A living dashboard of the EU27’s legislations relating to social enterprise and other social economy actors.

Welcome to the European Social and Solidarity Economy Policy living dashboard, a summary of the legislative ecosystems surrounding the social and solidarity economy in the different EU countries. This work, curated by Euclid Network Policy Team, briefly summarises the country specific legislations that deal with the different legal entities which make up the social and solidarity economy (SSE) in each EU Member State. Each country has its own cultural, institutional and social history which has influenced the development of their legislative ecosystems. The differences between EU countries’ laws lie in the details about the working of the SSE in different states. It is therefore important to understand them to the fullest.

Here are some of the questions that our dashboard will answer for you:

  • What do countries’ law say about the SSE?
  • Is there a general law dealing specifically with the SSE?
  • What legal forms do social enterprises take in different EU countries?
  • Are there financing and support measures?

The aim of our work is to facilitate access to information concerning the working of the SSE in Europe. This will make it easier for people to understand it, along with the limits that different legislations pose to their country’s ecosystem. It will enable for a rapid access to summaries which you can employ in your daily work driving social impact.

Since the legislative bodies of the EU27 are constantly evolving, this is a living dashboard which is envisaged to be continually updated as developments unfold. If you find errors, know about new developments, would like to have a country added, or have some questions please contact toby@euclidnetwork.eu


If you would like to contact one of our members in the different countries, you can find an overview of EN’s membership here.


NOTE: While all efforts have been made to ensure the information presented here is accurate, reliable and up-to-date, Euclid Network cannot guarantee this. Hence, all information presented here is without guarantee.

Last update: 11/02/2022

This project was the result of the work of Euclid Network’s Policy Team. The summaries are mainly based on research conducted by the European Commission’s Directorate General on Employment, Social Affairs and Inclusion. These reports, on which the core of this project is based, can be found under the name of “Social Enterprises and their Ecosystems in Europe” on the Commission’s website. Additionally, the team conducted first hand research to complement the information provided in the reports. In these cases, we proceeded in two ways. First, the specific legislations of the countries in question (The Netherlands and Sweden are two example) were analysed based on second-hand translations of the laws as well as on the academic literature on the SSE ecosystems in the country. Secondly, in some cases, the Policy Team was able to conduct interviews with some of Euclid Network’s members, namely support organisation deeply embedded in the country-specific contexts. This enabled access to further insights into the legislative system of some countries (Portugal and Latvia are two examples). 

Please note that the focus and efforts of the research went mainly towards the creation of the summaries of the legislations. The sections concerning financial and support measures are an additional element covered as a result of the work and hence lack detail. The decision of reporting also this partial introduction has been made with the aim of providing the reader with additional information concerning the non-legislative context in a user friendly way. The Policy Team has not yet conducted in-depth research on the matter and these sections are not to be considered comprehensive.

Shall any questions concerning the methodology occur to you, you can reach us at toby@euclidnetwork.eu

Due to the relatively early stage of development of the legislative ecosystems of some countries in the EU, the Policy Team decided to broaden the focus of the project. Rather than keeping a focus strictly on social enterprises, the dashboard deals with the wider context of the Social and Solidarity Economy. As not all countries have specific legislations concerning social enterprises (SE) (e.g. a social enterprise status or legal form), this approach enables for a deeper understanding of the legislative ecosystems. In countries lacking a specific SE legal status, what we identify as SEs (according to the 2011 Social Business Initiative) takes different legal forms such as those of cooperative or association depending on the specific missions and modes of operation of the organisation. Therefore, a strict focus on legislation specifically aimed at “SE” would fail to paint a full picture of the legal system surrounding the sector.

All abbreviations are explained at their first occurrence. Nevertheless, the following is a list of the most widely used.

  • EaSi: Employment and Social Innovation Programme
  • EC: European Commission
  • EIF: European Investment Fund
  • EN: Euclid Network
  • ESF: European Social Fund
  • EU: European Union
  • GO: Government Ordinance
  • LLC: Limited Liability Company
  • NRSSE: National Registry of Social and Solidarity Economy
  • NPO: Non-Profit Organisation
  • NGO: Non-Governmental Organisation
  • PBC: Public Benefit Company
  • SBI: Social Business Initiative
  • SDGs: Sustainable Development Goals
  • SE: Social Enterprise
  • SINE: Social Integration Economy
  • SSE: Social and Solidarity Economy
  • VAT: Value Added Tax
  • WISE: Work Integration Social Enterprise

List of Countries


There is no particular legal form for social enterprise in Austria, and the term is not even used in law. The legal forms used in Austria include the public-benefit limited company (gemeinnützige GmbH or gGmbH), associations (Verein) and cooperatives (Genossenschaft). 

Limited Liability Company Act (71/2018)

According to the act, the gGmbH is a company established to pursue public-benefit goals. The economic activity is a core goal of the company. “The possibility for GmbH to be granted the public-benefit status has been developed in tax law”. Companies which demonstrate a public-benefit purpose can get tax benefits. The gGmbH may generate profits, but these must remain within the organisation. A gGmbH is owned by several shareholders, which could be public entities or other social enterprises, and an association can be the owner of one or more gGmbH. Supervisory boards are not needed.

Associations Act (32/2018)

By law, an association is defined as a non-profit organisation with a general-interest orientation. Even if the core goal of an association is not to generate profit, it is allowed to make profits if they are re-invested in the organisation. If the revenues or expenditures are higher than 3 million EUR in between two years or if the income on donations is more that 1 million EUR in between two years the association has to provide a balance sheet. 

Cooperative Schemes Act (104/2017)

According to this legislation, the principal objective of a cooperative is the promotion of members’ economic activities, but this does not rule out the possibility to pursue social goals too. All cooperatives have to implement a two-tiered governance structure that must include a general meeting and a management board. The management of cooperatives must be directed by its members. They also have to join an auditing association. 

Federal Tax Code (62/2018)

The legal status of Gemeinnützigkeit (“public benefit”) plays a significant role for organisations (except cooperatives) with social aims in Austria, providing them with tax incentives. Cooperatives, which also operate under the limited-profit act, are exempt from cooperation tax. The concrete tax benefits are defined in the tax laws. They specifically deal with corporate tax, municipal tax, VAT, as well as land and the inheritance tax.

If an organisation lose this status following controls by the tax office, it is forced to pay back the tax benefits.

Income Tax Act (400/1988)

Private people and companies can deduct donations up to 10% of their profits from their income tax. “An organisation can receive donations up to a limit of 500,000 EUR in five years”.

Financing and Support Measures

  1. aws: The aws aims to promotes businesses (not only SEs) with financial tools and advisory services at all stages. However, they offer with the “aws Social Business Call” a grant scheme developed for SEs.
  1. Support measures particularly created for SEs are rare in Austria. The existing ones mainly address WISEs.
  1. The ESF is used at different levels and are responsible for a great part of the subsidies in Austria.
  1. The EaSI programme in cooperation with the “Erste Bank Group” and their local networks provide loans in the amount of 50 million EUR for SEs in Austria and other countriesnamely Croatia, Czech Republic, Hungary, Romania, Serbia and Slovakia.
  1. There are different networks (e.g. Sozialwirtschaft Österreich, Impact Hub Vienna, Dachverband habiTAT) for various thematic areas which provide support for SEs in the respective fields. No recognised umbrella organisation is present at the moment.
  1. Various foundations like “Sinnstifter” and “Erste Stiftung” provide funding and business support for SEs. 


In Belgium SEs are mostly managed, regulated and supported through a system of regional decrees and public provisions related to specific legal forms, sectors of activity, and social mission types. After the institutional reform of 2008, SINE (social integration economy) was transferred to the competence of the regions. Moreover, most non-profit social enterprises are partly governed by regulations specific to their field of activity. It is important to notice that most SEs operate as associations, or, less frequently, foundations, mutuals, cooperatives and social purpose companies.
Below is a summary of the national laws.

Code on Companies and Associations (2019)

  • The code defines an association as constituted by an agreement between two or more persons which pursues a disinterested goal in the exercise of specific activities that constitute its purpose. Associations may not distribute, directly or indirectly, any patrimonial benefit to its shareholders except for the disinterested purpose determined by the laws of the association. 
  • Also, the code created the entrepreneuralisation of associations. They can now engage in economic activities of industrial or commercial nature, even as their main activity, practically working as SEs.
  1. COOPERATIVES (article 6):
  • Article 6 defines cooperatives according to a series of conditions. The most important are: (i) the goal of creating positive social impact for people, the environment, or society; (ii) a clear description of the social goals; (iii) no board member shall have more than 1/10th of the votes; (iv) publish an annual social impact report 
In associations and foundations surpluses must be reinvested in the activities and are thus not taxed. The other companies, cooperatives included, are all subject to company tax. 
There are NO tax benefits specific to social enterprises: VAT does not change for SEs; income tax is only affected by the absence of a profit-motive. However, under certain conditions, WISEs benefit from a reduced VAT rate, and other tax reductions. 

Law on Social Purpose Companies (1995, repealed in 2019)

This law falls in the framework of Company Law. All companies can acquire the social purpose status if they are “not dedicated to the enrichment of their members”, and if their statutes comply with a series of conditions. With the repeal in 2019, only cooperatives can get an accreditation of “social enterprise” (which is not a legal form).

Ordinance of 23 July 2018

This ordinance is crucial because it defines a social enterprise based on the EMES International Research Network criteria. It states that “a social enterprise complies with the following principles: (a) the implementation of an economic project; (b) the pursuit of a social purpose; (c) the exercise of democratic governance”.

Financing and Support Measures

  1. Social Innovation Factory (Sociale Innovatie Fabriek): It “promotes, guides and supports social entrepreneurship and social innovation in tackling societal challenges” and combines the roles of advisory structure and incubator. The network also assists innovators in their search for other partners or funders/investors.
  1. Specific measures address WISEs. They are specifically targeting different types of activities and vary between the different regions. 
  1. The ESF are used at the regional level as well. 


In Bulgaria enterprises with social aims mainly take the forms of (i) associations and foundations carrying out economic activities; (ii) Chitalishta; (iii) cooperatives of people with disabilities; (iv) specialised enterprises for the integration of disabled people. 

Act on Enterprises of Social and Solidarity Economy (240/2018)

This law provides a clear definition of SEs along with measures to promote them and mechanisms of interaction between SEs, the state, and other stakeholders. It introduces formal criteria and procedural rules to identify the actors of the social economy. Moreover, it establishes a national registry of SEs and a procedure to identify social added value. 
It creates the opportunity for registered SEs to benefit from different sources of finance – such as resources from the Social Protection Fund – and facilitates investments that have a significant social impact.
Finally, it allows local authorities to promote social services and other forms of the social and solidarity economy – e.g., by providing municipal/state property.
The Act defines two classes of SEs: 
  1. Class A
  • These are SEs which (i) produce social added value; (ii) are transparently managed with participation from its employees; (iii) either spend 50% of profits to carry out social activity OR have a minimum of 30% of its employees (a minimum of 3 people) which are representatives of enlisted disadvantaged groups.
  1. Class A+
  • These are class A SEs which meet at least one of these additional conditions: (i) implement their social value added in a municipality which has a higher unemployment than the national average; (ii) spend 50% of profits to carry out social activity; (iii) at least 30% of the employed from the disadvantaged groups have worked continuously within the SE for the last six months.
The Act also introduces five fundamental principles of the social economy: 
  1. Priority of social to economic objectives;
  2. Cooperation for public and/or collective benefit;
  3. Publicity and transparency;
  4. Independence from the public authorities;
  5. Participation of members, workers or employees in managerial decision-making.

Act on Public Cultural Associations (SG. No.89/1996, last amended 2018)

Chitalishta (Public Cultural associations) are defined as self-governing associations founded by a constituent assembly of at least 50 people. At their foundation, they draw a charter and choose their governing bodies. They work to develop and promote local cultural/social/educational activities. Chitalishta can enter economic activity if it is related to the subject of their main activity. They can reinvest revenue but cannot distribute profits. This means that their sources of finance are membership fees; cultural-educational and information activities; subsidies from state and municipal budgets; rent from movable and immovable property; and donations.

Act on Non-Profit Legal Entities (SG. No.81/2000, last amended 2018)

Among other things, this law defines how association and foundations are established. They can be in public or private benefit and those which meet the criteria for being in the public benefit are included in a special register.
It is important to point out that:
  1. Once they declare themselves to be in public benefit they cannot go back to the private benefit status anymore (vice versa is possible);
  2. Public benefit NPOs have stringent requirements concerning the spending of their resources and the disclosure requirements for financial documents;
  3. NPOs can engage in economic activity under certain conditions
The public benefit can be granted for: (i) the development and promotion of civil society, civic participation and good governance; (ii) the development and validation of spiritual values, health, education, science, culture, technology, technology or physical culture; (iii) the support of children, people with disabilities, and people and communities at risk of social exclusion; (iv) the protection of human rights or the environment; (v) other purposes set by law.

Act on Cooperatives (SG. No. 113/1999, last amended 2018)

This law defines cooperatives as associations of individuals whose aim is to carry out economic activity to satisfy their social, cultural, and economic interest – and to do so through mutual assistance and cooperation. Each member has the right to vote. 
The law allows for the distribution of profit (dividends) to cooperative members by decision of its General Assembly.

