Banking Law and Venture Capital in Aviation Technology — Spain

1. Introduction

Venture capital (VC) in aviation technology in Spain sits at the intersection of several legal regimes rather than being governed by one specific “aviation venture-capital law.”

A Spanish aviation-technology startup—for example, one developing eVTOL aircraft, drones, autonomous-flight systems, avionics, satellite/air-traffic technology, electric propulsion, aircraft software or aviation AI—may receive financing through:

• venture-capital funds;
• bank loans;
• venture debt;
• convertible instruments;
• public-private investment funds;
• crowdfunding;
• EU funding;
• guarantees;
• strategic-investment schemes; and
• corporate/industrial investors.

The legal framework therefore combines Spanish banking law, Spanish venture-capital law, startup law, EU financial regulation, State-aid law and aviation-safety regulation.

Spain's Law 22/2014 on Venture Capital and Closed-Ended Collective Investment Entities is the central Spanish VC statute. Importantly, amendments made by Law 18/2022 expressly broadened the permissible investment object of venture capital to include financial entities whose activity is based principally on technology applied to new business models, applications, processes or products.

2. What Is Aviation-Technology Venture Capital?

Aviation technology is a particularly suitable VC sector because projects often require:

• large R&D expenditure;
• long development periods;
• expensive prototypes;
• certification;
• specialised engineering;
• testing;
• regulatory approvals;
• intellectual-property protection; and
• substantial capital before commercial revenue begins.

Examples include:

The legal challenge is that VC investors tolerate high commercial risk, whereas banks are subject to prudential rules requiring careful management of credit risk.

3. Main Spanish Legal Framework

The principal legislation can be divided into five layers.

A. Venture capital

Law 22/2014

Regulates:

• venture-capital entities;
• private-equity structures;
• closed-ended investment entities;
• management companies;
• investor protection;
• investment diversification.

The statute remains the principal Spanish legal framework for venture capital.

B. Startup ecosystem

Law 28/2022 — Startup Law

It introduced measures designed to attract investment and improve financing conditions for innovative emerging companies. Among other measures, qualifying startups receive a reduced 15% corporate-tax rate during the specified initial profitable periods, and the law increased incentives for investment in newly created companies.

C. Banking

Law 10/2014 on the Organisation, Supervision and Solvency of Credit Institutions, together with EU prudential rules and Royal Decree 84/2015, provides the core framework for Spanish credit institutions.

D. Capital markets

The CNMV is important where the financing involves:

• investment funds;
• venture-capital managers;
• investment services;
• crowdfunding;
• securities.

E. Aviation

Aviation technology must separately satisfy EU/Spanish aviation-safety requirements.

For example, EASA's current framework specifically addresses innovative air mobility, VTOL aircraft and certified unmanned aircraft.

4. Venture Capital Under Law 22/2014

The most important feature for aviation technology is that Spanish venture capital is designed to finance companies with substantial growth and innovation potential.

Law 22/2014 regulates the entities through which professional VC capital is pooled and invested.

A typical structure is:

Investors

↓

Venture Capital Fund

↓

VC Management Company

↓

Spanish aviation-tech startup

↓

R&D / prototype / certification / commercialisation

This structure separates the investors' capital from the operating company and allows professional investment management.

5. Why Aviation Technology Fits Venture Capital

Aviation technology frequently has characteristics that make conventional bank financing difficult.

For example:

eVTOL startup

Year 1–2:

• engineering;
• prototype;
• software;
• testing.

Revenue: very low

Risk: very high

Year 3–5:

• certification;
• production;
• infrastructure;
• commercial launch.

Capital requirements: very high

Therefore, equity capital is often more appropriate during the early development stage.

A bank normally asks:

“How will the loan be repaid?”

A VC investor asks:

“Could this technology become a highly valuable company?”

That difference explains why VC is particularly important in aviation technology.

6. 2022 Reform and Technology-Based Investment

Law 18/2022 significantly modernised Spanish venture-capital regulation.

One particularly important reform expressly recognised investment in entities whose activity is based principally on technology applied to new business models, applications, processes or products as part of the principal object of venture capital.

This is highly relevant to aviation technology.

For example:

A startup developing AI-based aircraft-maintenance technology can potentially fall naturally within the technology-oriented investment environment.

Similarly:

• autonomous-drone systems;
• electric aircraft propulsion;
• aviation cybersecurity;
• flight-control software;
• predictive maintenance;
• aviation robotics

can fit the technological-investment rationale.

