self-employed Social Security contributions.
Who can apply?
- The interested person must be collecting the unemployment.
- They must not be registered with the Social Security.
- As a minimum, there must be three months of unemployment pending payment.
- If you have previously received this single payment method, at least four years must have elapsed before you can start a new application.
- If the legal situation of unemployment has arisen as a consequence of a previous dismissal, and a challenge has been initiated before the same, the single payment cannot be requested until a final resolution is established.
- Before the single payment request, the intention to start an activity in an autonomous way must be accredited.
- If the affected person becomes a self-employed worker, the benefit must be allocated to the investment necessary to carry out the activity. This means acquiring assets and contracting services that are necessary to be self-employed.
- If the person concerned decides to contribute funds to a mercantile company, either a new company or a company incorporated in the last year, effective control of the company must be acquired. Holding at least 50% of the shares.
Maintenance of Activity.
The IRPF exemption mentioned at the beginning of the article is conditioned to the maintenance of the autonomous activity for at least five years.
If the interested party is constituted as a self-employed worker, he must maintain the activity for at least five years.
If the money is contributed to a mercantile company, the interested party must not transfer his participation in the same period, five years.
Non-compliance with the Requirements
If the time limit is not met, the person concerned shall not be entitled to the exemption. Therefore, when making the personal income tax return for the year in which the non-compliance occurred, the amounts to which the exemption has been applied must be included. No penalties, but with interest for late payment.
Therefore, the capitalisation of unemployment is an attractive option for financing a project and having the amounts necessary to start up the business, with exemption from Personal Income Tax.
Aid for the Unemployed who become self-employed in the Community of Madrid.
For those who start a self-employed activity (either as self-employed individuals, members of Communities of Goods/civil society, members of trading companies or cooperatives), can access a grant of 80% of the expenses justified to the venture, whose minimum amount of subsidy will be € 750 and maximum in general will be € 2,500, which is extended to € 3,080 for certain protected groups, or up to € 4,580 if there is an investment in tangible and intangible fixed assets.
Aids for Entrepreneurship. Flat Rate for the Self-employed.
The Flat Rate for the Self-Employed from 01/01/2019, consists of a single monthly payment of 60€. This will include both common contingencies and professional contingencies.
But there are more alternatives, for those who opt for a contribution base higher than the corresponding minimum. During the first 12 months immediately following the effective date of the registration, a reduction of 80% on the contribution for common contingencies may be applied. The quota to be reduced is that resulting from applying to the minimum contribution base corresponding to the minimum contribution rate in force for common contingencies.
In addition, depending on age and other circumstances, they may be eligible for additional specific bonuses and/or extensions of the period of enjoyment of the bonuses in common contingencies.
In the specific case of the Community of Madrid, the Flat Rate is extended (depending on the aid to which it would have accessed), you can enjoy the Flat Rate of 60€, in the payment of their Social Security contributions during their first twenty-four or thirty-six months of initial registration. As long as they are or have been covered by the “Incentives and measures to encourage and promote Self-employment”. Or beneficiaries of the flat rate as long as they contribute on the general minimum basis that corresponds to them.
Aids for Entrepreneurship. Indefinite hiring in Madrid.
The CAM Indefinite Contracting Incentive Programme entitles them to a series of incentives. Incentives in the form of subsidies for hiring that result in a net increase in the company’s level of permanent employment.
It is aimed at both SMEs and the self-employed with a series of established amounts and general requirements.
Grants can range from 3,000€ to 7,500€. Depending on the group the employee to be hired belongs to. It will also be increased by another 2,500€, if this is the first contract made by the employer.
As we have shown, there are many grants currently available to encourage entrepreneurship. Although it is important to carry out an orderly planning, to be able to value and opt in the best conditions to the different aids in which in each case one is entitled.
If you need assistance in processing these grants, you can count on our experience. Do not hesitate to contact us.
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