Act on Integration of People with Disabilities (SG. No. 81/2004, last amended 2017)

The act defines some specific criteria that are to be met in order to be recognised as an enterprise of people with disabilities. Any legal form – from cooperatives to regular businesses – that meets the criteria can be considered as such.
The criteria are the followings: 
  • Registered under the Commerce Act or the Cooperatives’ Act;
  • Manufacture goods or provide services;
  • Have a relative share of employed people with disabilities as follows:
    • For specialised enterprises and cooperatives of blind and partially sighted persons: not less than 20% of the total number of staff;
    • For specialised enterprises and cooperatives of people with hearing impairment: not less than 30% of the total number of staff;
    • For specialised enterprises and cooperatives of persons with other disabilities: not less than 50% of the total number of staff – these work similarly to WISEs;
  • Enlisted in the register of the Agency for People with Disabilities.

Financing and Support Measures

  1. Corporate Income Tax: Provides tax incentives to donors of vulnerable groups, and benefits to employers of vulnerable groups. Moreover, it gives up to 30% reimbursed of the insurance contributions for the total number of working staff to specialised enterprises and cooperatives for people with disabilities could get.
  1.  Exemption from VAT on certain goods and services. 
PLEASE NOTE: 1. and 2. are available to all enterprises and are not specific to SEs
  1. Bi-annual Social Economy Action Plans: Focus on raising awareness and stimulating statistical representation of the sector. 


In Croatia, SEs, as defined according to the EU standards of the SBI, can take the legal forms of (i) associations, (ii) cooperatives (especially social cooperative), (iii) foundations, (iv) companies, and (v) private institutions.

Strategy for Social Entrepreneurship Development (2015)

It provides a definition of social entrepreneurship and 9 specific criteria for the identification of SEs. Generally, SEs are defined as “business[es] based on the principles of social, environmental and economic sustainability, in which generated profit or surplus is entirely or largely reinvested for the benefit of the community”. No specific legal forms are defined for SEs to take. It is accompanied by the other policies which aim at the inclusion of disadvantaged groups (e.g., Roma people)

Act on Associations (OG 74/2014, 70/2017)

The law defines this legal form as types of free and voluntary association of legal and natural persons with the aim of protecting human rights, environment, social cultural, academic, technical and other beliefs not contrary to the Constitution and the Law. A full list of the activities which associations can carry out is reported in article 34 of this law.
They also must have no intentions of gaining an economic benefit from their activities. Nevertheless, associations can perform economic activities under certain conditions which entail, among others, greater transparency and regulation of their activity. 

Act on Cooperatives (OG 34/2011, 125/2013, 74/2014)

The law defines cooperatives as “voluntary, open, autonomous and independent entit[ies] governed by [their] member[s]”. They are “based on togetherness and mutual assistance, [and aim] to achieve, enhance and protect the individual and joint[…] interests for which [they] were established”.  Article 38 of this act enables cooperatives to be recognised as NPOs, entering the NPO register, if they are established “exclusively to meed their members’ needs, and not to gain profits”. 
Article 66 introduces the social cooperative. These can be established for two purposes:  (i) provide assistance to socially vulnerable groups (ii) work integration of excluded and disadvantaged people. Nevertheless, the social cooperative label is mainly symbolic: they are not subject to different legislations.

Act on Trusts and Foundations (OG 36/1965, 64/2001)

According to this law, natural and legal persons can establish foundations with the purpose of pursuing charitable issues – i.e., to support people in need – or issues in the general interest – i.e., activities advancing social and material conditions of society. They must be approved by the state.
Article 16 allows for increasing a foundation’s assets. Foundations can generate income through “charitable events, lotteries, productions and sales of suitable products”. The only legal restraint in this regard is that all “assets must be used exclusively for achieving the foundation’s purpose”.

Act on Institutions (OG 76/1993, 29/1997, 47/1999, 35/2008)

Institutions are defined by this law as permanent activities in fields of general interest without the aim of making a profit (Article 1). They must be approved by the state and depending on which activities are carried out, the local government may need to approve the founding documents. Institutions founded by private persons or entities – and not by authorities, religious communities, or by associations – are subject to profit tax. Article 57 allows for economic activities to be carried out if it is a mean to gain revenue for the institution’s operations.

Act on Financial Activities and Accounting of NPOs (OG 121/2014)

According to this act, associations/foundation can carry out economic activities if their intentions to do so is stated in their statute (and therefore enter in the Tax Register) and if they are NPOs. Institutions founded by private persons or entities are excluded from this law, even when they have to meet a non-profit distribution constraint. 

Profit Tax Act (OG 177/2004, 90/2005, 57/2006, 146/2008, 80/2010, 22/2012)

Exempts NPOs from paying this tax. However, if NPOs engage in economic activity and gain unjustified privileged positions in the market, then they shall pay the profit tax for those activities. Grants and donations are not subject to profit tax. 

Financing and Support Measures

  1. Exemption from paying VAT if the SE is an NPO with a revenue lower than 40,000 EUR.
  2. WISEs and entities employing people with disabilities can receive incentives such as subsidies of about 10-70% of the wage base.
  3. There are incentives in the form of social security cost reductions in the case of employment of (i) people younger than 30; (ii) people employed for the first time; (iii) unemployed/long-term unemployed; (iv) people in professional training. 
  4. Income Tax Act and Profit Tax Act: Provide tax reductions, of up to 2% off of personal income, to individuals and companies donating a percentage of their income to NPOs
  5. A series of grants are available to SEs, generally provided by local governments and private entities. 


Currently Cyprus does not have a specific legal framework for SEs but is the process of discussing the creation of one. After passing the law, two different kinds of SE can be qualified. General purpose (GP) SEs which aim to achieve a social mission; and social inclusion/integration (SI) SEs which try to achieve social goals while having a workforce that consists of at least 40% of persons belonging to vulnerable groups. SEs can exist under the legal frameworks of “limited liability companies”, “cooperative societies”, “associations”, and “foundations”.

Legislation of Limited liability companies (124/2006)

LLCs can be divided into two categories:

  • Company by guarantee: This is defined by the law as a company without shared capital but with a shared, often charitable, objective. They are allowed to generate income but are not allowed to distribute their profits. Profits must be reinvested to achieve the stated(social) goal. The members of the company agree to contribute money in case of economic crisis. However, companies operating under this framework can pay their founders/directors extraordinary high salaries.
  • Company by shares: This is defined as a company that is allowed to make and distribute profits while achieving a social goal. 

Legislation of Cooperative Societies (Cap 114 & Law 28/1959)

Cooperative societies serve the interest of the members according to their principles. They are market orientated and allowed to distribute a share of the profits.

According to this law, it is not allowed to register a cooperative society in a sector where another cooperative society with similar goals is already active. Moreover, it requires for a feasibility study to be provided to the authorities before a registration is possible. At least 50% of the annual net profits must be converted in capital reserves. At least 12 people, living in the same district, are needed as founding members.

Legislation of Associations (57/1972 & 85(I)/1997)

According to these laws, associations must be formed by at least 20 people who collaborate closely to achieve a shared, social objective. They are not allowed to distribute profits. However, they are allowed to reinvest profits, but they are not allowed to come up with large scale commercial activities. 

Legislation of Foundations (57/1972 & 85(I)/1997)

Funds are allowed to use different economic measures to promote their (charitable) purpose. Profits cannot be distributed. The fund acts as a mean to finance itself.

Financing and Support Measures

  1. At the time of writing, the Cypriot state is reviewing a SE law that would create a special (legal) framework for SEs in Cyprus. The law is going to demarcate between SEs of general scope and social integration enterprises. The proposed framework also includes multiple structural and financial benefits for SEs.
  2. There are no specific support measures for SEs in place right now. However, there are other schemes like the Cyprus Entrepreneurship Fund that are open for all enterprises (for-profit/non-profit) if they meet specific criteria.
  3. Money from the European Regional Development Fund is used to support SEs in Cyprus.
  4. In the future, funding from Cypriot state will be available to support SEs, as well as two incubators that support SEs for a period of three years.
  5. In the last few years some co-working spaces (e.g. Hub Nicosia) and incubators (e.g. the Centre for Entrepreneurial Development, Alliance and Research) were established and are now supporting SEs. Also, some awards and knowledge exchange centres exist.


In the Czech Republic actors of the Social and Solidarity Economy take the forms of (i) association; (ii) public benefit company; (iii) institute; foundation; (iv) church legal person; (v) social cooperative (and other cooperatives); (v) limited liability company. It has to be noted that the only legal forms which completely fulfils the EU operational definition of SE – i.e., the one provided in the 2011 SBI – is that of social cooperatives.

Civil Code 89/2012

Regulates non-profit entities (associations, institutes, and foundations)
  • § 118-209 establishes general rules on legal entities;
  • § 214–302 defines associations;
  • § 306-393 defines foundations;
  • § 402-411 defines the successor of the PBC legal forms, namely the institute;
  • § 3050 and 3080 deal with the abolishment of the act on PBC 248/1995 (see below);
It is important to point out that NPOs can generate income as part of their primary activity

Business Corporations Act 90/2012

Regulates cooperatives, social cooperatives, and limited liability companies.

Act on Public Benefit Companies 248/1995

DISCLAIMER: Please note that this law was abolished by § 3080 of the Civil Code 89/2012.
However, According to § 3050 of the same Law, while all PBCs should transfer into the legal forms of Institutes, Foundations or Endowment Funds, they are not obliged to do so and can keep their PBC status. Those which chose to do so, function internally according to the abolished legislation 248/1995. Created the legal form of Public Benefit Companies (PBC). The activities and aims reported in a PBC founding documents must provide “publicly beneficial services” under some predetermined conditions. The profits made must be reinvested in the provision of those services. They could earn income by charging fair prices for the services they provide as well as through donations.
It is to be pointed out that the meaning of “publicly beneficial services”, although not further specified by the law, has been identified by practice in a range of activities involving everything from environmental protection to social services to disadvantaged groups to restorations and cultural initiatives.

Act On Churches and Religious Communities 3/2002 (updated 495/2005)

This law regulates churches as legal persons.

Income Tax Act 586/1992 (updated 344/2013)

The law defines the narrow term of a “publicly beneficial tax-payer”, that is one whose primary activity is other than business activity. Except certain specific types of foundations, most types of non-profit entities fulfil the definition. Publicly beneficial taxpayers can reduce their tax base by up to 30%, with a maximum of about 40,000 EUR in total. The money saved have to be used for the non-profit’s activities within one year. It identifies which types of income are not part of the tax base (and are therefore exempted from taxes). 

Associations, foundations and churches are “narrow-range tax-payers” – meaning that income from individual types of primary activities resulting with a loss do not form part of a tax base.

PBCs and Institutes face a different tax regime. They are “wide-range tax-payers”, a category to which only a few specific tax exemption apply. They have to list all incomes in their tax statement. 

Donors are incentivised through a reduction in the tax base equivalent to 10% in the case of companies and 15% in the case of individuals through donations to publicly beneficial entities. Income tax reductions of 700-2,300 EUR are present for employers of people with health disabilities. 

Employment Act 435/2004

Requires companies with more than 25 employees to hire a fixed quota (4%) of people with disabilities and provides financial incengtives for doing so. 

Public Procurement Act 134/2016

Outlines the fact that public bodies are to give preference to qualitative ethical criteria in their tenders, rather than using lowest price criteria only. These include both social and environmental criteria as specified by the Resolution on Guidelines for the Application of Responsible Public Procurement Commissioning Applied by the Public Administration and Local Authorities (n. 531).

Financing and support measures

  1. Support for social enterprises, fundraising support in the Pardubice Region with funds between 400 and 8,000 EUR.
  2. Support programs from private banking institutions have been launched.
  3. Different organisation – e.g., P3 – support legal entities in the SSE in getting public procurement according the Act 134/2016. This support can take all kinds of different forms. 


The Danish “Act on Registered Social Enterprises” from 2014 has a definition of SEs which highly resembles that of the 2011 SBI. However, there are three main legal forms used in Denmark: (i) foundations, (ii) associations and (iii) limited liabilities companies. Companies operating under these frameworks receive fiscal advantages.

Act on Registered Social Enterprises (2014)

The act provides a legal definition of SEs in Denmark. Enterprises acting under this framework must pursue a primary objective that benefits society. Some requirements are the followings:

  • Most of their revenue must be acquired through commercial activity.
  • Public authorities must be excluded from the organisation.
  • SEs must use an inclusive and responsible governance. This means that they have to include different stakeholders in the decision making and manage the company in accordance with the social goals.
  • Profits must be reinvested or used for social objectives. However, a small share of profits can be distributed as dividends.

Law on Associations (456/2011)

According to law, associations can generate funds through donations but cannot raise equity investment. However, they can enter different joint ventures and get loans from banks. They are exempt from taxation and there is only very limited external accountancy. 

Law on Foundations (2014/1 LSF 47)

Foundations are allowed to accept donations, can obtain different kinds of loans, can enter different joint ventures, and they can postpone tax payments up to five years if they distribute donations.

Law on Limited Liability Companies (172/2010)

Limited Liability Companies can be financed by offering equity in the company in exchange for external investment, loans, and other forms of debt. Investors are not obliged to become members. If SEs chose this model, there is a possibility that social goals must be included and that only a certain amount of money can be disbursed to the shareholders. 

