Law 11/2013 of 26 July on measures to support entrepreneurship and stimulate growth and job creation

OFFICIAL STATE GAZETTE No. 179 Saturday, July 27, 2013 Sec. I. Page 54984 I. GENERAL PROVISIONS HEAD OF STATE 8187 Law 11/2013, of July 26, on measures to support entrepreneurship and stimulate growth and job creation. JUAN CARLOS I KING OF SPAIN To all who see and understand this. Know ye: That the General Courts have approved and I hereby sanction the following law.

PREAMBLE I The Spanish economy is characterized by its dynamism, as demonstrated by the spectacular development of recent decades. During this time, its integration at the international level has increased, allowing it to benefit from greater growth opportunities.

In this process of development, economic and financial imbalances have accumulated. Spain advanced in 2012 towards correcting its vulnerabilities by applying an economic policy strategy that pursues the transition towards sustainable equilibrium and lays the foundations for growth that allows for job creation.

In this context, the structural reforms applied in Spain since the beginning of 2012 pursue three main objectives: First, to provide the Spanish economy with macroeconomic stability in terms of public deficit and inflation as well as external balance. Second, to achieve solid and solvent financial entities that allow credit to be channeled back into productive investment. Finally, to achieve a high degree of flexibility that allows adjusting relative prices and wages, thereby increasing the competitiveness of our economy.

From this set of actions, some of the fundamental obstacles to economic reactivation have been overcome. In any case, it is necessary to continue with the reformist effort to recover the path of economic growth and job creation.

Therefore, in order to develop the third area of the aforementioned economic policy strategy, in addition to maintaining and completing actions already initiated, a second generation of structural reforms necessary to grow and create jobs begins.

Within the Spanish business fabric, SMEs and self-employed workers stand out for their quantitative and qualitative importance. Studies show that precisely this type of company and entrepreneurs constitute one of the main engines for dynamizing the Spanish economy, given their capacity to generate employment and their potential for value creation.

However, in recent years, these economic agents have registered a decline in economic activity and have had to develop their activity in a labor, fiscal, regulatory, and financial environment that has diminished their capacity to adapt to changes. Furthermore, they have been facing a structural dependence on bank financing that may limit, in circumstances such as the current ones, their capacity for expansion. cve: BOE-A-2013-8187

OFFICIAL STATE GAZETTE No. 179 Saturday, July 27, 2013 Sec. I. Page 54985 The regulatory and institutional framework in which business activities take place is of essential importance to boost productivity gains and optimize resources.

Therefore, it is imperative that public administrations promote and facilitate business initiative, especially in the current economic conjuncture. It is necessary to establish an environment that promotes entrepreneurial culture, as well as the creation and development of business projects that generate employment and added value.

Support for entrepreneurial initiative, business development, and job creation is the common logic that underpins the set of measures collected in this law.

In this sense, this law adopts measures, with urgency, aimed at developing the Youth Entrepreneurship and Employment Strategy, fostering business financing through alternative markets, reducing delinquency in commercial operations, and, in general, fostering the competitiveness of the Spanish economy.

II Youth unemployment in Spain is a structural problem, which has been aggravated by the crisis, and which has serious consequences for the present and future situation of Spanish youth and limits the potential growth of the Spanish economy in the long term.

During the third quarter of 2012, Spain registered an unemployment rate of 54.1% for young people under 25 years old, compared to 23% in the EU-27, according to Eurostat data.

If we look at the breakdown of data from the Active Population Survey (EPA) for the fourth quarter of 2012, the unemployment rate stands at 74% in the population group composed of young people between 16 and 19 years old, at 51.7% among young people aged between 20 and 24 years, and at 34.4% among young people aged between 25 and 29 years.

In addition to circumstances derived from the current economic conjuncture, there is a set of structural weaknesses that directly influence youth unemployment figures and on which work is proposed, such as the high school dropout rate, which doubles the EU-27 values; the marked polarization of the labor market, where some young people leave their studies with little qualification and others, highly qualified, are underemployed; the relatively low weight of medium-level vocational training and the low employability of young people, especially regarding knowledge of foreign languages; high temporariness and unwanted part-time work; the difficulty of access to the labor market for groups at risk of social exclusion; and the need to improve the level of self-employment and business initiative among young people.

