A startup with its registered tax address in the Basque Country is taxed under the foral regime, which offers a reduced Corporate Income Tax rate for newly created companies and stronger R&D&I deductions than the common regime.

Combined with the Basque support ecosystem (SPRI, BIC, Seed Capital, Beaz), these advantages make the Basque Country one of the most competitive locations for launching innovative projects.

How a foral startup is taxed

Newly created companies in the Basque Country can apply a reduced foral Corporate Income Tax rate during their first financial years (as against the general rate of 24% and the 20% for SMEs), provided they meet the requirements of real activity.

The key is to set the registered tax address where there is effective activity in the territory, not merely a nominal presence.

R&D&I deductions: the great foral advantage

Basque foral legislation is especially generous with R&D&I: it allows a high percentage of research and development costs and investments to be deducted, with mechanisms that in certain cases make it possible to monetise the deduction even without sufficient tax liability. For a startup with a strong technological component, this deduction can be decisive.

  • Deduction for R&D&I costs, with percentages higher than the common regime.
  • Deduction for job creation and for investment in assets.
  • Incentives for investors taking stakes in newly or recently created companies.

The Basque support ecosystem

Beyond taxation, the Basque Country has a dense ecosystem of support for startups:

  • SPRI, the Basque Government agency.
  • The business and innovation centres (BIC).
  • Equity instruments such as Seed Capital.
  • The foral development agencies, such as Beaz in Bizkaia.

Foral taxation and this support combine, and it is worth planning them together.

The state Startups Act and the foral regime

The state Startups Act and the foral regime coexist: a Basque company can benefit from the foral R&D&I and corporate tax incentives and, depending on the case, fit within certain state measures.

Analysing which framework is more favourable for each startup avoids leaving advantages on the table.

We advise your startup from Bilbao

At Grupo Asegi we help startups in the Basque Country to structure themselves from the outset: legal form, registered tax address, application of foral R&D&I deductions and fit with the ecosystem’s support schemes.

With tax, accounting, legal and audit advice within a single group, your project grows with its taxation optimised and no nasty surprises.

Frequently asked questions

What tax advantage is there in setting up a startup in the Basque Country?
A reduced foral Corporate Income Tax rate for new companies and stronger R&D&I deductions than in the common regime.
Are foral R&D&I deductions better than the state ones?
In general yes: the percentages are higher and the monetisation mechanisms are more flexible. It is worth confirming the amounts currently in force.
Can I combine the state Startups Act with the foral regime?
They coexist. Each case has to be analysed to see which framework is more favourable.
Do I need real activity in the Basque Country to apply the foral regime?
Yes. The registered tax address must correspond to effective activity in the territory.

General information only; it does not replace professional advice. Foral legislation changes frequently — check the date it was last updated.