Financing and Support Measures

  1. Registered Social Enterprise (RSV tool): SEs registered with the RSV are potentially situated in a better market position (especially with municipalities) than conventional enterprises. 
  2. Collaboration with Social Housing Sector: The collaboration with SEs and the Social Housing Sector allows SEs to rent commercial premises in residential buildings below market price. 
  3. Benefits from different pilot programmes: Denmark aims to innovate its welfare system from time to time. In connection with this process, SEs benefit from various subsidies in the course of different pilot programmes.
  4. Social Capital Fund: The Ministry of Industry, Business and Financial Affairs distributes funds for enterprises that meet certain social goals.
  5. Danish Centre for Voluntary Effort: This Centre offers support measures for NPOs, some of them are also available to SEs.
  6. Social Capital Fund: This fund offers different kinds of financial support to SEs.
  7. Merkur Cooperative Bank: The bank is the largest provider of capital to SEs in Denmark and implements different EU projects. 
  8. Danish municipalities: A constantly changing landscape of different programmes offers support to SEs.
  9. Public procurement: Danish cities adapt more and more social responsibility principles in public procurement, which can help SEs to receive big contracts.


In Estonia, actors of the SSE take the legal forms of (i) Non-Profit Associations, (ii) Foundations, (iii) Private Limited Companies and (iv) Commercial Associations. However, no legal framework specific to SEs is present. 

Legislation of Non-Profit Association (1996, 42, 811)

Non-profit associations (NPAs) are voluntary organisations. Their main income should not be earned from business activities, rather it must be used to reach the association’s stated goals. Profit must not be distributed among the members.

If NPAs become notably successful, they can use economic activities as their main source of income. In general, they can use any form of economic activity and earn money, if the income is used to achieve the stated goals. NPAs also benefit from Income Tax facilitation.

Foundations Act (2010, 9, 41)

The Foundations Act stipulates that a foundation is a legal person in private law with no members. It is established to administer and use assets and incomes only to achieve the objectives specified in its Articles of Association. The supervisory board requires at least three members.

Foundations have to carry out an annual review of accounts. Investors cannot be incorporated in a foundation as they cannot receive dividends

Legislation of Private Limited Companies (1995, 26, 355)

The core competence of a private limited company is the sale of products or services. Social enterprises operate in this way by establishing their private societal aim and stating it in their Articles of Association. Benefits include the possibility for private limited companies to apply for start-up funding and participate in the development programmes offered by the governmental agency Enterprise Estonia.

Organisations with a revenue less than 40.000 EUR per year are exempted of VAT. If they engage volunteers in regular business activities, they have to pay taxes on the benefits volunteers receive. 

Act on Commercial Associations or Cooperatives (1995, 61, 1025)

The Good Cooperation Savings and Loans Associations are the only forms that SEs can use to operate under this act. They lend money to ecologically and socially responsible projects. The bank uses its finances, networks and technological skills to support individuals, enterprises and projects whose values and activities are in tune with their own principles. Its social purpose is stated in the Articles of Association. Due to its historically negative connotations, this form of cooperatives has not been greatly promoted in Estonia.

Income Tax Act (1999, 101, 903)

The Income Tax Act does not give benefits to organisations pursuing entrepreneurial activities. It only stipulates NPAs and foundations. NPAs and foundations operating for charitable purposes and in the public interest have to meet requirements of the Income Tax Act to be included and receive income tax incentives: (i) the organisation must operate in public interest; (ii) it can only pursue charitable purposes; (iii) it does not distribute assets or income; (iv) after the dissolution of the organisation, the remaining money must be transferred to another association; (v) administrative costs must reflect the activities; (vi) the payment of employees and management must be reasonable. Inclusion on the list enables NPAs and foundations to receive donations by legal entities, which can make tax-free donations of up to 10% of their previous year’s profit or up to 3% of their personnel costs during the current year to eligible NPAs and foundations. It also allows tax exemptions when reimbursing expenses such as transport, accommodation or catering costs to volunteers. Any type of enterprise that hires disadvantaged workers or working members benefits from indirect labour cost exemptions (e.g., social security costs) or employment subsidies. Also, there are some limited tax/fiscal benefits granted to individual donors who financially support social enterprises. 

Financing and Support Measures

  1. Enterprise Estonia: This foundation supports enterprises and implements EU programs. The foundation specifically focuses on regional entrepreneurship, tourism and creative enterprises. None of its measures are particularly designed for SEs. However, some of the programs may also apply for them. 
  2. NFCS is Estonia’s most important supporter of social enterprises. It only aids NPAs and foundations that benefit the public. The maximum grant amount is 12,000 EUR for nationwide organisations and 9,000 EUR for local organisations. Capital investments are supported once a year.
  3. Ajujaht is the biggest Estonian business idea competition and has a separate category for SEs. There are also some smaller competitions SEs can participate in.
  4. Estonia has different networks and associations, like NENO and ESEN, that provide support for SEs.
  5. The Good Deed Foundation’s Impact Fund is not only designed for SEs, but for all high-impact scalable enterprises and offers up to 500.000 EUR over a period of three years.
  6. Some banks (e.g. Swedbank) and foundations (e.g. Good Deed Foundation) provide further financial support for SEs. 


Finland has adopted a policy that treats SEs the same as any other enterprise or organisation regarding public support. They are entitled to use the same instruments as all other businesses and there is no particular SE legislation. 

Act on Social Enterprise (1351/2003 revised 924/2012)

This act limits SEs to work integration initiatives. Any legal form – non-profit association, foundation, cooperative and limited liability company – is eligible to register as a WISE if it meets the following social enterprise act’s criteria: (i) it is listed in the trade register; (ii) it pursues a social goal; (iii) it is a business that sells either goods or services; (iv) 30% of its workforce is either disabled or long-term unemployed; (v) all workers are paid accordingly.

Moreover, they may be granted public wage subsidies and, in some circumstances, an additional wage subsidy as compensation for employing people with reduced working ability and the resultant productivity shortfall.

Act on Non-Profit Welfare Associations and Foundations (487/2015)

According to this law, a non-profit welfare association can practice business activities determined within its specifications and others that are otherwise directly connected to its aims yet not economically significant. Non-profit welfare foundations can partake in business that is directly related to its activities and other business predetermined in its financial specifications that support its activities. If a corporate entity is an association or foundation promoting the public good, any revenue of commercial activity or income derived from real property is tax deductible.

Legislation of Cooperatives (421/2013)

Cooperatives are founded to promote the economic and business interest of their members through economic activity. They are not required to invest a minimum amount of capital, but they shall work towards the achievement of a common social goal as their main objective.

If a cooperative wishes to distribute surplus profit to its members, regulatory distribution-principles have to be followed. Any surplus is normally allocated to members primarily as service-users rather than as investors in direct proportion to their transactions with the cooperative.

Legislation of Limited Liability Companies (1351/2003 revised 924/2012)

Limited liability companies can be established in the sectors of social and health care, work integration initiatives, businesses development in rural areas, sustainable energy solutions, recycling, arts and culture, and social impact-oriented start-up companies promoting SDG. This type of organisation relies on models that enable the accumulation of wealth by a limited number of people, that do not have asset locks and that do not enforce any profit distribution constraints. 

Financing and Support Measures

  1. The Finnish Social Enterprise Mark (SEM): The SEM aims to differentiate SEs from traditional social service organisations and raise awareness of the SE business model. It is a stakeholder-driven label that is not legally regulated. An organisation’s eligibility for the label is dependent on three primary criteria and at least one of the secondary criteria. A WISE can be granted up to a maximum 75% of accepted start-up employment policy assistance and establishment costs for its anticipated set-up period. 
  2. My Enterprise Finland is supporting all start-ups in their growth with, for example, grants and business development aid.
  3. European Structural Funds are widely used to finance supporting measures in Finland.
  4. The Funding Centre for Social Welfare and Health Organisations (STEA) is the most significant funding operator for SEs in Finland.
  5. There are multiple networks, foundations and associations like ARVO, SOSTE, VATES Foundation and Coop Center Pellervo that support SEs along the way.
  6. In November 2018, the European Investment Fund (EIF) and Finnish bank Oma Säästöpankki Oyj signed the first guaranteed agreement for SE in Finland under the EU Programme for Employment and Social Innovation. Under this agreement the bank will support approximately 100 social enterprises with 10 million EUR in loans, focusing primarily on cooperatives that contribute to increased social and economic inclusion. 


In France SEs take the form of (i) associations, (ii) WISEs, (iii) cooperativesspecifically the three types of collective interest cooperatives or SCIC; cooperatives of activity and employment or CAE; and persons’ cooperatives – (iv) foundations, and (v) solidarity enterprises of social utility or ESUS.
It is crucial to point out that the High Commissioner for the SSE and social innovation, with a cabinet attached to the Ministry of Ecological and Solidarity Transition, was founded in 2017. 
The 2019 PACTE (Plan d’action pour la croissance et la transformation des entreprises – or Action plan for business growth and transformation) recognises “mission-driven enterprises”. 

Framework Law on Social and Solidarity Economy (2014)

This law is the most recent legal evolution and the main law concerning SEs. Here you find a summary of its main points: 
  • Article 1 describes SSE as a field;
  • Article 2 defines social utility as related to support persons in a situation of fragility, combat exclusion and inequalities, promote education in citizenship, social link, social cohesion and sustainable development;
  • It established the statuses of solidarity enterprise of social utility (ESUS) and “socially useful solidarity-based enterprise”. These can be adopted by all legal forms which pursue a specific social aim (see article 11 and article 2 of the law). They give access to specific financial and support schemes (e.g., solidarity finance);
  • To gain the status, a legal entity must meet specific criteria, the most important are: (i) democratic governance, (ii) search of a social utility, (iii) limited distribution of profit by statutory rules, (iv) existence of collective asset locks, (v) wage gap limited to 1 to 10;
  • The law recognises the status of “paid worker entrepreneur” which receives a fixed and a variable part of his wage from the coopérative d’activité et d’emploi (CAE);
  • Article 19.5 updates the SCIC legislation (see below), defining SCIC as commercial enterprises whose aim is produce/supply goods and services which have general interest and offer social benefits. The 57.5% asset lock minimum remained;
  • The Framework Law also increases the share of capital endowment which public representatives can own in SCIC from 20% to 50%;
  • The law promoted the adoption of socially responsible purchasing schemes for local authorities when the total annual amount of its purchases exceeds 90,000 EUR. This increased access to the public markets;
  • Finally, through a more precise definition, it amplified financing available for SSE organisations. They can benefit from higher financing devoted to projects characterised by social utility and legal changes which will allow mutuals’ investment into associations.

Law on Collective Interest Cooperative Societies (2001)

DISCLAIMER: This law was updated by the Framework law explained above!
This law introduced the category of société coopérative d’intérêt collectif (or SCIC), namely a legal entity (i) explicitly aimed at the pursue of social objectives, (ii) with a collective ownership, (iii) a multi-stakeholder governance, and (iv) an asset lock of minimum 57.5% of their profits.
The members must include at least three categories of people along with the SCIC’s (i) users and (ii) wage-earners. 

Ordinance No. 2015-899 of 23 July 2015 on public procurement

This law enables for the use of social criteria or social inclusion clauses for awarding public contracts. Moreover, it envisages reserved contracts for adapted companies for inclusion through activity.

Fiscal Directive (1998)

Defines the “lucrative” character of associations on which depends their taxation.
  • If no lucrative activities are carried out, then associations are liable to patrimonial (based on revenue) and wage tax.
  • If they are lucrative, then associations are subject to commercial taxes (e.g., corporation tax, VAT, and business tax).

Financing and Support Measures

  1. Foundations are not subject to VAT and corporation tax;
  1. Incentives for donations: 
    1. 66% of donations to foundations are deductible up to a limit of 20% of people’s taxable income. It is 75% if it is allocated towards free care, meal or housing for people in difficulty;
    2. Finance Act (2008) also gives tax incentives for donations;
    3. Law in favour of work, employment and purchasing power (TEPA – 2007)enable the deduction of 75% of the sums paid to public utility foundations, university foundations or partnership foundations for a maximum of 50,000 EUR from wealth tax;
  1. Most often policy and support schemes address specific types of contributions rather than the social economy and its actors per se;
  1. A substantial number of support entities – such as co-working spaces, networking, training, pre-start start support and similar – are present in France and can receive finds from ESF and ERDF;
  1. Caisse des Dépôts offers two support schemes for social investments: (i) funds of funds and (ii) NOVESS Fund;
  1. Socially oriented pension funds invest from 5 to 10 % of their funds into social economy enterprises or social funds;
  1. Social impact contracts: launched in 2016, they are issued by SEs and are aimed at encouraging investments into socially impactful action development. They are supported by the State Secretary in charge of SSE;


In Germany there is no legislation or legal form specifically dealings with SEs. Many organisation which might be considered SEs aspire to the “public benefit status” (available to all legal forms), while the associative form is still the most common one. 

The legal forms used in Germany include, but are not limited to, (i) registered associations (eingetragener Verein or e.V.),  (ii) foundations (Stiftungen), (iii) cooperatives (Genossenschaften) and (iv) LLCs.

Traditional associations (2600/2020)

Traditional associations were usually founded to practice ideal activities, but this legal form is now often used by its members for economic activities. They have, however, to split their books into an ideal and an entrepreneurial part. They have to work for the benefit of their members and have to fulfil a common benefit. A distinction can be made between ideological associations which hardly ever engage economically and common-benefit and philanthropic associations which are economically active. Most of them have a public benefit status.

Welfare organisations

Welfare organisations constitute the larges part of the German social economy. They often receive a large part of their budget from the state, which makes them “quasi-public service providers”. However, in the last years they introduced more and more economic activities and therefore are able to contribute their own share to the budget. They must spend all of their earnings to fulfil their social mission. For taxation purposes, they often create social enterprises, providing them with a beneficial status and a good environment.

