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Law 18/2022 on the Creation and Growth of Companies

On 29 September 2022, new Law 18/2022 of 28 September on the creation and growth of companies (“Law 18/2022”) was published and enters into force 20 days after its publication, i.e. 19 October 2022, except for art. 12 on electronic invoicing in private sector and chapter V on legal regime of crowdfunding platforms.

Law 18/2022 is part of Component 13 on “Boosting SMEs” of the Recovery, Transformation and Resilience Plan, approved in the framework of the NextGenerationEU Plans. These plans are a temporary instrument designed to boost the EU’s recovery from the COVID-19 pandemic by providing funding of more than €800 billion.

The law aims to boost business creation and growth, the two most critical stages, which are continuously affected or hindered by existing costs and disincentives, stemming from regulatory and administrative barriers, failures in the single market or the existence of bad practices in the payment of suppliers.

The measures set out in Law 18/2022 can be grouped as follows:

  1. Measures to speed up the creation of companies: measures such as the possibility of setting up a limited liability company with a share capital of 1 euro; or the promotion of a faster, more agile and telematic business creation process, through the Information Centre and Business Creation Network (“CIRCE”).
  2. Measures to improve regulation and to eliminate obstacles to the development of economic activities: this includes measures such as the extension of activities that do not require a licence to operate; or the modification of the Market Unity Guarantee Law in order to reduce procedures and facilitate business complaints in the event of non-compliance with the principles of good regulation by the administrations.
  3. Measures to reduce commercial delinquency: measures such as the obligation of electronic invoicing in business areas; the creation of new institutions to effectively monitor non-payment; and the promotion of good practices are included.
  4. Measures to boost financing instruments: measures such as the introduction of a new legal regime for participatory financing platforms (“crowdfunding platforms”); the expansion of companies in which venture capital institutions can invest; or the recognition of so-called debt funds.

Finally, Law 18/2022 is used to make amendments relating to the prevention of money laundering and the financing of terrorism; and to the protection of customers of credit institutions.

Dikeos Abogados will carry out a series of explanatory publications on each group of measures.

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