Let’s be fair. The Spanish capital is famous for many things, such as its food, blue skies, football, arts scene and exciting nightlife. But it’s not very well known (not yet, at least) as an ideal place to launch a startup.

Although Spain is the fourth biggest European country by size, and the seventh largest by population, the country is home to very few internationally known tech companies.

As well, Spain is not an enterprise-focused country dedicated to attracting valuable foreign interest. When dealing with business regulations, it’s far from fast and simple. For instance, it takes more than 24 hours to set up a company here (unlike other countries such as Denmark).

The Spanish workforce is moreover among the least productive in Europe, although Spaniards sleep fewer hours and work longer days than their European neighbors.

The number of public funding schemes in Spain is limited and rigid, and its venture capital scene is very much underdeveloped, forcing startups to seek funding in the UK, Germany or the US.

Doing something as presumably straight forward as opening a bank account can become challenging because many branch employees don’t speak English well enough, and banks will rarely give you documentation that’s not in the Spanish language.

[Read also: How to open a bank account as an entrepreneur in Spain ]

And even though the living costs are much lower than in other countries and the standard of living is decently high, Spanish entrepreneurs continue to complain about the same problems: bureaucracy, taxes and lack of funding.

Simply put, Madrid doesn’t exactly offer fertile ground for technical innovation right now. The city lacks the entrepreneurial vision necessary to support a sustainable and growing ecosystem. But all hope is not lost.

In many ways, Spain can still be considered a success story. Having grown at an impressive pace over the past few years, 2018 was a great year for Spanish startups. Last year, for instance, Uber rival and Madrid-based startup Cabify became Spain’s first unicorn.

Also in 2018, Spain was rated by the European Commission as the most improved digital economy in the EU, with a score close to five points (the EU average is 3.2).

Although there’s still a lot of work to be done, Spain climbed from 51st place in 2010 to 30th place in the World Bank’s 2019 Doing Business report, surpassing countries like France and the Netherlands, and showing that administrative processes are becoming more agile.

With the economic crisis a thing of the past, locals are increasingly embracing entrepreneurship. Open-plan offices have arrived and hierarchical business structures are slowly breaking down. Meanwhile channels of communication between employees and managers are opening up.

In 2013 the Spanish government passed a law to help domestic businesses and attract foreign talent and investment. This included a visa category for foreign entrepreneurs, requiring them to have little more than a business plan and enough money to support themselves while living here.

Although Spain only has a few public funding schemes, access to accelerators and investors has improved dramatically. The government’s ENISA program has been greatly enhanced, becoming a very popular source of financing that’s accessible to most new startups.

The City of Madrid also offers an improved array of financing and grant options, such as Avalmadrid, and a series of friendly financial arrangements with banking institutions.

Ranked in third place worldwide for its number of coworking spaces, there’s plenty of affordable office space here. In fact, Madrid not long ago began offering coworking spaces free of charge for six months.

Furthermore, there have been efforts to foster entrepreneurial talent and innovation. The city council recently opened LA NAVE, a multifunctional space of 13,000 m² where companies, investors, universities and citizens can participate in the development of innovative projects.

Governments are advancing new initiatives and laws to make processes easier for startups in Spain. Recently, for example, Spain’s prime minister advanced a set of new initiatives to promote innovation and entrepreneurship.

Madrid is also quickly becoming a worldwide reference point for business tourism, consolidating itself as a city for fairs and congresses. Currently, more than 40 national and international events and prizes related to business, creativity and innovation are held annually in the Spanish capital.

With entrepreneurship now a very valid option across Spain, aspiring founders should be paying attention to Madrid in particular. Not only is it now more feasible to launch a company here, it’s even considered cool.

Madrid’s Embajadores barrio – a gate to the creative district of Arganzuela – came in first place last year in Time Out’s list of the world's coolest neighbourhood.

Also last year, Monocle magazine deemed Madrid the world’s seventh most liveable city. In June this year, Monocle is set to host its annual Quality of Life conference in Madrid.

Costs and availability of housing and office space are cheap and abundant, and living expenses are a fraction of what you would pay in cities like London or San Francisco.

There’s also plenty of high-quality talented techies here who are available for work. A good IT engineer can be hired in Madrid for an annual salary of about €30,000.

[Read also: Madrid’s Arganzuela district deserves to be put on the startup ecosystem map ]

Another reason to consider starting up in Madrid is for its nature. Most people don’t know that wilderness exists a mere thirty minutes away from the capital – which you don’t have in Paris, London, Barcelona and other cities. There are incredible mountain areas, forests, amazing bike routes and hiking trails to take advantage of.

Madrid has yet another advantage that isn’t as widely known. While London has 65 days of sunshine per year, and Lisbon has 270, Madrid has 290. Who gets tired of sunny days?

With cheap transport links to the rest of the country, the beaches of Valencia, Malaga and Barcelona are as close as two hours away by train. And in the winter months, Madrid has some snowy slopes right at its doorstep. The Sierra de Guadarrama mountain range has several ski resorts, the nearest being Puerto de Navacerrada – a mere 65 kilometers from Madrid.

Madrid may lack the cosmopolitan nature of New York or the panache of Paris, but it's special in its own way. Besides, what makes it unique is not its amazing weather, gastronomy or parties – it’s the people.

What makes Madrileños (locals in Madrid) different from the rest the world is, without question, the art of living. The cheerful and hospitable character of Madrileños is welcoming like no other, and what really makes Madrid one of the best places to live in the world.

If you have long dreamed of living and working somewhere where it’s not saturated and prices are still affordable, it couldn’t be a better time to base yourself in Madrid. Here, in addition to an exceptional quality of life and a pace that’s just right for you and your startup team, Madrid will welcome you with open arms.

[ See also: How Valencia's startup ecosystem is vying for the top spot in Spain ]

Main photo of Plaza Mayor in Madrid by Unsplash/Victor Garcia