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Financial Participation

The relatively few companies offering such schemes are usually bigger companies listed on the stock exchange. But cooperatives and workers’ companies also play a special role.


Profit-sharing schemes enjoy no preferential tax treatment. Any payments are treated as wages subject to tax and social security contributions. Profit-sharing bonuses are treated in collective agreements additional payments the employee always receives, independent of the company’s profits. Normally it is paid either once a year as an additional monthly wage, or as a fixed percentage of wages.

The findings of the European Company Survey, a survey of more than 27,000 HR managers in Europe conducted in 2009, show that 17% of private-sector Spanish companies with 10 or more employees offer their employees a profit-sharing scheme. Compared with other European countries, this is a slightly above-average figure (the 30-country European average is 14%). The prevalence of employee profit-sharing schemes in Spain varies only slightly with company size. 17% of companies with 10-49 employees, 16% with 50-199 employees, and 19% of companies with more than 200 employees have a profit-sharing scheme.1 According to the results of the fifth European Working Conditions Survey (EWCS)2 of 2010 profit-sharing schemes are far less widespread, at only 5.9% of employees.

Employee Share Ownership

According to the findings of the European Company Survey 2009 3 3% of private companies with 10 employees or above in Spain offer their workforce employee share ownership schemes. By European comparison this puts Spain in the lower third and below the European average of 5%. These employee share ownership schemes are used by 2.2% of employees, according to the EWCS 2010, putting Spain somewhere in the middle but still below the European average of 3%.4

Other forms of participation5

The most common form of cooperatives are the production-based cooperatives (Cooperativas de Trabajo Asociado) constituting 60% of all cooperatives. Profit distribution is dependent on individual accomplishment. About 20% of profits or cooperative returns and 50% of the extraordinary profits must go into a non-distributable reserve fund. The number of hours per year worked by non-members must not exceed 30% of total hours per year worked by members. This kind of cooperative is subject to preferential tax treatment: they are exempted from capital transfer taxes and subject to a corporate income tax rate of 10% instead of 35%; other forms of cooperatives pay 20%. The tendency for this kind of cooperative is increasing and they are primarily to be found in the autonomous regions of Catalonia, Andalusia and Valencia where they account for almost 60%. They operate mainly in the secondary and tertiary sectors.

The Spanish Mondragon corporation, a group organised as a cooperative, is often cited as an example for a production-based cooperative, in which employees have a say in how the company is owned and run. The group operates in various sectors (including engineering, the automotive sector, banks and insurance. With more than 85,000 employees, Mondragon is the biggest corporation in the Basque province and the seventh-biggest corporation in the whole of Spain. Of its 265 independent companies, 120 are organized as legally independent cooperatives. In the Basque province, 32,000 or the group’s 33,000 employees are cooperative members, and therefore owners of their companies. At the same time they participate in management decision-making via democratic voting processes. If a company finds itself in financial difficulties, these can be compensated by employees agreeing to take cuts in their wages. All profits are reinvested in the company.6

Another model of financial participation are the workers’ companies (Sociedades Laborales) in the “social economy”. The most important feature of this kind of company is the fact that a minimum of 51% of the company’s capital must be in the hands of its employees. No member may own more than one third of the capital, except in the case of state participation where the state may own up to 49.9%. This form of company can be established by either transforming an existing company or founding a new company with the legal status of a public or private limited company.

Workers’ public limited companies must have a capital stock of €60,000 whereas workers’ private limited companies require €30,000. If the company has more than 24 employees, non-members may contribute up to 15% of members’ total annual working hours. If the company employs less than 25 persons, the allowable percentage of non-member working hours is 25%. A workers’ company must maintain a special reserve fund, into which 10% of annual profits must be transferred. When cooperative shares are sold, non-member permanent workers have preference over members and non-member temporary workers.

Workers’ companies using 25% of their profit for special reserve funds in a given year may benefit from a 99% exemption from capital transfer tax. Such companies operate primarily in the secondary and tertiary sectors.

Though the number of registered cooperatives fell sharply between 2000 and 2012, they still play an important role in Spain.

Table: Number of registered cooperatives in Spain



























Source: Instituto Nacional de Estadística (2013).7

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.