7. Venture Debt and Bank Financing

VC does not eliminate the role of banks.

A startup may use a capital stack such as:

The Spanish banking framework is important because credit institutions are subject to prudential regulation under Law 10/2014 and the EU Capital Requirements framework.

8. Why Banks Treat Aviation-Tech Startups Differently

A bank must assess:

• probability of default;
• collateral;
• cash flow;
• debt-service capacity;
• regulatory risks;
• certification risk;
• intellectual property;
• management quality;
• market prospects.

An aviation startup may have excellent technology but:

• no aircraft certification;
• no recurring revenue;
• no tangible collateral;
• negative cash flow.

Consequently, traditional bank debt may be unsuitable during the earliest stage.

This is where VC fills the equity-financing gap.

9. Public-Private Venture Capital

Spain has developed significant public-private mechanisms.

One important institution is ICO/AXIS.

ICO's Fond-ICO Global seeks to promote venture-capital funds managed by private managers investing in Spanish companies, while Fond-ICO Next Tech targets high-impact digital projects and scale-ups.

Fond-ICO Next Tech's investment criteria expressly include technology-based startups and projects, including pre-seed proof-of-concept, seed-stage development, prototyping and startup-stage scaling.

This can be highly relevant to aviation technology because aerospace/aviation technologies often require significant funding before the first commercial sale.

10. Aviation Technology and State-Aid Law

This is one of the most important legal issues.

If the Spanish State invests in an aviation-technology company or VC fund, the transaction may potentially involve Article 107 TFEU State-aid rules.

The central question is:

Is the State acting like a private investor seeking a commercially reasonable return, or is it conferring an economic advantage on the company?

The 2021 EU Guidelines on State aid to promote risk-finance investments specifically recognise the difficulty of financing high-risk sectors.

Importantly, the Guidelines note that downside protection may sometimes be necessary for sectors with technological barriers and high dependence on single projects requiring large upfront investment, expressly giving the aerospace and defence ecosystem as an example.

This is exceptionally relevant to aviation technology.

11. Market Economy Operator Principle

The Market Economy Operator Principle (MEOP) asks whether a public investor acted in a way comparable to a private investor.

For example:

Scenario A

Spain invests €50 million into an aviation startup on commercially negotiated terms alongside private VC funds.

Potential argument:

The State behaved like a market investor.

Scenario B

Spain invests €50 million on terms that no private investor would accept.

Potential issue:

The company may have received State aid.

The risk-finance guidelines specifically examine State intervention at different levels, including investors, financial intermediaries and final beneficiary companies.

12. Case Law

Case 1 — Stardust Marine, Case C-482/99

Court of Justice of the European Union

This is a foundational State-aid case.

The Court examined when financial resources involving public influence can be attributed to the State.

Principle

The fact that an entity is formally separate from the State does not automatically prevent its resources or conduct from falling within State-aid law.

Aviation-tech relevance

Suppose a Spanish public financial institution invests in an aviation-tech fund.

The legal analysis must consider:

• source of resources;
• State influence;
• investment decision;
• conditions of investment.

Thus, the legal form of the investment vehicle is not necessarily decisive.

13. Case 2 — Altmark Trans, Case C-280/00

The Court established the famous Altmark conditions concerning when public compensation does not constitute State aid.

Although the case concerned public-service compensation rather than VC, its importance is broader.

Principle

Public financial support must be examined carefully against EU State-aid criteria.

Aviation relevance

This becomes important where an aviation technology company provides services connected with:

• public transport;
• regional connectivity;
• air-navigation infrastructure;
• public-service aviation functions.

A public authority cannot simply label financial support as “public-service funding” and assume that State-aid rules disappear.

14. Case 3 — Commission v EDF, Case C-124/10 P

The EDF case is one of the leading authorities on the Market Economy Investor Principle.

The Court examined whether the State had acted in a manner comparable to a private investor.

Principle

The relevant question is essentially whether a private investor in a comparable situation would have made the same investment decision.

Aviation-tech relevance

If Spain or a public Spanish investment entity invests in an aviation-tech company:

commercial return analysis matters.

For example:

• valuation;
• expected IRR;
• exit strategy;
• risk;
• private co-investment;
• market terms

can all be relevant to demonstrating commercial behaviour.

15. Case 4 — Ryanair v Commission (Spain – COVID-19), T-628/20

This is one of the most directly relevant Spanish cases.

Spain established a €10 billion solvency-support fund for strategic Spanish undertakings experiencing temporary difficulties during COVID-19.