Operational foundations (1483/1990)

Foundations are very common in Germany and most of them have a public-benefit status. They are mostly active in the fields of social services as well as education.

Cooperatives (2230/2006)

Cooperatives have been established to fight poverty and social exclusion of their members. Nowadays, most of them only follow commercial interests. They only are eligible as social cooperatives if they have a social mission.


There are two different forms of WISE in Germany. The first includes people with disabilities, which means they provide opportunities for people who cannot find a job on the “regular” job market. The second form caters to people with permanent labour market disadvantages. They have to spent all their earnings on their stated social goals.

Limited Liability Company Act (556/2013)

Since 2013 corporations acting under this law can gain the public-benefit status. This enables them to have more freedoms spending their revenues among other things. There is a legal procedure when aspiring the public-benefit status, and they are allowed to use abbreviation “gGmbH”. This status, however, is not a legal form and enterprises have to be re-accredited every third year.

Tax Law (2878/2007)

The tax law regulates the public benefit status (as defined by the LLC act) and introduces strict limits on profit distribution. As public benefit organisations count corporations, which act selfless, charitable or religious and support either society at large or certain groups. Organisations with public benefit status are not allowed to build up assets from their income, only from donations. They also must spend all surplus generated by their activities in a period of two years after. However, the status enables to collect tax-deductible donations and provides them with further tax reductions, e.g. reduced VAT rate.

Cooperative Act (2230/2006)

A revision of the act in 2006 widened the possible legal forms of cooperations, including more social and cultural goals for cooperatives. 

Financing and Support Measures

  1. Kreditanstalt für WiederaufbauThe “Kreditanstalt für Wiederaufbau” (KfW) provides start-up coaching and financial support for SEs. 
  1. Bundesministerium für Wirtschaft und Energie: The BMWi published 2017 a practitioners’ guide with practical advice and the most important players in the field.
  1. States: Bavaria, like many other states and cities, supports, co-financed by the European Social Fund, the start up of SEs with a maximum of 30,000 EUR as kick-start funding.
  1. EU funds, managed by German authorities, are used on different levels to support SEs.
  1. Networks: Many different networks and second-tier associations exist that provide support to SEs. SEND e.V., for example, operates as a less formal network that promotes SE.
  1. Competitions and awards: Different competitions like “start social”, “The German Sustainability Award”, and “Lighthouse” provide a further method of support and visibility for SEs. 
  1. Mikrokreditfonds Deutschland: Through a network of partners, loans up to 25,000 EUR are available to individuals.
  1. Deutsche Bundesstiftung Umwelt: The foundation provides financial support of maximum 70,000 EUR to SEs to initiatives working on sustainable goals.
  1. Welfare federations: Large welfare federations have their own banks which are the biggest players in providing loans for SEs. The loans are often coupled with financial advise.
  1. Private foundations, big corporations and donations: Foundations and corporations like Volkswagen and BASF finance a large part of German SEs. “Aktion Mensch”, a bundling framework for private donations, represents another big player in financing SEs.


In Greece, the social enterprise legislative context has been characterised by Law 4019/2011 on social cooperative enterprises (then updated by Law 2230/2016). Nevertheless, other legal forms such as EPEs, OE, and IKEs (see below) can be recognised as de facto social enterprises. 

Law 4019/2011

It established the Social Cooperative Enterprise (SCEs or KoinSEp) legal form which are further divided into: 
  1. SCE for Inclusion;
  2. SCE for Social Care;
  3. SCE for Collective/Productive purposes.
Furthermore, it created the National Registry of Social Economy under the Greek Ministry of Labour.
It is important to highlight that this legislation had a sectoral focus rather than a transectoral perspective of the social economy. Moreover, the overall aim of the legislation was on tackling unemployment rather than to prioritise “social aims”. 

Law 4430/2016

Introduced criteria for separating social enterprises from profit-oriented firms. It  defined SCEs as “civic cooperatives of Law 1667/1986 (see below), which have as fundamental aim the collective and social benefit […] and have ex lege entrepreneurial activity”. They are horizontally managed and can redistribute profits only to employees.
This means that the social enterprise legal form is disentangled from the SSE status making the latter accessible to a wider range of entities with respect to previous legislation (namely Law 4019/2011). This, in turn, implies that entities with different legal forms can be registered in the NRSSE if they meet a series of operational criteria. The operational criteria are the following: 
  1. Aims at social benefit defined based on the concepts of “sustainable development” and “social services of general interest”;
  2. Ensure the informed participation of member through democratic governance and apply the One member One vote principle;
  3. Ensures economic equity: max wage ≤ three time the minimum wage;
  4. Profit distribution constraints;
  5. Membership constraints.
SCEs are divided into two categories: 
(i) integration SCEs:
further divided into integration of (a) vulnerable groups (e.g., disabled people) with the requirement that 30% of members are from such group and (b) of special groups (e.g., refugees and victims of domestic violence), with the requirement that 50% of members and employees are from such group; 
(ii) Collective and social benefit SCEs:
Entities which carry out sustainable development activities and/or supply services of general interest. 
Moreover, the law launched the Special Secretary of Social and Solidarity Economy – i.e., an administrative body fostering SSE – under the Ministry of Labour.

Law 2716/99 on ‘Development and Modernisation of Mental Health Services’

Establishes the form of limited liability social cooperatives (KoiSPEs). Their membership is required by law to include at least three categories of stakeholders: (i) mental patients (>35%); (ii) mental health workers (<45%); (iii) individuals and other private or public entities (<20%). Each member shall have equal participation in decision-making

Laws 921/1979, 1541/1985, 2810/2000

These legislations deal with the legal status of Women’s agrotourism cooperatives. They produce products – e.g., jams, conserves and other traditional delicacies –, process farm products, cater, and handcraft products such as jewellery or carpets. Their profits cannot be redistributed and must go towards the expansion of the cooperative’s activities. They can register in the NRSSE but receive no incentives in doing so.

Law 1667/1986

Introduced civil cooperatives – i.e., associations with financial purpose that target economic, social and cultural development of their members. Profit distribution among members is allowed.

Law 3190/1955

Established EPEs – i.e., limited liability companies – and OEs – i.e., General Partnerships – as democratically governed entrepreneurial legal forms. 
  • EPEs: The law allows for individuals to run businesses democratically through an assembly of their members with the possibility to delegate the management to an external manager.
  • OEs: Each member has equal rights and responsibilities. 

Law 4072/2012

Introduced the legal type of IKEs – i.e., private companies – as a democratically governed entrepreneurial legal form. They are governed by a general assembly of members who do not have personal responsibility for the company. This makes the start-up procedures straightforward and inexpensive. 

Law 602/1915

Introduces Agricultural cooperatives. Their profits are redistributed to the members but the pursue of a social aim is not required by default. Nevertheless, they often include democratic and inclusive governance thanks to their cooperative nature. Important to notice that legal forms regulated by this law can be considered as social enterprises only if they include a social dimension and set profit distribution limits

Financing and Support Measures

  1. SCEs are exepted from paying (i) business tax; (ii) taxes on profits redistributed to employees; (iii) registration taxes
  2. Support Centre for Social Solidarity Economy: Envisions the creation of 15 centres in 2019 and 74 later on to operate as information points and advisory mechanisms for SSE entities. 
  3. According to Law 4430/2016, public social security institutions can lend parts of their property to  public and non-public actors including SSE organisations. The same is true for municipalities and regional governments under Law 4555/2018. 
  4. Public procurement for SSE entities is present. 
  5. Incubators, networks and support organisation are growing in number. 


There are no specific laws that govern SEs in Hungary and they can operate under various legal forms. These include but are not limited to foundations, social cooperatives, traditional cooperatives and conventional enterprises. The regulation happens through the applicable legislation and the public benefit status, which can lead to different fiscal advantages. The later status can be used by various legal forms. However, in many SEs different mixtures of legal forms are used and SEs often change their legal forms.

Foundations (5/2013)

Foundations can use economic activities (up to 60% of the income) to generate income. This, however, cannot be the primary objective of the foundation. Foundations have to pursue a legally defined long-term goal of public interest. Beneficiaries cannot include founders, members of the foundation and relatives of this group of people. Profits must be reinvested to reach the stated goals, after termination remaining assets can be distributed to founders and members but must not exceed the the value of their primary contribution. Surplus money will be given to other NPOs as stated in the founding document or, if not applicable, according to the National Cooperation Fund.

Associations (5/2013)

Associations can use economic activities (up to 60% of the income) to generate income. This, however, cannot be the primary objective of the association. Associations are established to realise the common and permanent goals of their members and must be founded by at least 10 people and all members must pay a membership fee. Profits must be reinvested to reach the stated goals, after termination remaining assets can be distributed to founders and members but must not exceed the the value of their primary contribution. Surplus money will be given to similar NPOs or to the National Cooperation Fund.

Non-profit companies (5/2013)

Non-profit companies are a special kind of business, that are allowed to perform economic activities on a supplementary basis. There is no social aim required, but they have to reinvest some parts of their profits to reach the core goals. The assets remaining in the company after termination can be distributed among the members according to their contribution to the companies capital.

Social cooperative (10/2016)

Social cooperatives are a mixture between business organisation and cooperatives, mainly focusing on economic activities while trying to create jobs for unemployed or disadvantaged people or improving their social status in other ways. At least seven members are needed to find a social cooperative and they have to be open to new members. Profits can be distributed, but at least 50% of the profits must be distributed according to the members personal contribution. It is also allowed to create a community fund that covers benefits for members and their families. In the case of dissolution, assets can be distributed among the members according to their financial contribution. The community fund must be transferred to a cooperative stated in the founding document or to a cooperative federation.

Traditional cooperative (141/2000)

Traditional cooperatives are business organisations with activities directed towards sales, productions and services. The social dimension is limited to benefits its members in various ways, but they are not conducting public benefit activities. At least 50% of the profits must be distributed according to the members personal contribution. It is also allowed to create a community fund that covers benefits for members and their families. In the case of dissolution, assets can be distributed among the members according to their financial contribution. The community fund must be transferred to a cooperative stated in the founding document or to a cooperative federation.

Conventional enterprise (4/2006)

This covers conventional enterprises that engage in economic activities. In general, there is no social objective needed, however, if companies want to pursue social goals, they have to be stated in their founding documents. Profits can be used freely.

Church organisation (100&206/2011)

In order to achieve the social goals, church organisations can be economically active, up to 60% of their total revenue. They have to create broad public services, accessible for everyone. However, they are ideologically committed and therefore not fully open. Profits have to be reinvested according to the social goals. 

Public benefit status (175&181/2011)

Since 2011, the public benefit status only is applicable when public functions are performed. Furthermore, the organisation has to be registered in Hungary and must be operating under a legal status that allows them to acquire the public benefit status. Organisation like these, are not allowed to make profits and must carry out a public function, similar to the activities of e.g. a municipality. They also have to show that they have enough resources to execute the task and enough public support.

Act on the Transparency of Organisations Receiving Support from Abroad (76/2017)

Organisations in Hungary with financial support from abroad that exceeds EUR 22.200 (excluding EU grants) must register and communicating as receiving as an organisation receiving support from abroad”. Furthermore, there have been more legislations introduced, that hinder the work of SEs.

Value Added Tax Act (127/2007)

Associations and Foundations not only get tax benefits that businesses receive, but they also receive exemptions and advantages for further activities and certain kinds of cost. 

Corporate Tax and Dividend Tax Act (81/1996)

Social cooperatives can be excluded from paying corporate tax and can also access 6.5% of the community fund as tax benefit. 

Financing and Support Measures

  1. Membership work
Members of social cooperatives can establish a sui generis type of employment relationship, that allows them to collect wages in cash with 15% income tax and 10% pension contributions paid. 
  1. Development and support organisations
There are different organisations like SEED, Ashoka and NESsT that support SEs in various sectors and provide them with (financial) resources.
  1. Support from Banks and auditors
Erste Bank, UniCredit and many more offer financial and professional support, as well as incubator and different programs to SEs. They also offer proffered loans to SEs. KPMG and other auditors offer pro bono consultancy work to SEs. 
  1. State support
NPOs can request statutory state support from the central budget if they carry out certain public functions. In general, organisations can claim statuary support for costs incurred in connection with the public function. 
  1. People with disadvantages and disabilities
In the realm of work integration, organisations can apply for subsidies from the central budget in order to employ people with singular or multiple disadvantages and disabilities. 
  1. EU grants
EU funding is a large part of the Hungarian SE funding landscape. However, many calls in Hungary only apply to big organisations and cannot be accessed by local SEs.
  1. Promotion of Social Enterprises
This program is currently the largest source of financial resources for Hungarian SEs with up to EUR 774.000. 
  1. Networks
There are several SE support networks like SzoSzöv that support SEs in Hungary in several ways.


There is no specific SE law in Ireland. However, there are some suitable laws that apply to all companies but can be used for SEs as well. Moreover, SSE actors benefit from a wide range of fiscal as well as taxation benefits. 

More than 90% of all SEs in Ireland take the form of CLGs which does not make any demarcate regarding public interest/benefit.

Companies Act 1963-2013 - Companies Limited by Guarantee (CLG)

Legal form of almost all social enterprises (91% of the total).  A company limited by guarantee does not have share capital and, therefore, can be used as the legal form for a not-for-profit organisation among other things. There are no shares, no distribution of dividends on share capital and no requirement to allocate surpluses to compulsory legal reserve funds. It was amended by the new companies act of 2014.