Title I develops the Youth Entrepreneurship and Employment Strategy 2013-2016, which falls under the objective of promoting measures aimed at reducing youth unemployment, either through employment in the private sector or through self-employment and entrepreneurship, and is the result of a process of dialogue and participation with social partners.

Furthermore, it responds to the recommendations made by the European Commission on youth employment and falls within the National Reform Plan launched by the Government. In this way, it is in line with the objectives of the European "Youth Guarantee" and develops a large part of the specific recommendations or lines of action proposed from the European Union.

Its objectives are to improve the employability of young people, increase the quality and stability of employment, promote equal opportunities in access to the labor market, and foster the entrepreneurial spirit. And the axes on which the Strategy is structured are: incentivizing hiring and business initiative among young people, adapting the education and training they receive to the reality of the labor market, and reducing the early school dropout rate. cve: BOE-A-2013-8187

OFFICIAL STATE GAZETTE No. 179 Saturday, July 27, 2013 Sec. I. Page 54986 To make this possible, the Strategy contains a series of measures aimed at favoring the labor insertion of young people, either in the private sector or through entrepreneurship, which are classified according to their impact and temporal development.

The Strategy aims to serve as a channel of participation for all public and private institutions, companies, and all types of organizations that wish to collaborate in achieving its objectives.

For this purpose, it has been articulated as an open instrument, to which all those who wish to contribute with their own initiatives to face the challenge of youth employment in any of its forms, entrepreneurship and self-employment, may join, and it will have a seal or distinctive that can be used in recognition of their contribution.

This set of measures has been designed after a process of dialogue and participation with social partners. Likewise, consultations have been carried out with the main entities and associations of self-employment and the social economy, among others.

In this law, a first set of measures is developed that is expected to have a positive impact in reducing the youth unemployment rate and improving the quality and stability of employment.

In Chapter I of Title I, measures are adopted to encourage entrepreneurship and self-employment among young people under 30 years old, among which stand out the implementation of a reduced initial quota, the compatibility of unemployment benefits with the start of self-employment activity, or the expansion of the possibilities for applying the capitalization of unemployment benefits.

Complementarily, in Chapter II, a more favorable fiscal framework is established for the self-employed person who starts an entrepreneurial activity with the aim of incentivizing the creation of companies and reducing the tax burden during the first years of exercising an activity.

Thus, in the field of the Corporate Tax, a tax rate of 15 percent is established for the first 300,000 euros of the taxable base, and 20 percent for the excess over that amount, applicable in the first tax period in which the taxable base of the entities is positive and in the following tax period.

In consonance with the above, in the Personal Income Tax, with the aim of encouraging the start of entrepreneurial activity, a new reduction of 20 percent is established on the net income from economic activities obtained by taxpayers who have started the exercise of an economic activity, applicable in the first tax period in which the net income is positive and in the following tax period.

Also, in the field of the Personal Income Tax, the limit currently applicable to the exemption of unemployment benefits in the single payment modality is abolished.

Chapter III contains measures aimed at incentivizing the incorporation of young people into social economy companies, as well as incentives for hiring young people in a situation of unemployment. Among these, the incentives aimed at part-time hiring with training linkage, the indefinite hiring of a young person by micro-enterprises and self-employed entrepreneurs, and hiring in practice stand out.

Furthermore, the hiring by self-employed young people of long-term unemployed people over 45 years old and the hiring of young people to acquire their first professional experience are stimulated.

