By Elizabeth Anderson
According to Sage’s recent report Unlocking Growth: Frictionless Trade for SMEs, more than half of Spain’s SMEs are looking for real-time or automated solutions to simplify compliance.
The region is moving towards new regulations designed to make businesses more efficient, including the implementation of e-invoicing for all companies and self-employed workers.
Around 60% of Spanish SMEs support mandatory B2B e-invoicing – one of the highest levels of support in Europe, Sage’s report found, based on feedback from 11,000 international SMEs and accountants.
With late payments having the potential to cause serious cash flow problems, e-invoicing offers the benefits of faster processing, and reduced delays, errors and cost. Economic modelling has demonstrated that the widespread adoption of e-invoicing among SMEs could boost EU labour productivity by up to 2.6% per year and reduce late payments by 20%, accelerating average invoice settlement times by four days.
Darin Patterson, VP of Market Strategy at automation development platform Make, adds that AI and automation tools - especially those with a low barrier to use and deployment - are having a transformative impact on Spanish industries, even in unlikely areas.
“Take agriculture, for example. Farmers in rural Spain have benefitted from AI powered automation to complete invoicing tasks after Spanish authorities recently demanded that they be done electronically,” he explains. “Make’s AI Agents turn farmers’ WhatsApp and Telegram voice notes into invoices in seconds, not only helping older farmers unfamiliar with technology with the switch, but delivering estimated savings of thousands of euros each month.”
The Spanish government is actively working to secure Spain’s reputation as an entrepreneurial nation focused on innovation by 2030. Digital innovation is its core focus, thanks to a recurring message from SMEs that ease of doing business is a key factor for growth.
The aim of Spain's “España Emprendedora” (Entrepreneurial Nation) Strategy is to attract, retain and develop talent, accelerate digital transformation, attract more investment and foster a strong entrepreneurial culture and ecosystem. Supporting this is The Startup Law, which came into effect on 1 January 2023, lowering corporation tax for businesses and making it easier for them to hire international talent through a Digital Nomad Visa.
Spain has also become the first European country to introduce an AI supervisory agency. The Spanish Agency for the Supervision of Artificial Intelligence (AESIA), launched in August 2023, oversees responsible AI use and should give SMEs greater confidence to adopt new technologies.
According to Elena Palomo, Territory Director for Spain at wireless telecommunications provider Shared Access, this wider policy support is fuelling momentum in tech hubs such as Madrid, Barcelona and Valencia.
“By setting up communities within these cities, a cultural environment is created that helps to prioritise and create a self fulfilling impact to generate growth and grow relationships. This being backed by regulation is key. A robust digital infrastructure needs to remain a key priority to allow AI, automation and cloud services to deliver their full value,” she adds.
The impact of Spain’s pro-business and digital growth strategy is already showing. Overall, Spain’s economy is growing, and it’s now home to more than 3,000 startups. The combined value of Spanish startups hit €105 billion in 2024, up 5% from 2023, according to Dealroom’s Spanish Tech ecosystem report.
Investment activity is also proving strong. Spain ranks sixth in Europe for VC investment, with Spanish firms raising €3.9 billion in VC funding in 2024/25, adds Dealroom, with momentum remaining strong this year.
Recent funding rounds include:
Despite strong momentum, challenges remain if Spain wants to secure its status as a leading European tech powerhouse. Red tape and bureaucracy remain burdens for many businesses in Spain, and are often cited as one of key barriers to growth for SMEs.
If Spain wants to fully capitalise on the growth of Spanish scaleups and reach its potential as a European scale-up hub, it needs to address structural barriers around payments, talent access and capital flows.
It’s not just regulation in Spain holding SMEs back – they are also battling regulatory fragmentation, and a lack of harmonisation in compliance rules across the wider European market.
And while funding is increasing In Spain, 71% of SMEs still cite equity funding access as a major barrier to growth, 4 points higher than the EU average of 67%, Sage’s Scaling for Growth report found, which polled more than 7,500 senior leaders across Europe.
Albert Sampietro, VP of Engineering at Sage’s Barcelona hub, says starting a business in Spain isn’t always easy, as there are more legal steps involved. However, he doesn’t think this is a deal breaker and remains optimistic that Spain is still a great place to start and grow a business.
“It could be easier but it’s not putting people off. Barcelona is full of startups today because there is lots of talent in the market, they are attracted by the lifestyle and the supportive startup environment. A lot of international companies are also relocating to cities such as Barcelona, which continues to expand the talent pool,” he adds.
The Spanish government's Digital Spain 2026 Agenda aims to accelerate the country's digital and sustainable transformation. A key part of this is supporting wider use of new technology such as AI, automation and 5G, and bolstering cybersecurity.
Spanish SMEs are already demonstrating how AI can simplify and improve tasks such as financial reporting, invoicing and customer service, and their agile approach is influencing how larger companies use technology.
Sampietro says Spain’s strong entrepreneurial energy and increasing investment into the country’s tech firms means it has the potential to lead the way in digital innovation.
“We have a lot of high-tech companies here creating a very rich ecosystem and proving the potential of AI,” he explains, adding that he is excited to see the continued growth of Spain in the coming years.