New Companies Act 2014 introduced on 1 June 2015

It entails different requirements on CLGs to include a Directors’ Compliance Statement in the Report of the Directors in the CLG’s financial statements.

Tax Consolidation Act 1997

Section 847A: Provides for a scheme of tax relief for relevant donations to an approved sports body for the funding of approved projects. No project can be approved which is estimated to cost in excess of 40 million EUR. The initiative applies only to “a body established and existing for the sole purpose of promoting an athletic or amateur game or sport whose income is exempt from income/corporation tax”. These can include SEs.
Section 848A: Provides for a scheme of tax relief for certain eligible charities and other approved bodies which can include SEs. An “eligible charity” means any charity that is authorised in writing by the Revenue Commissioners.

Financing and Support Measures

  1. Social Enterprise Grant Scheme
  • Support scheme specifically targeted at social enterprises – here defined as businesses that generate traded income with social outputs, and in which all profit is reinvested into the business. It provides around 45,000 EUR of flexible grants.
  1. Social Enterprise Development Fund 2018-2020
  • 1.6 million EUR fund which was delivered over a two year stretch. It is funded by national and local funds, as well as philanthropic and private funds. 
  1. Microfinance Ireland (MFI)
  • Not-for-profit lender established to deliver the Government’s Microenterprise Loan Fund. It benefits from a guarantee scheme under EASI, which increases the availability – and accessibility – of micro-financing.
  1. Social Enterprise Measure of the Dormant Account Fund (DAF)
  • Fund established by the Irish Government to distribute unclaimed funds, from accounts in credit institutions, to be used in support of a range of social and economic development initiatives (such as the personal and social development the economically or socially disadvantaged)
  1. Startup Refunds for Entrepreneurs (SURE)
  • Tax relief incentive scheme targeted at those interested in starting their own company and applying to tax paid over the 6 years prior to year in which the investment is made.
  1. Employment Investment Incentive (EII)
  • The scheme allows an individual investor to obtain income tax relief on investments for shares in certain companies up to a maximum of 150,000 EUR per annum in each tax year up to 2020, and up to 40% in these investments. The aim is to enable companies to raise finance for the purpose of expansion, create and/or retain jobs
  1. Wage Subsidy Scheme
  • Provides financial incentives to WISEs to employ disabled people who work more than 20 hours per week.
  1. Support programmes available to all enterprises – e.g. Rural Development Programme, LEADER (LDC);Enterprise Ireland, New Frontiers Entrepreneur Development Programme; Local Enterprise Offices (LEOs).


SEs have a longstanding history in Italy. In 1991, a first law dedicated to SEs was put in place. This law has helped the growth of the sector and led it to become a flourishing part of Italy’s economy. In new legislations, such as 155/2006 and 2016/2017, a general framework were introduced for the third sector of the economy.

Law 106/2016 and Legislative Decrees 117/2017 and 112/2017 on “the Reform of the Third sector, social enterprise and universal civil service”

This legislation aimed at reforming the third sector with a common framework to overcome its fragmentation (also in terms of fiscal advantages). It defines the meaning of “non-lucrative” and“general interest”, safeguarding the non-lucrative mission of SEs.

Established SEs are now allowed to distribute up to 50% of the profits generated in a year to investors (or donate them to other third-sector organisations), while at least 50% of the profits generated must be reinvested the SE and the assets must remain locked. Encourages the adoption of a more inclusive governance model for SEs. 

It recognises tax exemption for non-distributed profits and it introduces other targeted measures aimed at attracting investments (The most important one is the possibility offered to individual taxpayers to deduct from their tax payroll 30% of the capital invested  in new social enterprises, provided that this risk capital is maintained for at least 5 years up to a maximum amount of one million EUR).

Law 118/2005 and Legislative Decree 155/2006 on “Social Enterprise”

Introduced the legal category of “social enterprise”. Regardless of its legal form, an organisation can be regarded as social enterprise if: 
  • It is a private legal entity;
  • It engages in the regular production and exchange of goods and services having “social utility” (i.e., it engages in one or more of the entitled sectors specified by the same law) and seeking to achieve a public benefit purpose rather than to generate a profit.
    An organisation is considered a social enterprise if it generates at least 70% of its income from entrepreneurial activities
    (i.e., production and exchange of goods and services having social utility);
  • It is allowed to make a profit, but it cannot distribute it to its members or owners (non-distribution constraint). All profits have to be reinvested to further the SEs main statutory (public benefit) goal or to increase its assets, which are fully locked;
  • It is registered in the Social Enterprise Section of the Register of Enterprises managed by the Chamber of Commerce;
  • It publishes both its financial and social balance sheets.
Lack of fiscal advantages for SEs. In particular, they are subject to the payment of corporate tax, VAT, IRAP and social security costs just as any other enterprise.

Law 381/1991 on "Social Cooperatives"

  • Acknowledged a new cooperative form explicitly aimed at pursuing the general interest of the community. Social cooperatives are subject to the laws of the fields they operate in. 30% of their employed people must be from “disadvantaged” groups. 
  • They have the right of up to 25% reduction with regard to loans aimed at buying real estate for the working of the cooperative. 
  • Social cooperatives are exempted from the payment of Corporate tax (on 97% of non-distributed profits), social security contributions (reducing the cost of labour by about 20% to 25% depending on the sector of activity), inheritance tax, and enjoy a reduced VAT to 5% (from standard 22% in Italy).
  • Italian regions must dedicate to the promotion and development of social cooperatives. 

Law 142 and Law 241 of 1990

Offered municipalities willing to provide new social services the option to choose among different modalities, including the possibility of entrusting the delivery of services to private providers.

Financing and Support Measures

  1. Ministry of Economic Development’s Decree July 3rd 2015:
Support scheme dedicated to promoting the growth and strength of the social economy. It addresses legal entities defined by Law 118/2005 and Legislative Decree 155/2006; and Law 381/1991. It is financed through 223 million EUR and is managed by Invitalia.
  1. Start-up innovative a vocazione sociale – SIAVSs:
Support measures to innovative star-ups not targeted exclusively at the social economy. Beneficiary enterprises must pursue explicit general interest aims, provide evidence of the social impact generated and register in a special company register for innovative social start-ups. Innovative social start-ups are entitled to fiscal benefits that are more advantageous than those already awarded to innovative start-ups.
  1. Marcora Law (Law 49/1985):
Provides for a blending of self-financing and financing mechanisms specifically for cooperatives through the creation of two funds aimed at promoting and securing levels of employment in times of crisis, and for the conversion of businesses in crisis into worker cooperatives. The two funds are: Banca Nazionale del Lavoro; and Cooperazione Finanza Impresa


In Latvia there have historically been various legal forms which could be regarded as SEs – e.g., associations, foundations, LLCs. However, after the SE law came into force, only LLCs could be regarded as de jure social enterprises. Associations and foundations can continue to operate as de facto social enterprises but cannot have the SE legal status. 

Social Enterprise Law (2017)

The law defines SEs as limited liability companies with special social enterprise status. To gain this status, SEs need to:
  1. Produce positive social aim as the main purpose;
  2. Restrictions on profit distribution to company owners – need to invest the profits back into the company or towards its social aim;
  3. Have a representative of the target group (or from a foundation/association representing it) in the executive or representative body of the company.
SEs objectives may work towards (i) the integration of people at risk of social exclusion; (ii) education; (iii) environmental protection;(iv) the protection of cultural diversity; (v) social and health care or (vi) civil society. 
SEs’ actions towards certain social groups can take the forms of (i) engaging social groups in employment; (ii) integrate social groups into society through economic activities; (iii) providing material and psychological support to social groups;(iv) educating social groups; (v) promoting activities aimed at improving the quality of life of the social group. 
It enable for support mechanisms such as volunteer involvement, tax reductions, access to EU funds, use of municipal properties for free, and special financial and support schemes. 

Constitution of the Republic of Latvia

The constitutions provides that the Latvian state is socially responsible – i.e., to ensure decent standards of living and social protection, to promote social justice, equality, and solidarity.

Commercial Law (2002)

This law effectively replaced the Law on Non-Profit Organisations. After the commercial law was passed, NPOs had to re-register as associations or lose their NPO status – i.e., become a conventional enterprise. 
It is important to point out that SEs need to follow the commercial law as a regular LLC, writing an annual report on their impact. 

Associations and Foundations Law (2003)

Defined NPOs as a legal form. In order to be considered as such an organisation has to have at least 4 members, a board, a manifesto and clear mission. The law demarcates political – regulated by other laws – organisations from associations and foundations. Moreover, this law granted associations and foundations the right to conduct revenue-generating transactions, but only as an auxiliary activity, not as their main one.

Public Benefit Organisation Law (2004)

Public benefit organisations are defined by this law as those conducting activities which significantly benefit parts of society (especially in the forms of charity; human and individual rights protection; development of a more civic society; promotion of education, science and culture; environmental protection; disease prevention and public health; raising standards of living of least protected groups). Associations and foundations can gain the PBO status if they insert public benefit goals in their statutes and constitutions. Public benefit companies are exempted from paying income tax.

Enterprise Income Tax Law (Amended 2018)

According to this law, if the main aim of an association is not to maximise profits, then it need not to pay income tax. On the other side, LLCs which have the social enterprise status are exempt from income tax if profits are reinvested in the SE or towards its social goal. 

Some activities of SEs – e.g., recreational and social inclusion activities; integration activities in the labour market; asset purchase for achieving the statute’s goal; donations to Public benefit Companies – are completely exempted from taxes.

Financial and Support measures

      1. “Support for social entrepreneurship” (2015-2022): it developed from the ESF and it aims at offering financial grants (between 5,000 EUR and 200,000 EUR)towards the development of SEs in Latvia. It is managed by ALTUM and the Ministry of Welfare. It is important to specify that ALTUM is a development agency owned by the state which operates many different European funds and runs 10-20 different programs
      1. The Investment and Development Agency of Latvia provides investment and financing support such as incubators and support services. Moreover, ALTUM provides microcredit and start-up programmes for SMEs and SEs. 
      2. VAT Law: The law states that VAT is not applied to social service providers such as social care, professional and social rehabilitation, social assistance and social work services.
      3. It includes associations, foundations, SEs as defined by the SE Law, and conventional companies. If annual turnover from economic activity is less than 40,000 EUR, then the legal entity does not have to register as a VAT payer.
      4. Law on Enterprise Income Tax Relief for Companies of Association of Disabled, of Medicine-related Foundations and of other Charity Foundations: makes income tax relief available for LLC established by associations/foundations, and specifically to those owned by associations of people with disabilities and medicine-related foundations. 
      5. Public Procurement Law: provide privileged contracts to companies in which 30% of the total average number of employees are people with disabilities. 
      6. Also, according to other laws as well, employers can get some reductions in the social insurance contributions of people with disabilities
      7. Law on Immovable propriety: if municipal immovable property is rented to provide medial or social care services then tax relief can be granted. 


In the Lithuanian legal framework the EU definition of SEs is met by: WISEs and public enterprises, as well as associations and foundations that create income via the market. Furthermore, there is a specific law for SEs introduced in 2004. 

Legislation of Work integration social enterprises (IX-2251/2004)

This law demarcated WISEs into (i)  organisations that employ at least 40% of people belonging to a disadvantaged group and (ii) organisations that employ at least 50% people with disabilities.

Organisation wanting to achieve this status need a business plan, financial accountability and economic stability. Most organisations adopt the form of shareholder companies (limited liability enterprises).

Associations (since 2004) and public enterprises (since 2015) are not allowed to become WISEs, motivating conventional businesses to convert. The founding documents of the organisation aiming to gain WISE status must also include a mission and a vision about the employment of disadvantaged people.

Restrictions on what economic activities are allowed for WISE enterprises are also present in the law.

Legislation of Public Enterprises, Associations and Foundations (1428/1996; 1969/2004; 1232/1996)

Despite the different laws, all three legal forms use the same framework to operate.

  • Public enterprises is a form of legal entity with limited civil liability trying to satisfy the needs of the public. The form is very handy for non-profit organisations and often used by SEs.
  • Associations are legal organisations with limited civil liability pursuing their members interest or a general-interest goal.
  • Foundations is a form of legal entity with limited civil liability. They provide donations or sponsorship to different entities.

The social dimension is part of all of these forms for SEs. Associations and foundations are solely focused on the social aim. An entrepreneurial aspect is not needed and they are allowed to make profits, if they reinvest 100% in the organisation again. They also have to provide financial and activity reports, information about their founders and information about their governance to the government. 

Conception of Social Business (4-207/2015)

A SE in Lithuania must involve the aspects of entrepreneurship, social responsibility and good governance. Furthermore, it has to be directly linked to permanent economic activity. It  must meet four goals:

  1.  Must be economically active and simultaneously aiming for positive social impact;
  2. Profit must be reinvested to reach the stated goals;
  3. Must be managed sustainable and transparent by all stakeholders;
  4. Must be independent from any state actors.

There are many legal forms and business models that can be used to establish SEs. 

Amendment to Conception of Social Business (4-533/2016)

The idea behind this amendment is to distinguish between traditional enterprises, NPOs and SEs. It provides that, in order to be accepted as an SEs, NPOs must (i) generate at least 50% of their income by business activities; (ii) create jobs and pay their employees a fair salary; (iii) focus on marginalised individuals; (iv) keep society and nature in mind; (v)  create benefits in dedicated areas; (vi) reinvest more than 50% of their profits for their social purpose; (vii) be transparent about earning and reinvestment decisions; and (viii) be independent from state authorities. 

