The GEN Atlas Country Deep Dive is a monthly exploration of the startup support policy landscape in selected countries, drawing upon entries from the GEN Atlas compendium of entrepreneurship policies. We offer a holistic overview of what each country is providing, identifying success stories, gaps in provision and always looking for insight that can be shared across borders around the world. Our analysis of each nation’s startup support is built around eight overarching themes:
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Finance: New types of capital for startups and scaleups at the right time
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Education + Skills: Embedding enterprise and entrepreneurship into education and providing (both existing and potential) entrepreneurs with mentoring, training and support
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Market Access: Expanding access to markets for startups domestically and abroad
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Inclusivity + Culture: Ensuring that entrepreneurship is a culturally attractive vocation for all sections of society and in particular that people from disadvantaged groups have an equal opportunity to launch and grow a business
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Regulation: Removing regulatory barriers to innovation and startup success
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Ecosystem + Economic Development: Developing and managing local ecosystems to better support entrepreneurs, startups and scale-ups
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Science, Technology and Innovation: Utilizing the latest advancements in science and technology to improve productivity, boost economic growth and solve societal problems through innovation
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Policy Making: Maintaining a data-driven, effective and coherent policy making process that supports entrepreneurs and ensures public awareness of available programs
The Spanish startup ecosystem has been experiencing a period of rapid growth, having increased 3.6 times in value since 2018 to a combined value of €93 billion in 2023. Spain may have been late to the entrepreneurial party but their burgeoning ecosystem is littered with success stories such as homegrown unicorns: Glovo, Wallbox and Letgo. According to Startup Blink, Spain’s startup ecosystem ranks 8th in Western Europe and 15th in the world. Likewise, Barcelona and Madrid both feature on the GSER list of emerging ecosystems, at 4th and 13th respectively.
Despite these positive developments, the ecosystem still faces challenges such as a lack of access to capital and talent. That is why the Spanish government has been highly active in this space, working diligently to foster a supportive and regulatory environment for startups. At the core of this agenda is the Spain Entrepreneurial Nation Strategy, which aims to transform Spain into world leaders in entrepreneurship by 2030.
Finance
Securing access to funding for the right startups at the right time in the early stages of development is often seen as the pivotal issue facing any ecosystem. This is no different in Spain where the reality has been that startups have less access to investment than their counterparts in Paris and London. That is why the Spanish government placed accelerating investment as the first of its four goals in the Entrepreneurial Nation Strategy.
At the core of Spain’s offer of capital for startups is ENISA. The ENISA participative loan scheme is a financing program designed to support startups and small and medium-sized enterprises (SMEs). Unlike a traditional bank loan, this loan is not convertible into equity and provide a budget of roughly €100 million annually. Loans of up to €75,000 have been provided to thousands of Spanish SMEs with academic studies demonstrating the positive impact the program has had on employment and sales.
Other options available to Spanish startups include the NEOTEC initiative which provides non-refundable subsidies to tech-based startups that cover up to 70% of the project budget. In addition to this the Entrepreneurial Nation Strategy includes 14 proposals to promote investment including a new scheme to secure Private Seed-Stage Investment, incentivizing pension funds to invest in startups, boosting alternative markets and promoting investment in venture debt.
Education + Skills
Since 2006, when the Act on Education introduced entrepreneurship to the legal educational framework, there has been a drive to vastly improve the range of support available to Spanish schools that embed entrepreneurial skills and behavior in their curriculum. One such program is ‘Be an Entrepreneur’ which was launched in 2007 that uses real entrepreneurs to provide practical classes that are tailored to the educational needs of each class of children. This program is notable also for the fact it is taught in English and draws so heavily on the real-life skills and experience of entrepreneurs. While this program is focus in Catalonia, similar programs exist in each of Spain’s 17 autonomous regions.
Similarly, there are a variety of programs available to develop the skills of entrepreneurs such as the ‘Barcelona Mentoring Program’ or ‘Andalucia Emprende’ which both provide training and mentoring in their respective localities. The Entrepreneurial Nation Strategy also includes 8 measures to increase talent and skills including measures that promote vocational training and lifelong learning.
Market Access
One of the unique advantages that Spain possesses is that – through historic and linguistic ties – it can act as a corridor between LATAM and the rest of Europe. This provides both opportunities for Spanish companies to scale by accessing markets in a different continent and for drawing the best startups in LATAM to set up operations in Spain. The España-LATAM scale-up program exists to harness this potential by handpicking Latin American startups with significant potential and supporting them through an immersive 5-day program as well as offering technical advice for legal and fiscal aspects, visas, and fostering collaboration with Spanish companies. In addition to this, Spain has also introduced an Entrepreneur Visa making it easier for high talent individuals to relocate their business to Spain.
