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EFES NEWSLETTER - NOVEMBER 2025
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Over
the past ten years, employee ownership in SMEs has seen
extraordinary growth in Great Britain (see previous
newsletter). We are rapidly moving towards a situation
where one in ten SMEs will be employee-owned.
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In
most cases, employees become 100% owners of their company
(average size: 72 employees), without having to spend
a single penny of their own money.
This success can be attributed to one key factor: the
simplicity of the mechanism. That mechanism is the trust,
specifically the Employee Ownership Trust. No other
legal structure offers such simplicity. This is what
makes large-scale business transfers to employees so
successful in the UK.
Incidentally, a large number of European countries have
already adopted "trust" type laws, each with
their own specific terminology: in France it's the “fiducie”,
in French-speaking Belgium the “foundation privée”,
in the Netherlands the “stichting”, in Germany and Austria
the “stiftung”, and so on. Below, we use the word “trust”.
Here are the three main aspects of this simplicity:
1. To transfer a company, the trust is simply grafted
onto it as the new personified owner. The company remains
operational, and does not need to be replaced or modified
in any way. It can continue to conduct business from
day to day undisrupted.
2. The trust personifies the ownership of the company's
community of employees. It is normally a small organisation
of just three or five people, rarely more. These are
the “trustees”. The company's employees do not own the
shares, nor are they members of the trust, they are
merely beneficiaries. Beneficiaries of what? Beneficiaries
of the right to share in the company’s profits and to
participate in its governance.
3. As a not-for-profit organisation, the trust is not
taxed on its income or financial results, and is therefore
tax-neutral when passing on company profits to employee
owners.
In addition, the trust allows for a simple structure
with great flexibility and many possible variants. All
this makes it possible to transfer businesses to employees
on a large scale, thanks to credit financing, without
employees having to contribute any of their own money,
and without taking any financial risk.
Only the trust mechanism makes this possible. No other
structure can.
It cannot be a Spanish sociedad laboral – the
sociedad laboral is not a trust. It cannot be
a French fonds commun de placement de reprise
– the fonds commun de placement is not a trust.
It cannot be a Belgian société coopérative de participation.
This was introduced in Belgium by the law of 22 May
2001, as an initial attempt to establish a Coop-ESOP
in Europe. However, it soon became clear that choosing
a cooperative over a trust was not viable, due to this
being inconsistent with European tax rules. As a result,
the Belgian law has never functioned in practice. In
this context, it is surprising to see that Slovenia
has just passed its own Coop-ESOP mechanism. Belgium
will watch with interest to see how Slovenia overcomes
this obstacle.
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Press
review
A
selection of 27 remarkable articles in 8 countries in October
2025: Austria, Canada, France, Italy, Japan, Slovenia, Great
Britain, USA.
Austria:
The employee share ownership foundation is being strengthened
at Oberbank. First ESOP-type employee ownership program for
smaXtec, driven by KKR.
Canada: New legislative proposals boost the appeal
of Employee Ownership Trusts.
France: Transforming a company into a workers cooperative.
Despite record levels, the thwarted power of employee share
ownership in France. Free shares for Clariane. Employee share
ownership representation on the AXA board of directors. How
to facilitate business transfers to employees in France?
Italy: The progression of ESOP/EOT models in Europe.
Japan: KKR leads launch of employee ownership initiative
in Japan to broaden private equity impact.
Slovenia: Following Belgium in 2001, Slovenia passed
a law based on a Coop-ESOP formula. Prime Minister Golob promises
a major civilizational turning point.
UK: Around one hundred new business transfers to employees
every two months. Thanks to the Employee Ownership Trust formula,
two new SMEs are transferred to their employees every day
now. This time, among others, the cases of: Space Solutions,
CSI Recruitment, Tugo Food, OFR fire engineering consultancy,
Hallam digital agency, Wellington HR, NAS Recruitment services.
18 months after Kingfisher became employee owned: How
the transition unfolded, and how the business has faired.
USA: SPC Mechanical becomes 100% employee-owned.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2025/October.htm
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A
political roadmap for employee ownership in Europe
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