Ryanair challenged the Commission's approval of the scheme.

The General Court upheld the scheme, finding it proportionate and non-discriminatory.

Why this matters for aviation technology

The case demonstrates that Spain can establish large-scale public financing mechanisms for strategically important businesses provided the measure satisfies EU State-aid requirements.

An aviation-technology fund could potentially be structured around:

• strategic importance;
• market failure;
• proportionality;
• necessity;
• temporary financing needs;
• non-discrimination.

The case was later appealed, and the Court of Justice addressed the appeal in Case C-441/21 P.

16. Case 5 — Ryanair v Commission, C-441/21 P

The Court of Justice examined the Spanish recapitalisation scheme on appeal.

The dispute concerned:

• Article 107(3)(b) TFEU;
• recapitalisation;
• serious economic disturbance;
• proportionality;
• non-discrimination;
• freedom of establishment and services. 

Principle for aviation-tech financing

Public recapitalisation does not automatically violate EU competition law.

The financing mechanism must, however, satisfy the applicable State-aid conditions.

This is particularly relevant where Spain wants to support an aviation-tech company regarded as strategically important to the national economy.

17. Case 6 — Ryanair v Commission (Finnair), C-353/21 P

In this case, Finland guaranteed a loan of €600 million to Finnair.

The General Court upheld the measure, and the Court of Justice subsequently dismissed Ryanair's appeal.

Banking-law significance

This case is particularly useful because the State support took the form of a loan guarantee.

That is directly relevant to aviation technology.

A Spanish State-backed guarantee could potentially make it possible for an aviation-tech company to obtain bank financing where the company's risk profile would otherwise prevent affordable credit.

The legal issue then becomes:

Is the guarantee compatible with EU State-aid rules?

18. Case 7 — Carpatair v Commission, T-522/20

This aviation State-aid litigation concerned Timișoara Airport and Wizz Air.

The General Court examined whether airport charges and arrangements with Wizz Air involved a selective advantage under Article 107(1) TFEU and considered the private operator test.

The case has continued through appeals and referral proceedings; in May 2026, the General Court again annulled part of the Commission decision concerning the airport charges.

Importance

It demonstrates that:

commercial-looking arrangements in the aviation sector can still be scrutinised under State-aid law.

For an aviation-tech investor, this is important where financing is combined with:

• airport access;
• preferential charges;
• public infrastructure;
• public procurement;
• public guarantees.

19. Case 8 — Ryanair v Commission, T-388/20 / C-353/21 P

The Finnair litigation also illustrates the relationship between bank lending and government guarantees.

A State guarantee can facilitate access to private credit without the State directly providing the entire loan.

Aviation-tech application

Suppose:

Spanish aviation-tech startup needs €100 million.

A bank is willing to lend only €40 million.

A public guarantee covers part of the remaining risk.

The legal analysis must examine whether:

• the guarantee creates an economic advantage;
• it satisfies applicable State-aid conditions;
• the guarantee is proportionate;
• the beneficiary meets eligibility requirements.

20. Crowdfunding as an Alternative Financing Channel

Spain also regulates crowdfunding.

Law 18/2022 adapted Spanish law to Regulation (EU) 2020/1503 on European crowdfunding service providers. CNMV is the Spanish competent authority for the relevant crowdfunding regime.

This creates another possible financing route for aviation-tech startups.

For example:

Drone startup

→ authorised crowdfunding platform

→ multiple investors

→ equity/debt financing

This may be useful where conventional VC funding is insufficient.

21. Startup Law and Aviation Technology

Law 28/2022 is particularly significant for technology startups.

Among its measures:

• qualifying startups can benefit from a 15% corporate-tax rate for specified initial profitable periods;
• tax payment can be deferred in the first two positive-tax periods under the statutory conditions;
• employee stock-option treatment was improved;
• the investment deduction was increased from 30% to 50%, with the maximum base increased from €60,000 to €100,000. 

These measures can make Spanish aviation-tech startups more attractive to investors.

22. Intellectual Property and VC Valuation

Aviation technology frequently has relatively little traditional collateral.

Instead, value may lie in:

• patents;
• software;
• algorithms;
• designs;
• trade secrets;
• engineering know-how;
• certification data;
• proprietary manufacturing processes.

Consequently, investors undertake extensive IP due diligence.

A bank may be reluctant to treat early-stage intellectual property as equivalent to real estate collateral.

A VC fund, however, may value IP as a major component of future enterprise value.