Chapter IV incorporates measures related to the improvement of labor intermediation, the effectiveness of which makes it necessary to eliminate any obstacle that hinders the rapid coverage of available job positions, allowing any person to have knowledge of job offers. Therefore, it is foreseen that public employment services will register all job offers and demands in the database of the Information System of Public Employment Services regulated in Law 56/2003, of December 16, on Employment, thus guaranteeing the dissemination of this information to all citizens, companies, and public administrations, as a guarantee of transparency and market unity. cve: BOE-A-2013-8187

OFFICIAL STATE GAZETTE No. 179 Saturday, July 27, 2013 Sec. I. Page 54987 In the same line of improving labor intermediation, this law includes a modification of the consolidated text of the Public Sector Contracts Law, approved by Royal Legislative Decree 3/2011, of November 14, which will allow the State Public Employment Service and the competent contracting bodies of the Autonomous Communities, and of the organisms and entities dependent on them and integrated into the National Employment System, to conclude joint framework agreements in order to set the conditions to which the service contracts deemed appropriate to facilitate labor intermediation by public employment services must adhere.

III Various measures to promote business financing are articulated in Title II, which require their adoption urgently given the current economic conjuncture.

A modification is made to the Regulation on the Regulation and Supervision of Private Insurance to include the possibility that insurance entities may invest in securities admitted to trading on the Alternative Stock Market, and that such investments be considered suitable for covering technical provisions.

In the same line, the Regulation on pension and fund plans is modified to include the possibility that pension funds may invest in securities admitted to trading on the Alternative Stock Market, as well as in venture capital entities, establishing a specific maximum limit of 3% of the fund's assets for investment in each entity.

Finally, to facilitate access to non-bank financing for Spanish companies, it is necessary to lift the limitation imposed in Article 405 of the Capital Companies Law, by which the total amount of issuances by companies cannot exceed the paid-up share capital plus reserves. The modification lifts this limitation for investment in multilateral trading systems (in line with what already occurs with regulated markets). This flexibility will only apply in those cases where the issuances are directed to institutional investors, to ensure adequate protection of retail investors. In this way, it contributes substantially to the development of alternative markets, articulated as multilateral trading systems, and, in line with ongoing projects to improve the financing of Spanish SMEs, it facilitates the emergence of markets specialized in the trading of corporate debt.

IV In order to alleviate the difficult economic situation faced by some local entities and some autonomous communities, the Government approved last year Royal Decree-Law 4/2012, of February 24, which determines information obligations and procedures necessary to establish a financing mechanism for payment to suppliers of local entities, which was subsequently extended to autonomous communities through an Agreement of the Fiscal and Financial Policy Council of March 6, 2012. Likewise, a Fund for the Financing of Payments to Suppliers was created, through Royal Decree-Law 7/2012, of March 9.

The aforementioned legislation established an extraordinary financing mechanism for the payment and cancellation of debts contracted with suppliers of local entities and autonomous communities, which allowed the payment of debts they had with contractors, while at the same time facilitating indebted public administrations the formalization of long-term loans, albeit with the requirement of fiscal and financial conditionality which was specified, among other elements, in the requirement to have adjustment plans.

Through the provisions contained in Chapter I of Title III of this law, a new phase of the aforementioned mechanism is established, while its subjective and objective scope of application is expanded and some procedural specialties necessary for this new phase are established.

Thus, municipal consortia and local entities in the Basque Country and Navarre are included.

Regarding the objective scope of application, pending payment obligations derived from: agreements, administrative concessions, management assignments where the assigned entity has the status of own means and technical service of the Administration, contracts for the lease of real estate, contracts provided for in Law 31/2007, of October 30, on contracting procedures in the sectors of water, energy, transport, and postal services, public works concession contracts, public-private collaboration contracts, and public service management contracts, in the concession modality, in which a subsidy from local entities or autonomous communities had been agreed, are included, among others.

On the other hand, in this expansion, only pending payment obligations to contractors that have been accounted for and applied to the budgets may be included.

Section 1 of general provisions regulates the object of the first chapter, which is specified in the expansion of the subjective and objective scopes of the financing mechanism for payment to suppliers, as well as the establishment of the necessary specialties.