Law on Profit Tax (IX-675/2001, amended in 2013)

Public enterprises, associations and foundations with an income from economic activities below 300.000 EUR have to pay zero tax for the first 7.250 EUR of taxable profit. The remaining parts of the profit are taxed at 15%.

Revenues that are reinvested to meet the social goals are not considered taxable income. 

Law on Value Added Tax (IX-751/2002)

No value added tax must be paid for revenues resulting from the public benefit activities of the SE.

Law on State and Municipal Property Management, Use and Disposal (VIII-729/1998, amended in 2013)

SEs can use state properties free of charge on the base of a temporary-lease, when they use the premises to reach their social goals. 

Financing and Support Measures

  1. Guideline for SE projects
The Ministry of Agriculture developed a guideline that gives advice to SEs on how to implement projects and apply for funding. This guideline also added the phrase “community enterprise” to the legal framework, meaning an organisation that is founded by a community to help them to achieve their goals. This includes an external model, an integrated model and an embedded model. 
  1. Funding
Donations and voluntary work falls under specific rules and has benefits for all parties involved. Furthermore, there are plenty of favourable frameworks in the areas of tax exemption and labour law that SEs can benefit from.
  1. Financing
State programmes, EU Structural Funds and international programmes are the three main sources of income for SEs in Lithuania. 
  1. Support measures 
There are 23 support programmes for SMEs which also can be used by SEs if they have a sustainable economic dimension or if they are able to co-finance some actions. Most programmes require them to be a shareholder enterprise or an individual enterprise. Furthermore, there are some measures meant for NPOs that SEs can profit from too. 
  1. SE support measures
Currently, only three support measures are tailored for SEs. This includes state aides for WISEs, a programme that supports the development of SEs in rural areas as well as the ESF programme.
  1. Public procurement
There are some elements that benefit SEs, especially WISEs, when it comes to public procurement as well as public-private partnerships including concession, investment partnerships, and mixed capital companies that can help SEs.
  1. Networks
There are WISE and SE networks that represent one of the two forms supporting SEs as well as umbrella organisations, especially for NPOs, and local networks that not only support SEs but also the people.
  1. Support
The “Business Consultancy Network” helps SEs in their early phase and supports them in their growth. “CollaborationCentres” act as incubators and accelerators and connect SEs with each other and with other companies. 23 “Businessinformation centres” give SEs advice in various fields and support them wherever they need help.


In Luxembourg, only SIS are officially recognised as part of the SSE. Nevertheless, an additional four organisational types can be recognised in (i) associations; (ii) cooperatives; (iii) mutual societies; (iv) foundations. Legislation concerning these four legal types seems to be outdated and, depending on the case, either too strict or to wide. 
It is important to point out the existence of the Ministry of Solidarity Economy in Luxembourg which also has a Department on SSE. 

Law on Societal Impact Enterprises of 12 December 2016

This law establishes the legal form of Societal Impact Enterprises (SIS or Sociétés d’impact sociétal)) – i.e., officially the only entity operating in the SSE in Luxembourg. SIS are legal persons governed by private law which must possess four criteria:
  1. Produce and distribute goods/services;
  2. Support fragile individuals or the achievement of a goal through their activity;
  3. Be managed autonomously;
  4. Reinvest at least half of the profits in the company – i.e., their capital must at all time be composed of at least 50% of “impact shares”.

Moreover, profit redistribution (of the “profit shares”) is dependent on previous verification that the social goal has been achieved by checking performance indicators. 

The SIS accreditation can be given to organisations which follows under the legal forms of (i) public limited liability companies operating as SAs; (ii) private limited liability companies operating as SARLs; (iii) cooperatives. It also enables associations to pursue economic activities through a subsidiary company which can then be accredited under some specific conditions.

Further, this law defines the SSE as a “mode of doing business”. Still, SIS are exempted from paying corporate income tax, municipal business tax and net wealth tax, while donations to SIS are deductible as special expenses. 

Law of April 21st 1928

Non-profit associations are defined by this law as organisations which do not take on industrial/commercial activities and do not seek to provide profit for their members (Article 1). They must have a democratic governance (Article 7), and are most often funded directly by the stateNothing requires an association to target its activities towards the benefit of its members. Please note that some de facto associations are not counted in the official figures due to the fact that they engage in economic activities. 
Moreover, this law also regulates foundations (Article 27 ff.) which are defined as organisations which carry out philanthropic, religious, scientific, social, artistic, pedagogic, sports or touristic activities. They are governed by a board of directors and must be registered in the Register of Business and Companies. 

Law on Commercial Companies of August 10th 1915

Defines cooperatives as organisations whose shareholders and subscribed capital is variable. Their shares are not transferable to third parties. The provision of equal voting rights might apply in specific conditions. Moreover, cooperatives are subject to all taxes that conventional enterprises pay. Please note that some regular companies are able to register as cooperatives under this law. 

Law of July 7th 1961 (Updated by Law of August 1st 2019)

It defines mutual societies (sociétés de secours mutuel) and lists their purpose as supporting standardly recognised activities such as health, unemployment, etc. They must apply for administrative approval and are prohibited from the use of fees for anything other than their statutory purposes. The update introduces the principle of “one person, one vote”. 

Financing and Support Measures

  1. Since 2017, there is the availability of a simplified legal form with the SARL-S which can be adopted more easily and requires only one shareholder. 
  2. Financial support from the National Society for Credit and Investment (Société Nationale de Crédit et d’Investissement) for SIS. This is a public law banking institution with a focus in medium/long-term financing.
  3. Generous public funding are available in Luxembourg for all SSE actors, especially in the non-profit sector. While some are more general programmes, others are specifically aimed at one issue or legal form. Entities accessing the latter must meet some entry requirements. 
  4. EU funds, especially the ESF, play a big role in Luxembourg.
  5. Article 42 of the Public Procurement Act provides for the inclusion of social and environmental considerations.


No Social Enterprise specific legal form or status exists in Malta. Rather, de facto social enterprises mainly take the form of (i) voluntary organisations or (ii) cooperatives both of which are regulated by specific acts to be found in Chapter 492 of the Laws of Malta. Moreover, a White Paper on the Social Enterprise act envisions a legal framework in which the social economy can be recognised and flourish. 

Voluntary Organisation Act XXII (2007)

This legislations deals with the regulation of voluntary organisations in Malta, namely non-profits organisations with a social aim. They shall not be established for trading purposes nor to promote the interest of a commercial enterprise nor engage in trade as its principal activity (Article 38(1)) and must have an explicit social aim outlined in their statue. Nevertheless, VOs can conduct trading activities as secondary activities and still be considered a non-profit. Moreover, Article 38(4) outlines some activities which VOs can perform to achieve its objectives which are not legally seen as trading activities as well as entering public contracts and partnerships. Furthermore, Article 38(6) deals with cases in which there is doubt about a trading/non-trading activity, stating that “a ruling on whether any activity is a trading activity or not for the purposes of this article shall be given by the Commissioner on the application of any interested party and his decision shall be subject to appeal to the Board of Appeal”. They must be independent from local and central governments and must implement democratic governance measuresThe taxability of their income depends mainly on their “certificate of enrolment” which is a document determining a VO’s fiscal status.

Cooperative Societies Act XXX (2001)

Cooperatives can perform economic activities and generate profits which must go towards the promotion of the interests of the organisation’s members (mainly as consumers or workers, rather than as investors). A primary social aim is not required to be registered as a cooperative and no law explicitly deals with social cooperatives. They face clear limits in the distribution of profits: they are obliged to transfer at least 20% of surplus to a reserve fund as well as to contribute 5% of profits to the Central Cooperative Fund (to be used to “further cooperative education, training, research, and for the general development of the cooperative movement in Malta and for other purposes as may be stipulated in CCF regulations”). They are jointly owned and democratically controlled enterprises, and this makes their decision-making processes determined by members in accordance with cooperative principles. 

Financing and Support Measures

  1. All VOs with an income lower than 10,000 EUR enjoy an exemption from paying taxes.
  2. Cooperatives are exempted from paying income tax (Income tax Act 19488).
  3. Start-up support and low interest rate loans for start-ups programmes (e.g., Business START, Soft Loans, LEAP2ENTERPRISE) are available to all Maltese enterprises which fulfil specific criteria.
  4. EU funding and projects (e.g., SOS Malta, EVA, KKG) play a crucial role in Malta SSE ecosystem.
  5. Maltese banks, Microfinance institutions, crowdfunding, the CCF, and network financing are the main suppliers of finances.


In the Netherlands no specific legal form exists for social enterprises. SSE actors usually take the forms of (i)Associations; (ii) Foundations; (iii) Cooperatives; (iv) Private companies with limited liability; (v) Public limited companies or stock corporations. All these legal persons, with the exception of limited liability companies and cooperatives, can apply for the public benefit status which yield specific tax advantages (See Financing and Support measure section).

Dutch Civil Code

Title 2.1 gives General provision concerning legal persons 
Title 2.2 deals with Associations
They are defined as “legal person with members, pursuing a particular purpose which is different from the purpose [ofcooperatives]” and have the obligation to not distribute profits among its members (Article 2:26). 
Principles of democratic governance such as one member one vote must be followed (Article 2:38 and 2:39). All Associations are registered in the Commercial register (Article 2:29).
Title 2.3 deals with Cooperatives:
They are defined as associations which “must have the purpose (objective) to provide for certain material needs of its members on the basis of contracts […] concluded with those members in the course of its business, which it conducts […]for the benefit of its members”. Nevertheless, a cooperative may “conclude the same kind of agreements with non-members […]” according to its founding documents (Article 2:53).
Cooperatives must follow rules similar to those of associations (e.g., democratic governance principles) but they do not follow any profit distribution requirements (Article 2:54a(1)). Large cooperative have somewhat different rules concerning the role of their supervisory board (section 2.3.2). 
Titles 2.4 and 2.5 deal with Private and Public limited liability companies
Title 2.6 deals with Foundations
They are defined as “legal person[s] formed by means of a juridical act, that has no members, and that intents to realise an objective (purpose), mentioned in its articles of incorporation, by using capital (property) which has been brought in for this purpose”. However the objectives “may not include the making of distributions to its founders […] or to others, except […] when these distributions are made for charitable (philanthropic) or social purposes”.
All foundations must be registered on the Commercial Register. 

Public Procurement Act (2012)

ARTICLES 2.82 and 2.82a:
Provides for the award of a contract outside of the regular procurement procedure for enterprises with more than 30% of employees having work limitations. This is known as a “reserved contract” and cannot extend a period of three years.
Reserved contracts can also be acquired by organisation which meet the following criteria: (i) mission towards the achievement of societally relevant tasks; (ii) reinvest profits towards the organisation’s mission; (iii) the organisation’s management is based on employee share ownership and/or participation principles; (iv) the contracting authority has not awarded the same contract in the three prior years. 

Financing and Support Measures

  1. Associations and foundations meeting the public benefit status experience deductions from corporation tax, VAT, inheritance tax or gift tax 
  2. Donations to organisations with public benefit status are incentivised through the possibility for the donor to deduct the donation from its taxable income up to 10% of its total. 
  3. For LLC deductions are present for the self-employed and start-ups. 
  4. Cooperatives are exempt from the payment of the dividend tax
  5. Many funds and financing programs such as the Dutch Good Growth Fund (DGGF), GO-ETFF, Innovation Credit, and ISDE are available for all enterprises with a specific mission. Also, social enterprises specific programs such as the Support for social enterprise in Amsterdam, Subside for sustainable initiatives, and others are present.
  6. European Funds such as ESF, EaSI and Horizon also play an important role in the Netherlands
  7. A wide variety of informal investors is also available in the Netherlands. 


In Poland, SEs mainly take the forms of (i) social cooperatives, (ii) entrepreneurial non-profit organisations (ENPOs), (iii) professional activity establishments (ZAZs), and (iv) non-profit companies. Each of these is regulated by its specific legislation (see below).

More general legislation on Social Enterprises is on the waythe first two proposals are alternatives: at the moment the KPRES is taken to be the fundamental document for policy schemes because the Act is still only a draft.

National Programme for Social Economy Development (KPRES) 2014-2018 (extended to 2018-2023)

KPRES 2018-2023 is the most significant source regulating social enterprises in Poland and it envisages the introduction of a social enterprise status. Under KPRES 2014-2018 the adoption of a comprehensive Act on Social Enterprise and Support of the Social Economy was expected but failed to pass. Passing this act is a priority for the KPRES 2018-2023 as well.

Draft Act on Social and Solidarity Economy (2017)

Launched in 2017, this law would regulate all specific issues linked to social enterprise. It defines a SE as an entity that performs economic activities, including paid statutory activity and/or market activity, and which satisfies some criteria – regardless of its legal form. The most important criteria are:
  1. It must provide services of either social and professional integration of groups threatened by social exclusion or in the field of local development, as its basic fields of activity;
  2. Profit distribution constraint – reinvest at least 30% of profit in social and professional (re)integration or activities aiming at public benefit;
  3. Have a democratic governance.