23. Aviation Certification as an Investment Risk

Certification is a particularly important issue.

An investor may ask:

“The prototype works—but can it legally fly commercially?”

For innovative air mobility, EASA has been developing a regulatory framework addressing technologies such as VTOL-capable aircraft and certified unmanned aircraft.

This means an aviation-tech investor must distinguish:

technological feasibility

from

regulatory/certification feasibility.

A startup with excellent engineering but no credible certification pathway may be a poor VC investment.

24. Drones and Unmanned Aircraft

The EU UAS framework is particularly important for drone startups.

EASA's consolidated UAS framework incorporates:

• Regulation (EU) 2019/947;
• Regulation (EU) 2019/945;
• subsequent amendments concerning certified UAS. 

Therefore, a Spanish drone startup's financing structure should be analysed together with:

• operational category;
• certification;
• airworthiness;
• operator requirements;
• product compliance.

Regulatory uncertainty directly affects valuation.

25. eVTOL and Innovative Air Mobility

eVTOL is perhaps the clearest example of why banking law and aviation law intersect.

A startup might need:

Stage 1

€5 million — engineering

Stage 2

€20 million — prototype

Stage 3

€50 million — certification

Stage 4

€100+ million — production and infrastructure

Traditional bank lending may be difficult during stages 1–3.

Therefore:

VC → early risk capital

Public finance → de-risking

Bank debt → later-stage financing

Strategic investor → industrialisation

This creates a layered financial ecosystem.

26. Role of Public Venture Capital

Spain's public investment ecosystem is important because aviation technology may suffer from a financing gap.

ICO's venture-capital instruments seek to mobilise private investment rather than simply substitute for it.

Fond-ICO Global, for example, is intended to promote private venture-capital funds investing in Spanish companies.

Fond-ICO Next Tech similarly targets high-impact digital projects and scale-ups.

For aviation technology, this can help attract private capital into projects that otherwise face:

• high technological risk;
• long time to market;
• certification costs;
• high upfront investment.

27. Banking Regulation and Direct Bank Equity Investment

Banks are not ordinary VC funds.

A Spanish credit institution is subject to prudential regulation under Law 10/2014, the EU Capital Requirements Regulation and related supervisory rules.

Therefore, when a bank becomes directly exposed to an aviation-tech company, issues such as:

• capital treatment;
• concentration;
• governance;
• risk management;
• connected exposures;
• significant holdings

may become relevant.

This is why banks frequently participate in the ecosystem through loans, guarantees, structured finance or investment through regulated vehicles, rather than behaving exactly like a traditional VC fund.

28. Difference Between VC and Bank Financing

29. State-Aid Risk in Public VC Funds

Public investment can create State-aid issues at several levels:

Level 1 — Investor

Government gives preferential terms to private investors.

Level 2 — Fund manager

Government provides an advantage to the VC intermediary.

Level 3 — Portfolio company

The aviation-tech startup receives capital on terms unavailable in the market.

The EU risk-finance guidelines specifically recognise that State aid can arise at different levels and require analysis of necessity, incentive effect and competition distortions.

30. Market Failure and Aviation Technology

Aviation technology is a classic candidate for a market-failure analysis.

Reasons include:

• high information asymmetry;
• technological uncertainty;
• long development periods;
• high fixed costs;
• certification uncertainty;
• limited collateral;
• uncertain demand;
• large capital requirements.

The EU risk-finance guidelines therefore recognise the importance of demonstrating the need for State intervention rather than assuming every public investment is automatically justified.

31. Proportionality

Public financing must not unnecessarily distort the market.

For example:

Acceptable structure

Government provides limited risk-sharing to attract private investors.

Problematic structure

Government provides virtually unlimited cheap capital that eliminates competing private financiers.

The risk-finance framework specifically considers crowding-out of private investors and competitive distortions.

Thus:

The objective is not to replace the private VC market but to correct genuine financing gaps.

32. Governance of Aviation-Tech VC Funds

A well-structured fund should address:

• investment committee;
• conflicts of interest;
• valuation;
• portfolio concentration;
• related-party transactions;
• reporting;
• audit;
• investor rights;
• exit strategy.

For aviation technology, specialist expertise is particularly important.

The investment committee should ideally understand both:

finance + aviation technology.

33. Due Diligence Before Investment

An investor should conduct at least five categories of due diligence.

1. Financial

• burn rate;
• runway;
• valuation;
• debt;
• cap table.

