Aid to Investment

In order to promote industrial development, Basque Institutions offer a wide range of aids, which include the support to investment through returnable advances, low interest loans with good payment conditions, lease and hire contracts in favourable conditions, tax incentives, professional training, company support for job creation, aids for the implementation of research and development projects (R&D), setting up of companies in technology parks, etc.

This aid corresponds to different organizations: the European Union, the Spanish State, the Basque Government and the Provincial Councils of each Historic Territory (Araba, Gipuzkoa and Bizkaia) - a substantial variety of programmes. For further information consult the DELFOS data base, which can be accessed from www.euskadi.net and www.spri.net. On the other hand, SPRI, the Basque association for the promotion of industry, offers help to assess the kind of programme that can be applied in each case, depending on the regulations of the different institutions. For further information contact info@spri.es. [move up]

Establishing Companies

In the Basque Country almost 5,000 commercial companies are established each year; most of them are traditional companies, especially in the case of Limited Responsibility companies, but we must stress the continuous increase in the number of companies that adopt other legal forms (Co-operatives and Worker-Owned Companies) where human factors predominate over capital, favouring self-employment. The concern, in the latter, for concepts such as Corporate Social Responsibility (CSR), Sustainability, the Environment, Respect for Workers and Groups of Interest... is to be noted. The institutions support the implementation of models based on CSR as a new strategic axis (Xertatu: aid Programmes). [move up]

Commercial Laws

Commercial Laws governing the creation of a company in the Basque Country is the same as in the rest of the State, except for specific legislation governing co-operative companies; the Companies established may be of two types: civil or mercantile.
Civil Companies – Community of Property –, governed by Civil Law (art. 392 to 406 and art. 1,665 to 1,708), do not have their own legal personality and the partners (two at least) respond to any company debts with their own property, which is clearly a system not currently in us.

Mercantile Companies are classified, based on the level of responsibility of the partners, into:

1.Unlimited Responsibility Companies = Regular Collective Company

2. Mixed Responsibility = Limited Companies

3.Responsibility limited to contributions:
a. Private Limited Company
b. Public Limited Company
c. Worker-Owned Company (Private Ltd. or Public Limited)
d. Co-operative Company

Unlimited Responsibility Companies or Mixed Companies are not common.
A Private Limited Company (Law 2/1995 of 23rd March) requires a public deed issued by a notary and registered in the Mercantile Register of Companies and must have a capital of at least 3,000 Euros with no limit of partners. It is governed by the General Meeting of Partners and by a Single Administrator, or several administrators or by a Board of Administration. It pays Company Tax at general rates.
A Public Limited Company (Law 1564/1989 of 25th July) requires a public deed before a notary; registered in the Mercantile Register of Companies and must have a capital of at least 60,000 Euros with no limit of partners. It is governed by the General Meeting of Shareholders and by a Single Administrator, or several administrators or by a Board of Administration. It pays Company Tax at general rates.
A Worker-Owned Company (Private Limited or Public Limited) (Law 4/1997 of 24 March) requires a public deed before a notary and registering with the Register of Companies. It also requires registering with the Register of Worker-Owned Companies of the Basque Government; its capital must total at least 3,000 € (Private) or 60,000 € (Public) and must have at least 3 partners, each of which may not hold more than 1/3 of the Company Capital. Furthermore, most of the capital must be owned by the partners-workers with open-ended contracts. There are a number fiscal exemptions (ITP/AJD) as well as special aid packages for social economy companies. In all other concepts, they adapt to legislation governing private or public limited companies.
Co-operative Companies (Law 4/93 of 24th June) require a public deed before a notary, registration in the Euskadi Co-operative Register; at least 3,000 € of capital and at least 3 partners; most of the partners must work in the company. They are governed by a General Assembly and by a Single Administrator or Governing Body . They enjoy a number of Fiscal Exemptions (ITP/AJD) and pay a lower Corporate Tax rate. They may also be entitled to special aid for social economy companies.[move up ]

Social Economy Companies

Worker-owned and Co-operative Companies are so-called Social Economy Companies. They are based on the following principles:

• democratic decision-making processes, “one person = one vote", they have inherited the co-operative principle, considered by some as the main principle as it introduces democracy in decision making if compared with private sector capitalist systems, where the capitalist principle of "one share = one vote" is used.
  
• priority of people and work over capital when distributing profit, which implies a distribution of profit that is not linked and that may even contradict each member's participation in the company's capital, as can be seen in principles such as the provision of collective assets, the limited remuneration of capital or even the rule of no distributing profits,
• service based purpose of its members or group before profit-making, stressing that the economic activity performed is based on a vocation to help people and not on obtaining profits, which may be made but as an intermediate objective for the final purpose of the company, which is to provide a service and
  
• autonomous management, distinguishing it from public companies.

Industrial activities concentrate the greatest level of employment among social economy companies, followed by those integrated in the services sector, construction and agriculture. All in all, 68,108 Basque workers are co-owners and take part in the management of over 2,500 co-operative and worker-owned companies.
Basque social economy offers employment levels that are higher than average and it is the predominant corporate formula in certain districts, especially in the historical territory of Gipuzkoa. The most important entity, Mondragón Corporación Cooperativa (MCC) , is the largest corporate group in the Basque Country and the most highly diversified throughout Spain.
Basque co-operative companies provide jobs for 54,500 workers; they are represented by the Confederación de Cooperativas de Euskadi (Basque Country Co-operative Company Confederation), with 675 member companies from six federations; ERKIDE groups dedicated to Work Partnerships (511 companies and 33,152 workers, of which 23,134 are members), Credit companies (2 companies, 452 branches and 2,525 employees) and those dedicated to Teaching (76 co-operatives with 5,142 employees, over 4,100 teachers and over 54,500 students); on the other hand, the federation of Agricultural co-operative companies comprises 71 companies and 621 workers, the Transport federation includes 6 companies with 650 employees, 581 of which are members and, finally, the federation of Consumption co-operatives includes 9 companies, 10,233 workers, 7,680 of which are members. The total number of co-operative companies generates a turnover of around 10,460 million euros. This confederation represents almost 95% of all co-operative members in the Basque Country.
Concerning Worker-Owned Limited Companies (SAL), their presence is especially significant in the Basque Country, above all in the industrial sector. The 300 Basque companies that form the Association of Basque Woker-Owned Limited Companies (ASLE) employ almost 9,000 members, which totals 16% of the workforce in this type of company in the entire State. [move up]