Section 2 on provisions applicable to local entities regulates the subjective and objective scope of application, according to the aforementioned criteria, and establishes the specialties relative to the information supply procedure, with special attention to municipal consortia and adjustment plans.

Section 3 on provisions applicable to autonomous communities establishes the subjective and objective scope of application, the procedural specialties relative to information supply and invoice payment, the necessary review of adjustment plans in accordance with new credit operations contracted, as well as the manner of cancellation of pending payment obligations that have affected financing.

On the other hand, delinquency in the payment of contractual debts between companies, as well as between them and public administrations, and payment terms have been the subject of special attention both in the European Union and in our country. The reason for this concern stems from the negative effects that both this delinquency and excessively long payment terms have on employment, competitiveness, and the very survival of companies.

As a result of the above, Directive 2000/35/EC of the European Parliament and of the Council of June 29, 2000, establishing measures to combat late payment in commercial transactions, was approved, which Spain transposed into our legal order through Law 3/2004, of December 29.

At the same time that the European Union began the revision of Directive 2000/35/EC, Spain also addressed the modification of our law, which was embodied in Law 15/2010, of July 5, modifying Law 3/2004, of December 29, establishing measures to combat late payment in commercial transactions.

In this way, various measures were anticipated that were subsequently included in Directive 2011/7/EU of the European Parliament and of the Council of February 16, 2011, establishing measures to combat late payment in commercial transactions, which came to replace the previous 2000 Directive. This has happened with payment terms, including those of the public sector.

Although Spanish law, after the indicated modification, generally complies with the new requirements of the European Union, there are certain aspects in which there is some divergence that makes the reform of Law 3/2004, of December 29, unavoidable, which is undertaken in Chapter II of Title III of this law.

Among the modifications now made, first of all, is the determination of payment terms, which is subject to simplification. Both payment terms and their calculation are specified, with the novelty of the provision of an acceptance or verification procedure, which must be regulated to prevent their use for the purpose of delaying payment.

The provision regarding payment schedules and how interest will be calculated in case any of the payments are not made on the agreed date is incorporated.

The legal interest rate for delay that the debtor will be obliged to pay is also reformed, increasing from seven to eight percentage points to be added to the interest rate applied by the European Central Bank at its most recent main refinancing operation.

In the compensation for collection costs, it is foreseen that in all cases a fixed amount of 40 euros must be paid to the creditor, without the need for prior request, which will be added to that resulting from the claim that corresponds to him for the expenses incurred to obtain the collection of the amount owed. Furthermore, the previous limit of this compensation, which could not exceed 15 percent of the principal debt, disappears. In this compensation, expenses that the delay has entailed for the creditor by hiring a lawyer or a collection agency, among others, may be included.

Another novelty consists precisely in the inclusion among abusive clauses, and therefore null, as regulated by Law 7/1998, of April 13, on General Conditions of Contracting, those that exclude compensation for collection costs, which will be contrary to the law, unless the debtor demonstrated that such exclusion is not abusive. And along with those clauses, the provision that the infringement of this law occurs through commercial practices, which are also classified as abusive and will have the same regime for challenge.

V The current economic situation poses the need to intensify measures for the rationalization of the railway sector to achieve maximum efficiency in service management and promote the liberalization processes already initiated.

With the aim of achieving the aforementioned ends, as well as unifying the management of state railway infrastructures, it is considered necessary to transfer to the public business entity Administrador de Infraestructuras Ferroviarias (ADIF) the railway network owned by the State. In this way, the railway infrastructures and stations that constitute the network owned by the State, whose administration ADIF has been entrusted, will become owned by it, thus unifying ownership with the functions of network administration for the benefit of efficiency.

On the other hand, Royal Decree-Law 22/2012, of July 20, adopting measures in the matter of railway infrastructures and services, provides for the restructuring of RENFE-Operadora into four commercial companies that will assume the different functions entrusted to them, including passenger and freight transport. For these to operate, in accordance with the Railway Sector Law, at the moment they are effectively constituted, it is necessary that they have the corresponding company license cve: BOE-A-2013-8187