OECD Report on the Start-Ups Act

The recent study Entrepreneurial Ecosystem Diagnostics of Spain published by the OECD places Spain among Europe’s most dynamic countries in startup creation, innovation, and the development of new business initiatives, highlighting the positive impact of recent reforms and the role of key institutions in supporting entrepreneurship. The diagnostic offers a view of the progress achieved while also pointing to remaining challenges to strengthen sustainable growth and the international competitiveness of the business fabric.

Small and medium-sized enterprises (SMEs) and startups are a fundamental engine of the Spanish and European economy, but they face structural, regulatory, and financing challenges that limit their growth and innovation. In today’s European context, there is broad consensus about Europe’s continued loss of relevance in the global technology landscape. Recent reports (Draghi, Letta, 2024) underline that the European Union has fallen behind in science, technology, and innovation compared with powers such as the United States and China. Structural factors (insufficient economies of scale, market fragmentation) and geopolitical dynamics have contributed to this situation.

A long-standing obstacle has been the reliance on bank financing and the limited integration of European capital markets. The Capital Markets Union (CMU) initiative launched in 2015 acknowledged this gap, aiming to develop deeper, less fragmented financial markets so that companies—especially SMEs—can access funding sources other than bank loans. Given the scale of the European Union’s investment needs and the realization that European savings remain largely in bank deposits, the European Commission reframed this agenda and launched the Savings and Investment Union (SIU) in 2025. SIU maintains the objective of financial integration while broadening the focus to the central role of citizens’ savings, seeking to connect retail savings more effectively with the productive investment required for the green and digital transitions and for strengthening Europe’s competitiveness.

Spain has made notable progress in recent decades in building a strong entrepreneurial ecosystem, thanks to policy reforms, the creation of innovation hubs, and increased public and private support. The approval of the Startups Law in 2022 marked a key milestone to boost startups and scaleups and to better coordinate public and private stakeholders, in line with European strategies. Spain thus ranks among the OECD and EU’s leading countries in this area, with a comprehensive entrepreneurial policy approach, although challenges and areas for improvement remain to further strengthen the ecosystem.

In its diagnostic of Spain’s entrepreneurial ecosystem (2026), the OECD analyzes the BME Growth market and proposes measures to strengthen it. In particular, it recommends extending the tax incentives under the Startups Law to companies listed on this growth market, so they can continue to benefit from tax support after going public. Currently, if a startup lists on the stock market (even on growth markets such as BME Growth or BME Scaleup), ENISA (the National Innovation Company) does not recognize it as an “emerging company,” which prevents it from accessing Startups Law benefits. The OECD therefore suggests reversing this exclusion so as not to penalize startups that turn to BME Growth or BME Scaleup.

The report highlights that, in particular, several listed companies on growth markets have been able to carry out repeated capital increases after going public, which is helping to normalize the use of equity markets as a staged financing route. In fact, since 2009, nearly 200 companies have raised capital in the BME Growth and Scaleup segments for a total amount of €8.4 billion. These successive share issuances, albeit in a still-small environment, have shown that gradually increasing share capital is feasible without investors necessarily perceiving it as harmful dilution of their holdings. This signal contributes to a more open mindset toward staged growth via a growth market. Even so, limited liquidity and market capitalization remain central challenges. From a cultural standpoint, many startup founders are reluctant to list because they fear “opening up” their capital too much and meeting complex requirements, which could discourage more companies from joining the market. The OECD believes that this market immaturity, far from being a reason to dismiss it, represents an opportunity: with the right policies, a positive dynamic could be accelerated to attract more startups to BME Growth and Scaleup, thereby increasing liquidity and market size to the benefit of the entrepreneurial ecosystem.

To improve how BME Growth operates and to support emerging companies beyond their initial stage, the OECD suggests a set of targeted policy reforms focused on tax incentives and regulation. The following recommendations stand out in this area:

Extend the Startups Law tax incentives to companies listed on alternative markets:
Currently, tax benefits (for example, deductions for investors) apply only to startups that are not listed on any market, whether the main market or a growth market (multilateral trading facility). The OECD proposes allowing startups on growth markets, such as BME Growth and BME Scaleup, to remain eligible for tax incentives, removing the regulatory barrier that currently excludes them solely because they are listed. This would require amending tax legislation (Personal Income Tax Law) so that companies listed on growth markets that qualify as an “emerging company” can keep advantages such as deductions for business angels or other tax support beyond their market listing. The aim is not to penalize growth via BME Growth or Scaleup, but rather to reward it, encouraging more startups to use this financing route. BME proposes reviewing Law 28/2022 in its Third Final Provision, which amends the Personal Income Tax Law. Specifically, Article 68.1, in its Fourth section, point 2(a), to allow investors in emerging companies that are listed—especially on multilateral systems such as BME Growth/Scaleup—to benefit from a favorable tax regime, which they have enjoyed for investments in unlisted emerging companies. This regulatory adaptation would strengthen coherence between policies to promote innovative entrepreneurship and the strategic objective of strengthening Spain’s capital markets, removing unnecessary frictions and supporting the natural transition of startups toward scalable, transparent models that are fully integrated into official financing channels.

Ease free-float and shareholder base requirements to list on BME Growth:
In this regard, BME has already taken steps to overcome the free-float hurdle without compromising market integrity, through the creation of BME Scaleup in 2023. This segment offers a listing route without requiring an initial free float or guaranteed liquidity, aimed at growing companies that have moved beyond the initial startup stage, have a certain level of operational and business-model maturity, and are seeking financing to make the next leap in their development, but do not yet have the size or structure for BME Growth or the main market. BME Growth, as a market for expanding companies, maintains certain investor-protection and distribution requirements to ensure a minimum level of trading activity. BME’s strategy has been to differentiate the segments: those who cannot (or do not want to) meet a broad free float have BME Scaleup as a prior step, while BME Growth is reserved for somewhat more mature companies that ideally already have a degree of float and a track record of reporting.

Strengthen the growth-market pipeline:
Beyond one-off incentives, it is essential to keep refining how BME Growth and Scaleup operate through regulatory and promotional measures that expand the flow of companies that are candidates to list. In this regard, BME already runs periodic sessions with business associations to publicize the advantages of growth markets and foster financial literacy among SMEs and scale-ups. Likewise, the Entorno Pre Mercado program serves as a strategic tool to prepare companies for the IPO process, easing their transition to public financing. These initiatives, together with streamlined procedures and technical support, help generate a steady flow of high-quality startups and SMEs interested in listing, energizing the market and feeding a pipeline of projects that can eventually move to the main market. In short, the goal is to consolidate the alternative stock-market route as an integral part of the corporate financing cycle.

The OECD report underscores that strengthening growth markets through incentives and regulatory adjustments can boost Spain’s entrepreneurial ecosystem by providing startups with a viable path to public financing without losing support. The recommended tax and regulatory reforms, coupled with an effort to shift financial culture, aim to ensure that more emerging companies make the leap to growth markets, facilitating their evolution toward the main segment while complementing traditional sources of innovation financing. All these measures are designed to ensure that public support for startups does not end at the early stage, but also accompanies them during their stock-market growth phase, thereby maximizing the chances of success for innovative companies in Spain.