2. Technical

• technology readiness;
• prototype;
• engineering;
• testing.

3. Regulatory

• EASA certification;
• operational approvals;
• airworthiness;
• drone classification.

4. IP

• patents;
• ownership;
• licences;
• trade secrets.

5. Commercial

• customers;
• contracts;
• market size;
• competition.

34. Example: Spanish eVTOL Startup

Imagine a Spanish company developing an electric VTOL aircraft.

It raises:

€10 million Series A

from a Spanish VC fund.

Then:

€30 million Series B

from international investors.

Then:

€50 million bank/venture debt

for manufacturing equipment.

Then:

€20 million public-backed financing

to support strategic scale-up.

The legal analysis becomes:

VC investment

Law 22/2014.

Startup incentives

Law 28/2022.

Bank loan

Law 10/2014 + EU prudential framework.

Public investment

EU State-aid law.

Aircraft certification

EASA/EU aviation framework.

IP

Spanish/EU IP law.

Thus, the financing cannot be analysed solely under “banking law.”

35. Important Case-Law Principles — Summary

36. Key Legal Issues for Investors

An investor considering a Spanish aviation-tech startup should ask:

Question 1

Is the investment being made through a properly regulated VC vehicle?

Question 2

Does the startup qualify for Spanish startup incentives?

Question 3

Is the financing equity, debt, convertible or hybrid?

Question 4

Does a bank's involvement trigger prudential concerns?

Question 5

Does public financing constitute State aid?

Question 6

Is the State investing on market terms?

Question 7

Does the company have a realistic EASA certification pathway?

Question 8

Who owns the aviation technology/IP?

Question 9

Are foreign investors subject to additional regulatory scrutiny?

Question 10

Can the company ultimately obtain commercial aviation approval?

37. Major Legal Challenges

A. High capital requirements

Aircraft technologies can require much more capital than ordinary software startups.

B. Long investment horizon

VC investors may wait many years for an exit.

C. Certification risk

Failure to obtain certification can destroy projected valuation.

D. State-aid constraints

Government support cannot be structured in a way that unlawfully distorts competition.

E. Bank prudential constraints

Banks cannot simply take unlimited high-risk startup exposure.

F. Cross-border regulation

International aviation technology frequently involves multiple EU and non-EU jurisdictions.

38. Overall Legal Position

The Spanish legal framework is increasingly supportive of technology-oriented venture capital.

Three developments are particularly important:

First, Law 22/2014 provides the institutional framework for venture capital.

Second, Law 18/2022 modernised the VC regime and expressly recognised technology-based activities while also facilitating greater flexibility in investment structures.

Third, Law 28/2022 created a broader startup ecosystem with tax and investment incentives designed to make Spanish emerging companies more attractive to capital.

For aviation technology, these Spanish rules operate alongside EU State-aid law and EASA aviation regulation.

39. Conclusion

Venture capital in Spanish aviation technology is legally a multi-layered financing activity rather than a purely banking transaction.

The fundamental structure is:

Spanish VC law

↓

Startup Law

↓

Banking/prudential regulation

↓

Public-finance and State-aid law

↓

EASA aviation regulation

↓

Corporate/IP/contract law

The most important Spanish statute for VC is Law 22/2014, while Law 18/2022 strengthened the ability of venture-capital entities to invest in technology-driven businesses. Spain's Law 28/2022 further improves the investment environment for qualifying startups.

From the banking perspective, banks provide an important complementary source of capital, but they operate under the stricter prudential framework of Law 10/2014 and EU banking rules.

The aviation dimension adds another layer: an investor must assess whether the underlying technology can satisfy the applicable EU aviation and certification framework. This is especially significant for drones, UAS and eVTOL/innovative-air-mobility projects, for which EASA has developed increasingly specific regulatory material.

Finally, EU State-aid jurisprudence is crucial whenever public money participates in aviation-tech financing. EDF, Stardust Marine, the Spanish Ryanair litigation and Carpatair demonstrate that public investment, guarantees, recapitalisation and preferential aviation arrangements must be examined against the Market Economy Operator Principle, proportionality, selectivity and competition requirements.

In examination terms: Spain's legal framework facilitates venture-capital investment in aviation technology through regulated VC vehicles, startup incentives and public-private financing, but such investment remains subject to banking prudential rules, CNMV supervision where applicable, EU State-aid controls and aviation certification requirements. The principal legal challenge is to provide sufficient risk capital for technologically and commercially uncertain aviation projects without undermining financial stability or competition.