Inclusivity
The Spanish government has placed inclusivity right in the foundations of its Entrepreneurial Nation Strategy with the goal of closing the following gaps: gender; socioeconomic; territorial and generational. In particular, the strategy includes several measures to promote women entrepreneurs through increased investment, gender equality criterions in public hiring, gender parity at events, sponsorship and mentoring for women and promoting women in STEAM careers.
There are already several programs in place in Spain to support women entrepreneurs such as “The Break Fellowship” which provides a 28-day retreat in Spain with a €7,000 stipend for women entrepreneurs based outside of Spain. The program includes hours of dedicated mentoring, training on critical areas of business development and support in delivering projects that benefit local communities in Spain. Other programs to support women entrepreneurs also exist such as the Jump Startup Women Accelerator.
It is worth noting, however, that ethnicity does not currently feature in the Spanish Entrepreneurship agenda and there remains a lack of support for entrepreneurs from underrepresented ethnic groups.
Regulation
The New Startup Law in Spain includes several favorable regulations to promote the creation and development of new technology-based and innovative companies. For example, notary and registry fees will be eliminated for companies that incorporate electronically. In addition to this, companies will be able to register in the Mercantille Registry in just 6 hours using standard statutes, or 5 working days otherwise.
There are also increased exemptions for shares, interests or stock options awarded to startup employees. For these instruments the threshold for taxation has been increased from €12,000 to €50,000 a year. Intriguingly, prior to the New Startup Law, the most popular form of shares issued in Spain are known as ‘Phantom Shares’ and exist in the absence of government regulation. Phantom shares work as a form of incentive for employees without modifying the company's capital structure or ownership. They are used particularly by start-ups that may lack financial resources to attract and retain key employees and professionals. Unlike traditional shares – which have historically faced very high levels of taxation in Spain – phantom shares are taxed and regulated as if they are bonuses paid on top of the employee’s wage.
Ecosystem + Economic Development
Spain is blessed with several thriving startup ecosystems including those in Barcelona, Madrid, Valencia and Malaga. Extensive analysis of this has been conducted by Endeavour Insights through their project of mapping of Spain’s tech sector. In addition to this, organization’s such as the Spanish Startups Association exist to support the ecosystem and the large network of Incubators and Accelerators that provide support to early-stage startups.
Specific programs that exist to develop the ecosystems include Barcelona Activa which is a city-driven economic development agency that offers support and resources to entrepreneurs, startups, and established businesses. It is the executive tool of the Economic Development policies of Barcelona and works to foster a thriving entrepreneurial ecosystem.
Science, Technology and Innovation
Innovation features heavily in the Entrepreneurial Nation Strategy with policies on Knowledge Transfer Offices, technology centers, innovative urban development, open public data, and R&D. One of the most significant existing programs in this area is the Torres Quevedo Program which provides grants with refundable advances to beneficiaries that foster innovation through R&D activities. The program also promotes collaboration between academia and industry by funding the employment of researchers with a doctorate degree for their R&D projects.
Policymaking
Good policymaking is the bedrock of successful entrepreneurship policy and Spain’s Entrepreneurial Nation Strategy is an excellent example of a comprehensive plan with clear objectives and measures to achieve them. This has been backed up in law with the New Startup Law which contains a range of measures designed to enshrine aspects of the agenda in law and ensure its effective implementation.
In addition to this it’s also worth noting the creation of EsTech which is a lobby group launched by a select group of high-growth startups in Spain with the aim of advocating for the economic benefits of high-tech businesses. The group, which includes companies such as Cabify, Glovo, and Wallbox, seeks to collaborating with high-growth startups in Spain and advocating for their interests on multiple fronts. They work towards developing talent within Spain by fostering education and training opportunities, while also attracting international talent. They influence regulation by lobbying for startup-friendly policies and legislation, taking proactive measures to address potential issues like the new startup law.
Overall, the startup support landscape in Spain is incredibly favorable at this moment in time. Where gaps have historically existed – such as suitable visa schemes, stock schemes and regulatory sandboxes – the measures outlined in the Entrepreneurial Nation Strategy have either filled them already or outline plans to do so.