The SE label would be assigned by the local governments. It is important to point out that a SE label has been introduced de facto but not de jure

Act of 2003 on Public Benefit and Volunteer Work

ARTICLE 8 established the category of paid mission-related activity – i.e., operations considered to be public, for which remuneration has to be paid, which are part of the goals pursued by a non-profit. Income generated by these activities shall be put towards the pursue of public interests. 
Paid mission-related activities can be seen as business activity if: (i) the remuneration of sales exceeds that from the costs of businesses; (ii) remuneration of employed individuals exceeds three times the average monthly remuneration in the enterprise sector.
ARTICLE 3: Donations to non-profits can be excluded from income before it is taxed. However, according to the Law on income tax from natural (and legal) persons, the donation shall not exeed 6% of income of natural persons or 10% of legal persons.
ARTICLE 24 and 27: Some organisations can apply fo the Public Benefit status. They do not have to pay corporate income tax; property tax; tax on civil law transactions; stamp duty; court fees in relation to public benefit work performed by such organisation. Moreover, they can receive funds which are donated from “a 1 % scheme”
These three laws – on Association, on Foundation and on Public Benefit and Volunteering – create the basic framework in which Entrepreneurial Non-Profit Organisation carry out economic activities. 

Act of 2003 on Social Employment

This law firstly recognised Social Cooperatives and it introduced professional activation in labour cooperatives of people threatened by social exclusion. Social Coops benefit from exemptions from paying social security for 12 months. 

This act also enables for supported employment – i.e., a form of employment addressing people who have difficulties getting into the labour market. It incentivises companies to hire them through a system of benefits in the form of reimbursement of part of their salaries (financed by the Labour Fund). 

Act of 2004 on Promotion of Employment and Labour Market Institution

  • Amended the Cooperative Law Act of 1982.
  • Up untill here – together with the June 2003 Act on Social employment – social cooperaives were seen as relating to work integration only (i.e., only understood in the context of WISEs)

Act of 2006 on Social Cooperatives

  • This law regulated social cooperatives treating them as a separate legal entity. 
    Article 12 of this act provides for employment costs support – in the form of contributions to retirement, health and disability pension and accident insurances – financed by public institutions. The county local government covers all these costs during the first 25 months and half for the following 12 months using funds from the Labour Fund.

Act of 1989 on Association

Article 34 enables association to engage in economic activity (in the ways explained by the 2004 Act on the Freedom of Economic Activity). Nevertheless, profits gained shall not be distributed to members, and shall go to the aim of achieving the association’s statutory goals. 

Law of 1992 on Income Tax from Legal Persons

This legislations grants tax exemption to social cooperatives, ENPOs and organisations managing ZAZs.
  • Social Cooperatives: Exemption if income is spent towards the social/work integration of its members.
  • Entrepreneurial non-profit organisations: Exemption if income devoted to statutory goals – and which ought to be connected to specific activities. Nevertheless, if their income comes from the selling of electronic equipment, fuels, tobacco products and alcoholic beverages, and precious metals, they cannot get these exemptions.

Act of 27 August 1997

ARTICLE 31: ZAZs are exempted from all taxes excluding: gambling tax, value added tax, duty tax, excise duty, income tax and means of transportation tax. They are partially exempted from real estate tax, agricultural tax, forestry tax and civil law activity tax. 90% of the money saved from these exemptions and reductions must go to a company’s fund for the rehabilitation of disabled people. The remaining 10% shall go into the State Fund for Rehabilitation of Disabled Persons.

Financing and Support Measures

  1.  Exemption from VAT for non-profits performing general interest activities in culture, art and national heritage protection.
  2. Tax Exemptions provided by the last two laws summarised.


In Portugal, there are several legal forms for SEs, including mercy houses, mutual associations, foundations, philanthropic associations with IPSS status, social cooperatives, and commercial enterprises. However, there are more forms that often fall in a grey area. There is no defined legal form for SEs in Portugal, but they can use different legal forms to operate. 

Framework Law of the Social Economy (30/2013)

This law defines the norms concerning the relation between SEs and the Government:
  • SEs must be represented in Economic and Social Council and other authoritative bodies
  • The government must directly support set-up activities and collaborate with the sector to develop policies
  • State must develop supervision mechanisms to guarantee this relation
  • Members of SEs administration bodies can receive payments
  • IPSSs are allowed to develop commercial activities, as long as the profits are invested in the SE
  • Strengthening of the transparency of SEs
  • Reinforcement of the multi-stakeholder nature with a focus on the rights of beneficiaries 

Mercy houses (30/2013)

Mercy houses are organisations operating under the canonical legal framework. They are actively practicing Catholic traditions, informed by Christian doctrine and moral, and satisfy social needs. They are governed by their main governing document filed with the umbrella organisation and operate as IPSS under the Framework Law. This status regulates most of their social, economic and governance activities. They mainly operate in social action and security as well as well-being.

Mutual associations (190/2015)

Mutual associations are private social solidarity institutions with unlimited associations, undefined capital and indefinite duration. They practice mutual aid in their personal and familial interest. This is mostly done through their member contribution and they have to be registered in the General Directorate of Social Security. In the case of dissolution, each stakeholder is reimbursed the amount contributed with the exceeding money placed in a mutual solidarity fund. Despite the fact that they are member organisations, they cover topics of social protection and health access. 

Foundations (24/2012)

Foundations consist of legal persons that pursue a social interest. They should not distribute their profits and aim for a social goal. Foundations have certain mandatory bodies and have diverse distributional constraints. They also only have limited economic possibilities, must have a primacy of their social purpose and the assets are locked in the case of a dissolution. They have to follow strict privacy und publicity rules.

Cooperatives (119/2015 & 66/2017)

Cooperatives are independent organisations that aim to satisfy the economic, social or cultural aspirations of their members through cooperation and mutual assistance. CASES is a register, where all cooperatives must register to certify their work. At least 5% of the surplus must be stored for the legal reserve fund and 1% education and training fund. The only surplus that can be distributed among the members is the one from business carried out between the cooperative and its members. And this only applies to members that were part of that economic process. Surplus made from economic activities with non-members must be stored. In the case of dissolution, each stakeholder is reimbursed the amount contributed with the exceeding money distributed among the members according to their shares. 

Portuguese Constitution (82&85)

It defines the cooperative and social sector as third sector of the means of production” which is distinguished by the public and private ones. The state must protect and promote this sector. It is the constitutional background for the Framework Law.

Cooperation between the government and SEs (120/2015)

There are different forms of contracts between governments and SEs: 1. cooperation agreements; 2. management agreements; 3. protocols; 4. conventions.

Financing and Support Measures

  1. Mutual associations and Mercy houses
They enjoy multiple fiscal benefits and exceptions. Social security is reduced, as an example, on the employers part by 1,45%.
  1. Associations and Foundations
The benefits for this kind of organisations depends on their legal status. It ranges form total business tax exemption, exemption from VAT to exemption from municipal tax and reduced social security costs.
  1. Cooperatives
Business tax depends for cooperatives on the legal form. However, all cooperatives get exempt from municipal tax as real estate transaction tax for the buildings they use for their activities. 
  1. Donations
There are tax and fiscal benefits for donors as well as the receivers.
  1. Institute for the Support of Small and Medium-sized Enterprises 
This institute was founded by the Portuguese government to support the growth of small SMEs. It should also strengthen innovation and entrepreneurship, which can help SEs. 
  1. Start Up Portugal
This programme coordinates the national strategy and implements the European Social Fund. There is no special focus on SEs, but they can profit from these measures. However, there are multiple different organisations that help SEs.
  1. PADES
There are different banks which support SEs, with governmental PADES being a very important organisation, as they offer a credit line with subsidised interest rates for actors in the social economy. With this program the cooperation between the government and the social economy should be strengthened. 
  1. So far, there are no special programmes for SEs, but there are projects like CoopJovem that can take that place in the future. EU funds, however, play a major role in the development and support of SEs in Portugal.
  1. Public procurement introduces some features that allows SEs to be in a better position to get state contracts. 
  1. Umbrella organisations 
There are multiple support and umbrella organisations like União das Misericórdias Portuguesas” that support organisations in a particular area. Furthermore, there are different initiatives that support SEs.
  1. Incubators and Facilitators
Incubators like Coopjovem and facilitators like ReCo. established a support and peer-network for SEs to help them grow.
  1. Programmes like Social Investe provide financial support up to 100.000 EUR per organisation to enable their growth.


In Romania, ex lege social enterprises are regulated mostly through Law on the Social Economy 219/2015 but other de facto social enterprises can be identified in (i) associations and foundations embodying an entrepreneurial activity pursuing general interests, (ii) WISEs, (iii) Mutual aid associations of retirees – or RMMAs – and (iv) cooperatives with general interest aims. 

Law on the Social Economy (219/2015)

This law defines the social economy as all the activities privately organised with the aim of serving the public interest, that of the community, and private non-financial interests. It does so through the employment of vulnerable people/groups or through the production and supply of goods and services. 

Also, this legislation defines social enterprises as organisation which fulfil the criteria of (i) priority of social aims rather than profit gains; (ii) solidarity and collective responsibility; (iii) democratic governance; (iv) allocation of the largest proportion of the profit towards sustaining the social aim and the statutory reserve. 

Organisations that can qualify as “social enterprise” are: (i) cooperatives, (ii) credit cooperatives, (iii) associations and foundations, (iv) mutual aid associations, (v) agricultural companies. That is, of course, provided that they meet the above criteria. These must apply for the social enterprise certificate from the National Agency for Employment. 

Moreover, the law introduces the “social insertion enterprise” (article 11), which is to be understood as a new category of WISEs, specifically regulated by this law, that emphasises the instrumental use of the social economy towards the aim of social inclusion. These must apply for the certification of “social mark” which is awarded if the organisation meets the following criteria: (i) at least 30% of employees belong to vulnerable groups; (ii) the group’s work time cumulatively represents at least 30% of the total; (iii) the organisation aims at fighting exclusion, discrimination, and unemployment through integration. 

Law on Social Assistance (292/2012)

Identifies the social economy as a new form of social inclusion focused on the work integration of vulnerable people(article 53). Moreover, this legislation compels the government to develop specific legislations for social economy actors – e.g., Law 219/2015.

Government Ordinance 26/2000 and Law 246/2005

Deals with the regulation of associations and foundations, yielding them the possibility to conduct economic activities (GO26/2000). They can engage in the production of goods or provision of services which are in line with the public interest – e.g., social services, care giving, education, environmental protection and others. Their profits must be employed in ways coherent with the entity’s statutory purposes. Moreover, GO 26/2000 introduces the formal status of organisation of public benefit” which, however, does not yield any significant fiscal advantage. 

Law on the Protection of People with Disabilities (448/2006)

Defines WISEs as companies, associations, foundations (and also public administrations) where air leat 30% of employees carry some kind of disability. They aim at the full integration of their target group through both productive work and commercial activities. Moreover, according to this law, every company must employ a quota of 4% of people with disabilities.

Law 504/2002

Together with the government ordinance 26/2000, this legislation regulated Mutual Aid Associations of retirees (RMMAs). Their main focus is the provision of financial, social, health and cultural services for the older people and communities, and must first be registered as associations in accordance to the GO 26/2000.

Law on Organisation and Functioning of Cooperatives (1/2005)

Regulates the functioning and organisation of Cooperative. They conduct economic activity to promote the interests of the community and reinvests its profits (although not exclusively) to this aim. Moreover, they follow the principle of “oneperson, one vote” in their governance. 

Financing and Support Measures

  1. Subventions and tax deduction on income (from wages, freelance activities, and pensions) for those employees with severe disabilities
  2. Under the threshold of 15,000 EUR (< 10% of income from non-profit activity), foundations and associations are not required to pay profit and income tax.
  3. Foundations and associations, as well as social enterprises which provide social services benefit from deductions on land/estate tax. Moreover, associations and foundations enjoy exemptions from membership and registration taxes as well as from donations and others.
  4. A start-up nation programme aimed at the provision of small grants (44,000 EUR) for SMEs development is present in Romania. 
  5. According to Law 34/1998 and Law 350/2003, subsidies and grants for associations and foundations that provide social services are available and can be awarded by local governments as well as central public authorities. 
  6. A funding scheme for social enterprises called “support for social enterprises start-up” is available in Romania. 


In Slovakia, SEs usually take the following legal forms: (i) Ltd, (ii) civic association, (iii) public benefit organisation, and (iv) cooperative. None of these was specifically designed for SEs and each one of them is regulated by specific laws. Moreover, there are currently no particular tax cuts or reduction de facto envisaged for SEs, and their investors and donors enjoy no tax relief or other types of benefits.

Act 112/2018 on Social Economy and Social Enterprises

It provides a definition of SE that closely matches the EU operational definition except that it does not mention neither democratic governance nor asset lock. It offers a spectrum of financial as well as non-financial assistance publicly funded, designed exclusively for social enterprises. 
Specifically, it explains that:
  • SEs must (i) not be mostly or fully financed and managed by the state; (ii) perform activities pertaining to an area of the social economy – i.e., their main objective is to achieve positive social impact; (iii) be not-for-profit or use the profit for purposes of achieving a positive social impact.
  • Social enterprises that fulfil all the conditions may apply for the status of “registered social enterprise” which opens access to a wide range of support measures. 
  • The law expanded the definition of entrepreneurship as defined by the Commercial Code so as to allow for business activities to achieve measurable positive social impacts.
  • Social economy entities are established and managed under separate legislation relating to their specific legal form – e.g., if the SE is a non-profit, it will be regulated by Act. No. 213/1997 on non-profit organisations.

Amendment to Act 343/2015 on Public Procurement

Serves as a legal framework stimulating the market for social enterprises. It makes it possible to directly award an under-limit contract (namely a financial threshold applied in public procurement process) to a registered social enterprise.

