MADRID, Dec 10 (Reuters) - Spain"s cabinet approved a suite of tax breaks for entrepreneurs and investors and simplified the process of setting up a new business on Friday as part of a new bill to make the country more attractive to startups. Known as the "startup law", the legislation forms part of a package of reforms that Madrid agreed with the European Commission in exchange for the release of pandemic recovery funds. "Startups are the foundation of the new digital economy, they generate highly skilled jobs and have high growth potential," Economy Minister Nadia Calvino said after a weekly cabinet meeting. Registration fees will be eliminated and the requirements for creating new company will be streamlined, Calvino said. Spain currently ranks 97th on the World Bank"s ranking for ease of starting a business, among the lowest scores in Europe. Under the new law, employees can receive up to 50,000 euros ($56,385) a year in stock options - a common form of remuneration in startups - without paying tax, compared with a previous 12,000 euro limit. The amount and rate for investors to claim back deductions on investments in startups will also increase. In an effort to attract and retain talent, Spain will offer startup employees, investors and so-called digital nomads a favourable tax regime under a special five-year visa, Calvino said. The bill will now be sent to parliament. ($1 = 0.8868 euros)