Amendments to act 5/2004 on Employment Services

  • Amendment in 2008: Introduced the term social enterprise. The amendment was a reaction to rising unemployment following the 2008 recession and the term was therefore strictly related to work integration. 
  • Amendment in 2015: Introduced the term subject of social economy. Because it contributed to dropping the connection of social enterprises with labour integration, this amendment offered a partial widening of the perception of social entrepreneurship.

Financing and Support Measures

    1. Tax assignation
    • Mechanism which enables to assign a portion of income tax to non-profits. Businesses can assign between 1-2% ; individuals’ amount can vary between 2-3% depending on their voluntary activities.
    1. Tax exemptions
    • Rergistered SEs which reinvest 100% of their profits towards their social objective enjoy a tax exemption. Also, they benefit from a VAT reduced to 10% on their produced goods and services.
    1. Act 112/2018
    • Provides three key types of support measures tailored for social enterprises classified as (i) investment aid – this entails a non-repayable aid if the SE acquires at least 20% of the total budget of the investment plan through a loan;(ii) compensatory aid – entails financial aid (e.g. subsidies for disadvantaged employees) to SEs which are disadvantaged compared to mainstream enterprises; and (iii) demand-support aid.
    1. ESF and EDRF are important sources of finance.
    2. Service vouchers
    • Bonds issued by the Ministry of Labour, Social Affairs and Family, which can be used to pay for the services delivered by registered social enterprises. The value of one service voucher is 10 EUR and are subsidised through a cash back of 3 EUR for regular households and of 5 EUR for assisted people. This measure widens the market for SEs. 


In Slovenia, the main piece of legislation dealing with the social economy is the Social Entrepreneurship Act of 2011 which was heavily amended in 2018. It provides for a social enterprise status/qualification which can be applied to other legal forms, mainly NPOs such as association, institutes, and foundations.

Social Entrepreneurship Act (2011, amended 2018)

This Act defined the social economy as an “economy, which is composed by social enterprises, cooperatives, companies for people with disabilities, employment centres, non-governmental organisations (associations, institutes, foundations), that are not established solely with the purpose to gain profit, operate in the benefit of their members, users or broader society and produce commercial or non- commercial products and services” (Article 2). This is also the first legislation that defines the social enterprise status in Slovenia stating that a “non-profit legal entity, which acquires the status of social enterprise and can be an association, institute, foundation, company, cooperative, European cooperative or other legal entity of the private law, that is not established for the sole purpose of generating profit and does not distribute assets or the generated profit or excess revenue over expenditure”Moreover, it defines social entrepreneurship as a “permanent performance of entrepreneurship activities with the production and sales of products or the provision of services on the market for which the generation of profit is not a main objective of entrepreneurship activity, but the primary goal is the achievement of social impacts”Finally, the law provides criteria for obtaining such status (Article 3) along with requirements for reporting and ways of promoting social entrepreneurship.

Act on associations (2006)

This legislation defines associations as independent and voluntary-based non-profit organisations for the fulfilment of common interest. They are membership-based. They can be awarded a “public benefit status” if they operate in a relevant field such as culture, education, healthcare, social services, family policy, human rights, environment and animal protection, sports, and more. 

Act on Cooperatives (1992)

This legislation defines cooperatives as organisations “associating an initially undetermined number of members with the purpose of enhancing the economic interest of its members and based on voluntary entry, free withdrawal and the equal rights of members to participate in the operation and management of the cooperative.” According to the law, the non-profit constraint applies only to 5% of the profit, while the remaining 95% can be distributed to shareholders. Thy are governed democratically by their board of members where the principle “one member one vote” is applied.  

Institutes Act (1991)

This law defines institutes as organisations set up to perform activities in relevant fields such as education, science, social services, care giving, social services and other. Their goal must lie beyond profit maximisation and are governed by a council consisting of founders, employees and consumers.

Act on Foundations (1995)

This act defines foundations as assets bound for special purposes, mainly focusing on common/humanitarian benefits. No profit distribution is allowed. 

Vocational Rehabilitation and Employment of Disabled Persons Act (2004); Rules on Companies for People with Disabilities (2005); and Rules on Employment Centres (2012)

These three legislation regulates WISEs, specifically the deal with the special status of: 
  1. Companies for people with disabilities – this status can be awarded only to LLCs. These companies must reinvest at least 80% of their profits back into the company and must employ at least 40% of workers with disabilities. 
  • These companies enjoy reductions and exemptions in social security contributions for all employees. 
  1. Employment centres – can be awarded only to institutes and cooperatives. They serve people with restrictive disabilities (30% to 70% productivity) and enjoy higher benefits. 
According to the three legislations, the two statues give access to a wide variety of state incentives and subsidies. 

Financing and Support Measures

  1. NPOs are exempt from paying taxes on their non-profit activities but enjoy no reductions on their for-profit ones.
  2. NPOs enjoy exemption of paying VAT on their for-profit activities which are in the public interest (e.g., education, social services etc.) if their taxable income is less than 50,000 EUR
  3. Donations to NPOs are incentivised (although not much). Donors enjoy a relief of 0.3% of taxable income and an additional 0.2% if the activities are in the public interest. 
  4. Companies for people with disabilities are exempt from paying taxes as well as social security contributions for all company employees.
  5. Different national and municipal level funds and support are available (e.g., MGRT, MDDSZ programs, SEF, Project SEA). They are both aimed specifically at social enterprises and at all SMEs meeting some project-specific public benefit criteria. 
  6. EU funds are widely available and play an important role in Slovenia. 

Law 9/2017 on Public Sector Contracts

This law indicates that access to public procurement will be facilitated for social economy enterprises. It envisages the obligation to reserve complete contracts or lots  within public contracts to IEs or CEEs (see below) in a level established by the respective national, regional and local authorities. It obliges public authorities to use a plurality of award criteria, i.e. incorporate qualitative aspects in the object of the public contract, through the inclusion of social and environmental clauses, which allow the best quality-price in public contracting. The law also establishes the possibility to request social (or environmental) labels (e.g., the qualification as “socialenterprise”) to providers. This law does not specifically aim at SEs. Nevertheless, due to their intrinsic characteristics, SEs fit more naturally than other SMEs. 

Law 5/2011 on Social Economy

Law used as framework for the social enterprises (this follows from a parliamentary resolution). 
Due to the flexibility of the general law on social economy, even if SEs are not recognised by any specific law, they can be included in this more general one.
  • The law groups together (for identification and promotional purposes) legal entities – such as cooperatives, mutual insurance organisations, WISEs and associations and foundations engaged in economic activities – that existed previously (article 1). 
  • However, it does not create any new legal form, and it includes legal entities which, traditionally, have not been part of the social economy sector in Spain – given that their economic activity is based on principles presented in art. 4 (articles 5)
  • Article 4: Stipulates that all entities included in this sector should follow values based on certain principles. Most important: (i) supremacy of the person/social goal over capital, (ii) distribution of profits not according to capital provision (iii) devotion to social sectors (iv) independence from public power.
  • In associations and foundations, profits gained trough the economic activity have to be used in line with their statuatory purposes

Law 44/2007 (expanded by Law 31/2015) on EIs

Deals with “employment integration enterprises” – Empresas de inserción or EI. These aim at the employment integration of people referred by the Social Services (e.g. people in rehabilitation or long-term unemployed). EIs can obtain reductions in social security contributions for workers at risk of exclusion (also thanks to the help of law 4/2013), subsidies for economic compensation of the labour costs, subsidies for investment focusing on their social goals, as well as other regional reductions and subsidies.

Law 49/2002

This law deals with the fiscal Regime for NPOs and the fiscal incentives for fundraising.  It also promotes donations to these entities with tax exemptions for the donors. Incentives include exemptions from annual business tax and other taxes and apply to non-profits (most often associations, foundations and Cooperatives). It is important to notice that local authorities can also create tax benefits for NPOs.

Law 27/1999 on Cooperatives

In Spain, at the national level, cooperatives are the legal form with the largest tradition and recognition within the social economy. Among other cooperatives types, this law recognised the Cooperativas de iniciativa social (CIS) – or social initiative cooperatives. CIS are defined as those cooperatives that, being non-profit and independent, mainly engage in the provision of welfareservices in activities of social nature (e.g. health, education), or in the development of economic activity with the aim of employing people suffering from any kind of social exclusion and, in general, satisfy social needs not met by the market(Article 106). It is important to notice that Spanish regions can develop their own framework for cooperatives which may expand or adjust the focus of the national law. Regions may use a different terminology to refer to CIS. 

Law 20/1990 on the fiscal regime of cooperatives

The law provides tax breaks, reduced social security contributions and similar measures. These benefits have a substantial impact on foundations, associations and CISs. Cooperatives have lower tax rates than conventional companies and, together with worker-owned companies (sociedadeslaborales), enjoy other types of fiscal benefits, such as exemptions on certain taxes and accelerated depreciation. Some specific measures are: (i) CISs can obtain a reduction in the general tax for businesses under some specific conditions related to the demonstration of the general interest of their economic activities; (ii) profits are either exempted from taxes (if the coop is a non-profit), or, otherwise, only 10% of revenue is taxed; (iii) CISs enjoy a reduction of 95% on the Economic Activities Tax.

Law 13/1982 on CEEs

Established the “Special employment centres for social initiative” – Centros especiales de empleo or CEE (non-profits,as defined by law 9/2017) – which seek to integrate the highest possible number of people with disabilities into the labour market (at least 70% of CEE staff must be workers with disabilities). CEEs enjoy direct subsidies as well as a reduction in the annual business tax for each new worker hired. Moreover, there can be exemptions on annual business tax and the tax of consumption as a result of the non-profit mission (these follow from law 49/2002).

Financing and support measures

  1. Strategy for Entrepreneurship and Youth Employment
  • Not directly targeting SEs. Benefits mostly take the form of reductions in social security contributions aimed at incentivising hiring young people and promoting entrepreneurship
  1. Measures and tax breaks under law 20/1990 on the fiscal regime of cooperatives
  1. Enterprises established in rural areas may benefit from different measures for the promotion of business creation and consolidation. Most of these are based on the European structural funds, mainly through the European Social Funds (ESF) and the European Fund of Regional Development (FEDER in Spanish), which are complemented by several programmes run by the regional governments.
  1. The Ministry of Employment and Social Security enacts different public policies promoting employment and competitiveness of cooperatives. Some examples are grants for incorporating partners to cooperatives or worker-owned companies, grants for investments in fixed assets, and even grants for training and technical assistance. These may take the form of microcredits, direct governmental grants, discounts on interest rates and many others.
  1. It is worth to point out that there are a number of private programmes promoting social enterprises and social entrepreneurship such as Oinarri (SGR), Creas Foundation, ISIS Capital and many other.
  1. Finally, there are also two main public providers
    • ICO Foundation, Social Finance – state-owned NPO which facilitates access to microcredit and support knowledge creation in the microfinance sector.
    • ENISA, Innovation National Enterprise – public enterprise funded by the Ministry of Industry, Energy and Tourism, ENISA is dedicated to financing viable and innovative projects by offering loans without guarantees


No social enterprise specific legal form exists in Sweden. Nevertheless, SSE actors in the country usually take the forms of (i) economic association; (ii) non-profit association; (iii) limited company. Please note that there is no separate statute for non-profit associations in Sweden, yielding a lot of freedom for these association to organise themselves to suit their purpose and activities. Moreover, not all legal entities falling into these categories are Social Enterprise. 

Economic Association Act (1987)

It defines economic association as associations with an intention to make profit, and is often analogously applied to various types of associations that are not formally regulated. It is formed by a minimum number of three legal/natural persons (whose liability is limited to the capital invested in the association) and is represented by a board of directors. 

Swedish case law

Among other things, this laws identifies the steps to set up a non-profit as a legal person. Essential to this process are the agreement of cooperation between two persons (legal or natural) and the appointment of a board. Although there is no requirement to do so, non-profits can register with the authorities in order to conduct economic activities.

Foundation Act (1994)

Introduced the legal basis for foundations. According to the law, there are four different kinds of foundations: (i) General Foundations; (ii) Fundraising foundations; (iii) Collective agreement foundations; (iv) pension or personnel foundations. They aim at the promotion of an objective on a long-term basis which can be met  by using the yield of the separated property to give cash donations to certain individuals or groups, or by becoming involved in business activity. The separated property has to keep the foundation for at least five/six years from its founding.  the liability of a foundation is limited to its assets.

Companies Act (2005)

This law regulates public and private LLCs. The article of association of an LLC must contain, among other things, the business objective and the share capital and must be public. Among shareholders, the most fundamental rule is the principle of equality of treatment, i.e., decisions and actions must be carried out in a manner that treats all the shareholders equally. Moreover, each shareholder is entitled to vote for all shares that he/she owns, unless otherwise prescribed in the articles of association. By this law, the main rule regarding decisions in matters other than elections is that they must be adopted by an absolute majority, while in the case of board members’ election the person with the most votes wins. 

Income Tax Act (1999)

Among other things, this law enables foundations, non-profits and religious communities to receive favourable treatment if there work in pursue of public utility activities – i.e., promoting culture, environmental care, care of children, political activities, religious activities, healthcare, charitable work to those in need, education, scientific research, or other equivalent activities and to strengthen Swedish defence in connection with military or other authorities.

Financing and Support Measures

  1. Income from sales in the case of non-profits with public benefit aims are exempted from taxation
  2. Legal entities employing people with “reduced working ability” can benefit from grants from the Swedish Labour Market Agency aimed at covering a part of their salary costs. The size of the grant depends on the individuals’ estimated working capacity. 
  3. ESF plays a central role in Sweden